Barbados: Budget Speech Contains Measures Affecting Individuals
The Honorable Christopher Sinckler, the Minister of Finance and Economic Affairs for Barbados, delivered the Financial Statements and Budgetary Proposals of the government of Barbados on June 26, 2012.1
Highlights of Measures in the Budget Speech Affecting Individuals
• Income Tax Rates/Thresholds: A change to tax brackets with an increase in the income tax threshold (effective August 1, 2012) from $24,200 to $35,000, and a decrease in the effective tax rate applied thereto from 20 percent to 17.5 percent.2 Those taxpayers earning more than $35,000 will pay 17.5 percent on the first $35,000 of taxable income and continue to pay a 35 percent rate on income above that. Note the personal allowance remains at $25,000. (All dollar figures expressed are Barbados dollars.)
• Credit for Preventative Health Care: Tax credit of up to $750, to be claimed in the individual income tax return, for the cost of a comprehensive annual medical examination for taxpayers 40 years and over.
• National Greening Levy: To help the government with the collection and treatment of waste, a National Greening Levy would be applied to employees’ salaries as follows: less than $25,000 (rate of 0 percent), above $25,000 but under $50,000, a rate of 0.10 percent; over $50,000 but under $100,000, a rate of 0.15 percent; and above $100,000, a rate of 0.25 percent.
• Special Entry Permits for High Net Worth Individuals (HNWI): HNWI with net assets exceeding $10 million and other property owners who wish to invest in Barbados, under certain conditions, may qualify for a special entry permit (SEP).
Next Steps
The different measures addressed by the Budget Speech are to be drafted into appropriate legislation and a bill for the amendments to existing statutes will then be brought to the House of Parliament for debate. Following debate and approval in the House of Parliament and the Senate, it will become law when the Governor-General has assented thereto in the name of Her Majesty the Queen and on Her Majesty’s behalf and has signed it in token of such assent. Relevant legislation has yet to be tabled embodying the measures in the Budget at this stage.
However, with respect to the change of the tax rates and tax bands, while the Income Tax Act has not yet been officially amended, the Commissioner of Inland Revenue has issued a circulation in the local press informing the public of the particular changes.
Source: KPMG