Barbados: Tax measures in 2026 budget

Direct and indirect tax proposals

The Minister of Finance on March 16, 2026, delivered the 2026 budget statement, which included the following proposed tax measures:

Increase in value added tax (VAT) registration threshold from $200,000* to $350,000 effective October 1, 2026
Extension of 100% tax credit for business digitization through 2027
Designation of rental cars as "eligible tourism services" subject to reduced VAT rate of 10% (subject to 60% foreign exchange revenue)
Duty-free access to spirits and removal of duties/VAT on commercial kitchen equipment for stand-alone restaurants
Extension of VAT and excise tax holiday on electric vehicles (EVs) until March 31, 2029 (with 10% import duty)
Two-year extension of duty/VAT waivers on residential generators, transfer switches, water tanks, and pumps
Various individual tax relief and social support measures, as well as cost of living and consumer relief measures

Read a March 2026 report prepared by the KPMG member firm in Barbados

*$=Barbadian dollar

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Barbados: Tax measures in 2026 budget

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