The Central Bank of Barbados says a two per cent fee on foreign purchases and payments made using credit, debit and travel cards will take effect September 1, expanding a fee already in effect for cash purchases.
The foreign exchange fee, called the FXF, is applicable to purchases made while overseas, as well as to items purchased from companies outside of Barbados. If the transactions are cancelled, the fee is refundable.
The central bank said the fee will be calculated on the Barbados dollar value of the transaction using the exchange rate on the date that the transaction was processed, not on the date that the bill is paid, and will be applied even if customers choose to be billed in Barbadian currency.
"This is because whether the transaction charge is executed in Barbadian or foreign currency, it is ultimately settled using foreign currency," the central bank said in a statement on Monday.
The FXF, which Minister of Finance and Economic Affairs Christopher Sinckler announced during the presentation of the 2017 Financial Statement and Budgetary Proposals, was imposed on cash, bank drafts and wire transfers in mid-July.
During his budget address, Sinckler had urged Barbadians to make "major sacrifices" to rescue the ailing economy.
The central bank said the foreign exchange fee does not affect a person's annual foreign currency allowance. The Barbados government initially delayed introduction of the fee for two weeks to allow for familiarisation of the types of transactions it would affect and how the fee would be applied to ensure its smooth implementation.