Electricity bills showing early VAT hike
YOUR LIGHT BILL may be higher this month because the 2.5 per cent VAT hike that was imposed in the November 22 Budget is being applied to it.
Stephen Worme, manager of marketing and corporate communications at the Barbados Light & Power (BL&P), confirmed this. Worme explained that Section 16 Sub-section 4 of the VAT Act states that in the case of electricity, which is a product that is consumed continuously and billed at a point, VAT was calculated and applied based on the date that the invoice was produced.
The move by BL&P has however angered some customers, who are querying why their bills for the energy used in the month of November have been calculated at 17.5 percent Value Added Tax (VAT). “When Government increased VAT in the recent Budget, it was stated that the new rate would come into effect from December 1, but the utility company is telling me that once the bill is dated for December the new VAT rate would be applicable,” said an irate BL&P customer.
Calling the billing an unfair move on the Barbadian society, the customer, who normally received his bills for the period ending December 1, said if the companies knew that the VAT would be calculated in such a way they should have taken the meter reading and created bills for the month of November.
“The bill increased by just around $5 to $7, but the amount does not matter; it is the principle behind this whole situation that is frustrating,” the customer said before asserting that the Government was making decisions without thoroughly thinking through the processes and the application.
When told about the customer’s concern, Worme said some queries regarding the VAT issue had surfaced, but when the changes were made they checked carefully to see what their requirements were. “What we have done is under the instruction and what the law requires for how we bill electricity,” he said.
“We have been advised that the rate of VAT is calculated by whatever amount of VAT is applicable on the date the invoice has been produced, so while the major portion of his consumption would have been in the month of November, under the act it is when the invoice is produced,” Worme said.
He said although many customers did not understand the approach, he was sure that “all of these factors would have been taken into consideration when they were developing the [VAT Act] and would have reasons for doing it that way as maybe doing it any other way would have led to complications”.
Annette Weekes, director of VAT, said customers who had any queries were free to come into the VAT Division and have someone work with them to look at a bill to gain an understanding of what took place. Weekes said she recognised that there were several factors which were of concern and the issues would be addressed. (LK)