Local event promoters are up in arms and are demanding that the Barbados Revenue Authority (BRA) issues a detailed explanation of its decision to charge them 17.5 per cent Value Added Tax (VAT) on complimentary tickets, but not the National Cultural Foundation (NCF).
The move was announced in a press release dated July 31, in which BRA’s Revenue Commissioner Margaret Sivers stressed to promoters that “all complimentary items such as tickets and costumes, must be taxed at the standard rate of 17.5 per cent VAT and should be declared on the filing of their VAT returns”.
However, at least three major promoters are voicing strong concerns over the move, saying it is not feasible and has them operating at a loss. What’s more, some would like to know why the NCF has been exempted.
Veteran promoter Al Gilkes.
Veteran promoter Al Gilkes was the first to make his concerns public. Addressing last Friday’s official launch of the Hennessy Artistry show, the director of FAS Entertainment said they were ‘informally informed’ of the changes.
“We are very concerned. Two years ago we heard rumours that there were plans afoot to impose VAT on complimentary tickets. We couldn’t understand the logic because a complimentary ticket is worth nothing. It’s free. I have not seen it written down in terms of a letter to us, or an ad in the paper, but I’m told that with effect from this year, we have to pay VAT on complimentary tickets,” added Gilkes.
He stressed that this matter was of great concern to them, especially since FAS had not budgeted for the increased levies.
“We were not forewarned about it. It was not in our plans, as far as our expenditure is concerned . . . [and] where profits would be concerned.
“It means that it’s going to impact on us,” he said, explaining that as part of its contractual agreement with sponsors, FAS was committed to providing them with complimentary tickets without being able to charge them VAT.
Gilkes however made it clear that his group was not opposed in principle to paying the VAT, but for them “it’s about not having been forewarned [so] that we could have made our budgeted preparations [and] we could comply with that situation”.
Unlike Gilkes, promoter Tremayne Austin of Brewster’s Road Crew said he was aware of BRA’s decision from Crop Over, but he was still not ready for the impact it had on the 10 parties he hosted during the season.
“All 10 of my events were [subjected] to it,” he told Barbados TODAY, while complaining about the way the matter was handled by the revenue authority.
“It was new to promoters. So what I’m basically saying is they [BRA] should have come at the end of last year and said, ‘effective January 1 going forward, this is what we will be doing. You have to pay 17.5 per cent on all passes’. Anything so! That I could understand, because you would have now put me in a position to make adjustments [but] for you to come in the middle of the year when Crop Over is now starting, I have a problem with that,” he said.
Austin further complained that the decision was not implemented across the board, pointing out that shows put on by the NCF were not subject the decision on the VAT.
He said when he had raised that concern with BRA officials, he did not like the response he got, since, in his estimation, “nobody gives away more passes than NCF”.
“So why implement it to just us, why not to them? And if you don’t pay those taxes and those costs, you are not given permission to hold the event,” Austin noted.
He said that all he had wanted was for show organizers to have been adequately notified of the decision, instead of BRA just “springing it on them”.
“If you come at the last part of the year and state, ‘well, this is what we are going to do and this is what we are doing going forward’, people can then brace themselves for it, or make adjustments to their budget.”
However, he said “when you get sponsorship from a major sponsor and they request passes, I can’t go back and tell the people they have to pay the VAT”.
Austin stressed that “when you have this extra cost in the budget and you’re not looking for it, it kind of throws you off guard and it actually put us in a spin because we end up now having to pay an excess that was not there or that we were not expected to pay and that puts us in a financial bind at the present moment”.
Director of Scrawl Up Edward Forde agreed that the situation warranted urgent review.
“I think that whoever is responsible for the entertainment industry has to really look at that, because if I’m giving away something at a zero cost to promote my fete, I can’t ask [sponsors] to pay for them.”
Forde said the increased taxes would definitely affect his group’s revenue.
When contacted today, a spokesman of BRA, who did not want to be identified, referred Barbados TODAY to the July 31 press release issued to all promoters, saying they should have been aware of the changes.
However, the NCF’s corporate communications spokeswoman Simone Codringtion said she was not aware of the BRA statement and therefore she could not comment at this stage.
davandrababb@barbadostoday.bb
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