Barbados: Tax measures in 2022 budget

The 2022 Barbados budget includes tax-related measures

The 2022 Barbados budget includes tax-related measures

The 2022 Barbados budget (presented 14 March 2022) includes the following tax-related measures:

One-time COVID-19 contribution levies

  • Companies in telecommunications and retail sale of petroleum products by dealers, deposit-taking institutions (except credit unions), and general and life insurance companies, which generated income in excess of $5 million,* would pay a one-time levy of 15% of net income for income years 2020 and 2021. This tax would be payable to the Barbados Revenue Authority, would not be deductible for corporation tax and could be paid in eight monthly payments beginning 15 July 2022. The levy in respect of the fiscal year ending in 2021 would be due from July to October 2022, and the levy in respect of the fiscal year ending in 2022 would be due from November to February 2023.
  • Effective 1 April 2022, individuals receiving monthly income in excess of $6,250 would contribute 1% of monthly earnings as a pandemic contribution levy for a period of 12 months only. The levy would be payable in addition to the individual’s income tax obligation and would not be deductible for tax purposes.

*$=Barbadian dollar

Value added tax (VAT)

  • Effective midnight 16 March 2022, the VAT payable on gasoline would be capped at 47 cents per liter for six months. Effective midnight 16 March 2022, the VAT payable on diesel would be capped at 37 cents per liter for six months.
  • VAT on selected personal and critical care items (including vitamins, baby and adult diapers and women’s sanitary care products) would be zero-rated effective 1 April 2022.
  • Effective 1 April 2022, a waiver of import duty and VAT would be granted for two years on the purchase and installation of generators at residential homes.
  • There would be an excise and VAT holiday on electric vehicles for 24 months commencing 1 April 2022. 

Customs and import duty

  • Freight for the purpose of calculating customs duties would be capped at $7,350 per 20-foot container and $8,000 per 40-foot container from 15 March 2022 until 31 March 2023.
  • Import duty for used battery electric vehicles would revert to 10% on 1 April 2022, the same as a new battery electric vehicle and consistent with other types of vehicles.
  • There would be a reduction in the tariff for fuel cell electric and solar powered vehicles (new and used) to 10% (from 45%).
  • Import duty and the excise tax for new fuel cell electric vehicles would be reduced to 20%.
  • Effective 1 April 2022, the import duty for vehicles powered by liquefied petroleum gas and compressed natural gas would also be reduced to 25% (from 45%), consistent with the designation of natural gases as a bridging fuel to renewable energy.

Other

  • The excise tax on sweetened beverages would be increased to 20% (from 10%) with effect from 1 April 2022. A similar tax on high salt content products would be imposed from October 2022.
  • A new alternative fuel levy would be introduced with a fixed and variable component for vehicles not powered by diesel or gasoline.
  • To finance the government’s unfunded pension obligations and partially funded pension obligations in relation to the public sector pension scheme, the government proposes to increase the insurance earnings ceiling to $1,182 per week and $5,120 per month effective 1 January 2023, with subsequent increases to take effect 1 January of each year until 2035.
  • The land tax threshold on residential properties would increase to $300,000 from the 2023-2024 financial year and to $400,000 from 2026.

Read a March 2022 report [PDF 1.3 MB] prepared by the KPMG member firm in Barbados

 

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