Finance Minister Chris Sinckler says the plan to impose a new tax on cellular phone calls is still on the table, but a different method will be used to collect the Value Added Tax (VAT).
Earlier this year, the government had an initial plan of a three-cent tax on mobile airtime.
However, on Wednesday, Sinckler proposed a 4.5 per cent rise in the VAT on mobile phone service, to take effect from January 1, 2016, raising the tax from 17.5 per cent to 22 per cent.
. The Finance Minister told the Barbados Today publication, that the previous plan was proving too difficult and expensive for the telecommunications companies to implement.
“Subsequently, at the request of cell phone companies and others, we met with them to look at that excise. It was felt that given the way in which the billing structure for the companies is done, it would mean an additional cost to them to do a new billing system to accommodate the new excise at three cents.
“They also indicated that they would prefer if it were a percentage, rather than a real figure. It was recommended that the easiest and cleanest way to do this would be to do an increase on the VAT, because VAT is already charged on those services,” Sinckler said.
The Finance Minister said the additional tax will raise between BD$15 and BD$16 million, but the original plan would have cost Barbadians twice as much.