US$15M DEAL

THE Government of Barbados has entered into a loan agreement with the Latin American Development Bank, referred to as the CAF, for US$15 million to finance the Tax Administration Infrastructure Reform Programme.

Minister of Finance and Economic Affairs, Christopher Sinckler, met with Director Representative of CAF in the Republic of Trinidad and Tobago, Joel Branski, yesterday morning for a signing ceremony at Government Headquarters.

“This US$15 million loan for the Tax Administration Infrastructure Reform Programme will strengthen the capacity of the Barbados Revenue Authority (BRA) and the Customs and Excise Department (CED) to carry out their mandates,” Sinckler remarked.

Noting that the Cabinet of Barbados on November 9, 2017 agreed that the Government of Barbados would enter into the loan agreement, Sinckler revealed that the programme will be implemented over a two-year period for a total cost of US$18.93 million, of which US$15 million will be provided from the CAF loan.

“The Government of Barbados will provide the balance, to the value of US$3.93 million or 20.8 per cent of the Programme in counterpart funding,” Sinckler said.

Sinckler noted that the programme’s main objective is the improvement of tax administration processes and the technological integration of the administration systems, the modernisation of control equipment in customs and the development of studies in order to support tax reform and the fiscal adjustment programme.

The Barbados Revenue Authority (BRA) will act as the executing agency he said, and will be responsible for the overall financial management and implementation of the programme. The Customs and Excise Department will also work closely with the BRA to implement the programme over its life, given its role in revenue collection and border security.

It was also noted that the programme will have three components, the first of which is an Integrated Tax Administration System (ITAS) for the BRA, representing approximately US$8.15 million or 43.1 per cent of the programme.

“This component is intended to acquire and customise an off-the-shelf system for the administration of the various tax enactments under the responsibility of the Barbados Revenue Authority. It also includes various complementary activities such as the transfer of technical and business application knowledge, ICT for the Barbados Revenue Authority, training for BRA personnel, officials and final users of the system, business intelligence, etc.,” Sinckler revealed.

Adding that there are currently five systems used by BRA to administer taxes, with no interface of data sharing among them, he stated that this system will be configured to address this shortcoming.

Component two meanwhile involves the acquisition of Customs Scanners (approximately US$6.48 million or 34.3% of the programme) to beef up security at the Grantley Adams International Airport and the Barbados Port Inc. for better detection of contraband and illegal substances, as well as the detection of dutiable items. Additionally, Sinckler revealed that this component will also provide for investments in infrastructure adaptation in the passengers’ arrival terminals at both ports of entry and the training of customs, port and airport personnel.

Component three will see an analysis of the tax reform process being carried out to determine its main challenges and achievements, and proposed next steps to complete the reform. This aspect represents approximately US$2.03 million or 10.7 per cent of the programme. (RSM)