Why You May Pay G.S.T. for Electricity and More for Beer and Cigarettes

Dean Barrow

Those who enjoy the vices of beer and cigarettes will have a bone to pick with the Prime Minister. But what could cause a potentially larger problem is the reduction of the threshold for payment of the General Sales Tax on electricity bills. Presently, the twelve-and-a-half percent tax is payable on bills above two hundred dollars, but if the threshold is reduced to one hundred dollars, the Prime Minister hopes it will not badly hurt considering the rates in existence for electricity.

Prime Minister Dean Barrow

“That’s it exactly, the question of trying to get at the objective but ensuring that there is minimal pain, and that the pain is distributed – such pain as there is, is distributed in such a way that the most vulnerable are protected; that you don’t cripple business – those sorts of considerations. The ‘sin’ taxes – those haven’t been raised for years and years and years, donkey’s years; so we felt that that’s an area that was ripe for some kind of picking, we did see that as low-hanging fruit. Lowering the threshold in terms of the electricity bill before you pay G.S.T., again, we did not a scientific survey, but we did an unscientific sampling, and we found that poor people don’t pay electricity bills of over a hundred dollars, so when we lowered the threshold to a hundred, we didn’t think we would be hurting poor people; remember that their bills are lower as a consequence of the fact that electricity rates have been coming down.”

The Prime Minister says the tax on cigarettes in the Free Zone is a response to complaints from Mexico and Guatemala about contraband selling in their countries, among other things.