||Central Bank Of Barbados
The two percent (2%) fee on purchases of foreign currency that was first
announced by Minister of Finance and Economic Affairs, Christopher Sinckler,
during the 2017 Financial Statement and Budgetary Proposals will now go into
effect for cash, bank drafts and wire transfers on Monday, July 17, 2017.
Credit, debit and travel cards will become subject to the fee from September 1.
The fee, which was initially supposed to be in place from July 1, is intended
to raise revenue for the Government.
Central Bank of Barbados Acting Governor, Cleviston Haynes, whose organisation
will oversee the rollout of the fee, explained that the delay is to allow the
public to become familiar with the new fee. “These additional two weeks will
give us the opportunity to educate Barbadians about the Foreign Exchange Fee so
that they are clear on what types of transactions it relates to and how it will
be applied. This will help to ensure that there is a smooth and orderly
introduction of the FXF.”
Haynes revealed that the extended lead time for credit, debit and travel
cards is to allow commercial banks and other credit card providers a longer window
to adjust their computer systems. “We have been in consultation with The Barbados
Bankers Association and, based on their feedback, we will provide them with
additional time to complete the work that needs to be done so that cardholders
will be able to clearly identify what portion of their payment for foreign
purchases is due to the FXF.”
The FXF will be applied to the Barbados value of
the foreign currency transaction. From July 17, persons
buying US$500 in cash at a rate of 2.02857 will pay $1,034.58 instead of $1,014.29,
as shown below:
All persons conducting purchases of foreign
currency will be required to pay the FXF, except residents and non-residents
making payments from their foreign currency accounts, including entities in the
International Business and Financial Services (IBFS) sector. The FXF is also
not applicable to foreign currency sales related to the settlement of
transactions for the bulk purchase of petroleum, diesel or jet fuel, where
documentary evidence has been provided to the authorised dealer.
In the coming days the Bank will carry out a public education campaign. We
will be placing pamphlets in the commercial banks and other key locations; we
will be producing videos that will be broadcast on television and posted on our
social media channels; and of course, our website will have detailed
information on every aspect of the FXF. In addition, we encourage anyone who
has questions about the fee to contact the Central Bank.
The Bank also issued a guidance note to the new Foreign Exchange Fee.
Guidance Note on Foreign Exchange Fee (FXF).pdf