“We
always knew that the bursary system was a temporary one at best and that we
would have to find a permanent replacement for that by identifying . . .
resources to assist in those circumstances.”
Barbados Minister of
Finance and Economic Affairs Chris Sinckler commenting on the 22% VAT (Value
added Tax) on Voice and data Calls from cellphones and other mobile
transmitting services
Smartphones
must be getting super popular in Barbados.
This
as they've now imposed a 22% VAT (Value added Tax) on Voice and Data Calls from
cellphones and other mobile transmitting services as reported in the article “Barbados
hopes to raise millions from taxes on cellphone use”, published Wednesday,
December 16, 2015, The Jamaica
Observer.
The
tax as announced by Minister of Finance and Economic Affairs Chris Sinckler
goes into effect on Friday January 1st 2016 and is intended to raise
BDS$14 million, which translates to JA$840 million annually to fund University
scholarships. The broad definition to include any mobile transmitting devices,
implies they are also taxing any form of telecommunication, be it Voice or Data.
For
those of you confused up to this point, I'm not from Barbados, but I like the
island, begin as Barbados reminds me of Portland.
Rather,
this is a telecoms article as it seems that smartphones and other mobile
transmitting services must be HUGELY popular on this small island to even merit
having a 22% VAT (Value added Tax) on Voice and Data Calls.
So
what could these devices be that have attracted the attention of the Government
of Barbados?
Barbados 22% VAT - How
to raise BDS$14 million for University Scholarships funds for Bajans
The
aim of the Barbados Government it to replace the recently implement Bursary
Awards system implement back in 2014 to help some 3000 Barbadian students
having difficulties at the UWI as noted in the article “Barbados
govt offers 3,000 bursaries to help students attend UWI”, published
Saturday, July 12, 2014, The Jamaica
Observer.
Good
to note they've stopped receiving full support in paying UWI fees from the
Government of Barbados since August 2013 as announced by Minister of Finance
and Economic Affairs Chris Sinckler as noted in the article “Barbados
Cancels Free UWI Tuition”, Published Thursday August 15, 2013, The Jamaica Observer.
Naturally,
being UWI students, they mounted protest as paying as much as BDS$65,000 or
JA$3,908,112 per annum was beyond the pocket of many of the parents of this
really, really small island as noted in “B'dos
students to pressure gov't to reverse UWI fee decision”, published Tuesday,
August 20, 2013, The Jamaica Observer.
However,
these protests fell on deaf ears as the Barbadian Government, which was under
financial strain, realized that some Barbadian could afford to pay for their
children's UWI Tuition and may be abusing a system that was meant to emphasize the
importance of education in building Barbados.
Also,
many Barbadians who got access to free education did not return to Barbados to
build the nation, opting to leave the country altogether for place that offered
better job prospects such as the US of a, Trinidad and Tobago and Jamaica.
This
brain drain clearly had to be stopped as it could not be the case that Barbados
was giving free education to its citizens only for them to leave the island and
help the developement of other countries such as Jamaica!
So
for two (2) long years the students form Barbados, even those attending Cave
Hill Campus to do Law had to pay what was previously a free ride through UWI.
Until now!
Barbados copies Jamaica
Telecom Tax – Cellphone Ban backfired and copying Jamaica
Fast
forward to December 2015 and the Barbadian Government, apparently noticing the
increased use of smartphones among Barbadians, is taking action.
In
fact, Bajans in school love smartphone so much that Minister of Education,
Ronald Jones, had to ban them from all nursery to secondary level earlier in
June 2015 as reported in “Govt
reconsidering cellphone ban”, published June 20, 2015, Barbados Today.
They
only recated after public pressure from parents, who now have to sign a
comprehensive new code of conduct prepared by the Ministry of Education as
noted in the article “Students
may get the okay for phones”, published 18 October 2015 by Roy R. Morris, Barbados Nation News.
Since
Smartphone and other mobile transmitting services e.g. tablets, phablets,
Laptops and chromebooks most likely, were becoming more popular, a VAT on their
usage seemed fair. The VAT is to be used to create a University Scholarship
fund to help the genuinely needy Barbadian students to attend UWI.
This
22% VAT sounds a lot like the Jamaican Tax on Cross Network and International
Calling implemented back in May 2012 as explained in my blog article
entitled “GOJ
taxes Telecom Providers and OUR sets Cross Network and International Calling
Rate at JA$5.00”.
Back
then there was a lot of protest, mostly from the Telecom Providers.
Jamaican
Telecom Providers eventually accepted the Telecom Tax, especially as it was
going towards the USF (Universal Service Fund), the Telecom Fund for Education
and bringing CAP (Community Access Points) for Internet across Jamaica.
It
also funds the TIS (Tablet in Schools) Programme which will be changing gears
come January 2016 with a focus on Primary schools as noted in my blog article
entitled “700
Tablets for East Kingston and Port Royal Primary Schools - Why Raspberry Pi
Zero Great for Jamaican Secondary Schools”.
Barbados copying
Jamaica - Helping Barbadian UWI and expanding the Internet to all
The
Barbados Government, recognizing that the Jamaican Tax on Cross Network and
International Calling is working, since 2012, is keen to implement such a
similar measure in Barbados.
However,
Minister of Finance and Economic Affairs Chris Sinckler was cautions in its
announcement, as they did not want the tax to slow down the growth and usage of
smartphone, phablet and other mobile transmitting services on the island,
quote: “Government has to be very
mindful of not acting in a manner as to put a brake on the productive advance
of cellphone and mobile technology in our economy, because it is such an
important part of doing business, making business more efficient and accessible”.
Hopefully,
the 22% VAT on Voice and Data Calls from cellphones and other mobile transmitting
services will benefit the Barbarians. This was clearly on Minister Chris
Sinckler mind as the was also thinking of the future when he made this
declaration in parliament, quote: “All of these things were in the back of the
minds of the administrators and policymakers, certainly in my mind, when we
were thinking about the imposition of this particular tax”.
I’d
also recommend that the make it mandatory that VoIP provider have to apply for
a Telecom License in order to terminate voice Calls in Jamaica as Jamaica’s Minister
of Science Technology Energy and Mining has pointed out in my blog article
entitled “Minister
Paulwell says VoIP Providers must Register to Terminate - Why WhatsApp may no
longer be Free as IXP by January 2015, MNP by May 2015”.
With
this initial step, Barbados will push the country forward, both in terms of
increased financial assistance to Barbadian UWI students as well as expanding Internet
access across the Island of Barbados.
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