Barbados is a full member of the Caribbean Community (CARICOM). It has implemented CARICOM’s Common External Tariff for goods, with import duties ranging from 0 – 20 percent. Some items carry a higher import duty rate, such as: fruits and vegetables (40 percent), jewelry (60 percent), watches (50 percent), motor vehicles (45 percent), and t-shirts (115 percent). There is also an additional 1 percent environmental levy. There are higher environmental levy rates on new motor vehicles ($750 ($1,500 Barbados dollars) per vehicle), used motor vehicles ($1,000 ($2,000 Barbados dollars), refrigerators ($7.50 ($15 Barbados dollars) per refrigerator), and television sets ($5 ($10 Barbados dollars) per set. All goods imported in containers that are not made of plastics, glass, metal, or paperboards incur a 0.75 percent environmental levy on the cost, insurance, and freight (CIF) value.
Excise tax at rates ranging from 5 to 60 percent is charged on four categories of goods: alcoholic beverages, tobacco products, motor vehicles, and petroleum products. There is a 10 percent excise tax before VAT levied on sweetened beverages. A list of goods and imports that are exempt from excise taxes is available from the Barbados Customs Department.
The VAT, first instituted in 1997, replaced 11 different taxes which fell primarily on imports, including the consumption tax and stamp duties. The VAT is currently levied at 17.5 percent on most goods and services and 8.75 percent on hotel accommodations. Many basic food products and some goods and services have been zero-rated or exempted from the tax. Products that have been zero-rated or exempted include international business companies, villas, financial services, water, and medical services