Tax credit incentive extended

Businesses in Barbados now have an additional six months to modernise their operations and embrace technological advancement following an extension of the government’s digital transformation tax credit.

Speaking in Parliament on Tuesday, Minister in the Ministry of Finance Ryan Straughn announced that the 100 per cent tax credit incentive, which was originally set to expire in June 2025, will now remain in place until December 31, 2025.

Straughn noted that the extension aligns with the government’s “very clear focus on digitalisation” and aims to ensure that more businesses can benefit from the initiative.

“We will be extending that benefit until the end of December 2025 to allow more businesses to be able to benefit from the application of the 100 per cent tax credit in order to digitise their businesses and to really, really drive a lot of the response in the sector,” he said.

He noted that collaboration between the public and private sectors is essential to achieving a seamless digital ecosystem.

“The reality of it is that we have to leapfrog a number of things,” he said.

“It requires the public sector working with the private sector to ensure that the authentication and the sharing of data is going to be real, such that the ease with which we can do business in the country is enhanced.”

The tax credit, introduced earlier this year under the Appropriation Bill, provides businesses with a 100 per cent incentive for expenses incurred in digitising or reengineering their processes and upgrading their systems. It initially took effect on April 1 and was scheduled to run until June 30, 2025.

With the new extension, the minister reiterated that digital transformation remains one of the government’s top priorities, noting its potential to significantly improve the ease of doing business across the country.

“This focus will be absolute as we work to ensure that the digital transition delivers real benefits for businesses and citizens alike,” Straughn said.

President of the Barbados Chamber of Commerce and Industry James Clarke commended the announcement, describing it as “a good thing”.

He however noted that there remain critical steps to be taken so businesses can begin to take advantage of the offering.

“They have to define what they mean by digital transformation so we look forward to the release of the BRA guidance document for the tax credit, ” he said.