ICAB: VAT delay leaves businesses in limbo

U ncertainty over the government’s delay in raising the threshold for valued added tax (VAT) registration is making it difficult for businesses to plan their finances and operations, the Institute of Chartered Accountants of Barbados (ICAB) said. The guild has called for a clear timeline for the change and guidance for businesses that may wish to deregister once the new threshold takes effect. The threshold at which businesses must register for VAT was due to rise from $200 000 to $350 000 on October 1, a change announced by Minister of Finance Ryan Straughn in the Budget presented in the House of Assembly on March 16. He told Barbados TODAY that the legislation needed to implement the change was still being completed. In written responses to Barbados TODAY , ICAB Chief Executive Officer Lisa Padmore said the delay had created uncertainty for businesses already facing rising costs.

“The delay creates uncertainty at a time when many businesses are already facing significant operating pressures,” she said. She added that business owners were “left unable to determine whether anticipated benefits should be incorporated into pricing, investment decisions, staffing plans or cash-flow forecasts”. “Businesses can generally adapt to change. What is more challenging is adapting to uncertainty. ” ICAB said it could not quantify how many businesses with annual turnover between $200 000 and $350 000 had been preparing for the increase. But it said it would have been reasonable for those businesses to assess the implications of the announcement. The bigger concern was whether they had enough certainty to make decisions confidently, she added. Businesses considering deregistration will also have to weigh the potential benefits against the loss of their ability to reclaim input VAT on…