Barbados is set to overhaul how digital accommodation taxes are collected, with Airbnb, Booking.com, and other major online platforms soon required to deduct and remit the Shared Economy Levy directly to the Barbados Revenue Authority, removing the need for small property owners to file bi-monthly tax returns according to Minister in the Ministry of Finance Ryan Straughn.
Declaring that the government “doesn’t want to get in [Barbadians’] business”, he said they should also not be ducking and hiding from the Barbados Revenue Authority (BRA), the state’s main tax collection agency.
The Ministry of Finance minister made the point as he introduced the Tourism Levy Amendment Bill, which will facilitate the registration of online booking sites such as Airbnb, Expedia, and Booking.com to ensure the payment of the Shared Economy Levy.
Describing the development as a “game changer” and an example of “good public policy”, Straughn explained that the digital transfer of the Shared Economy Levy directly to the BRA by online booking platforms will eliminate the need for small operators to file bi-monthly returns using a Value Added Tax (VAT) form.
The Christ Church East Central MP emphasised that the Shared Economy Levy is not a new tax, but one introduced in the 2018 budget alongside the Airport Development Fee—which supports the Barbados Tourism Marketing Inc.—and the Room Rate Levy, which is applied to hotel stays.
Straughn noted that once the legislation is approved by both the Lower House and the Senate, online booking platforms will be required to register with the BRA, collect the levy from guests, and remit it directly to the BRA at the same time they transfer funds to hosts in Barbados.
He emphasised that the digital initiative would expand government’s cash flow as the funds will be directed to the BRA as soon as the visitor’s funds are transferred to the host. He said it would free local hosts from some of the administrative work surrounding their obligations to the state, while creating a more efficient collections process.
“Many Barbadians are participating actively with the Airbnbs, Booking.coms, and the like, putting their properties up for opportunities for many tourists to get into the communities. And you can see them walking all along Lodge Road in my constituency, in Oistins, and certainly in the Christ Church areas. This has been, I believe, a success with respect to having everyday Barbadians participate directly with respect to hosting people, visitors from all over the world,” the minister said.
Straughn added: “We were just utilising the VAT form at the time to be able to collect the Shared Economy Levy and the Room Rate Levy. What we are intending to do here is to make sure that we create and utilise the technology [to] create the opportunity whereby the administrative burden on those Barbadians will no longer be there.
“And that this actually helps with respect to improving not just the efficiency with respect to how government will collect these monies but really make it easier on our . . . Barbadians to be able to be much more compliant with respect to the levy.
“It is important for the public to understand that the government isn’t introducing anything other than easing the administrative burden on the individuals.” (IMC)
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