Comments
Stakeholders in the industry will be pleased with the increase in funding allocated to the Barbados Tourism Authority for marketing and promotional activities. The initiative to have a full tourism calendar of cultural and sports activities throughout the year is an imaginative approach which will also be well received.
150% deduction for a period of 10 years on the amount expended on staff training relating to renewable energy;
150% deduction on the marketing of renewal energy related products;
150% deduction on product development and research on renewable energy related sources and the installation and servicing of same;
exemption from the payment of corporation tax by a venture capital fund invested in the renewable energy sector for a period of 10 years;
deduction of contributions to a venture capital fund for a period of 10 years for investments made in the renewable energy sector;
exemption from the payment of withholding tax for a period of ten years on dividends earned by shareholders of companies engaged in renewable energy related services; and
exemption from the payment of tax for a period of ten years on interest earned by financial institutions for the financing of renewable energy related products.
The Hotel Refurbishment Fund will be appreciated by hoteliers however the amount spread over the industry is not significant and the administration of the facility may slow access. Hoteliers will welcome the reduction in VAT rates to a standard 7.5%. It is not yet clear what services will be classified within “direct tourism services” which will benefit from the reduced VAT rate. Clarification of the waiver programme is required. Government must be commended for its far reaching proposals to support the resuscitation of the tourism sector, a critical engine of growth and a major foreign exchange earner.
Alternative/Renewable Energy Renewable energy has been a feature in a number of budgetary proposals in recent years. The Income Tax Amendment Bill as proposed encompasses the majority of the proposals put forward by the Minister in his 2012 budgetary proposals with respect to renewable energy, including:
exclusion from tax of income earned from the sale of electricity produced from the utilization of renewable energy equipment by an individual who owns and wholly occupies residential property;
deduction of amounts spent or incurred in respect of training in renewal energy and energy efficient systems or in respect of a minor or a student under 25 years of age who is unemployed and pursuing a course in renewal or energy efficient systems. The training is to be provided by an educational or vocational institution that is approved by the Barbados Accreditation Council;
income tax holiday of ten years granted on the certificate of the Minister Responsible for Energy to a developer, manufacturer or installer of renewable energy systems and energy efficient products;
150% deduction of loan interest relating to construction of a new facility or the upgrading of an existing property relating to renewable energy;
PwC
The Minister has indicated that the government is pushing ahead with the revelation of “a major renewable energy initiative” with the intention of utilising some major government buildings to generate electricity for sale to the Barbados Light and Power Company, while reducing the government’s energy cost. The measures include a proposal to invite the private sector to supply, erect, operate and maintain solar electricity systems on the roofs of selected Government owned buildings using the modality of a Solar Power Purchase Agreement. The Public Sector/Private Sector Partnership arrangement is intended to advance the penetration of solar electricity systems in Barbados. It is proposed that solar electricity systems be erected on the roofs of hurricane shelters, twelve Government owned buildings, nineteen schools and National Conservation Commission facilities. These installations are to be funded wholly/partly as follows:
Hurricane shelters - US$2,000,000 grant;
Government owned buildings – part of the US$24,664,000 Public Sector Smart Energy Programme to be funded by the Inter-American Development Bank and European Union; and
Schools and National Conservation Commission facilities – Government Resources.
The minister has indicated that the Government does not have the resources for the installation of the solar systems and therefore requires Private Sector assistance to achieve this.
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