Wednesday, October 2, 2013

If the implementation of Value Added Tax (VAT) in The Bahamas is “done right” could be the solution to the nation’s financial problems

Vat Deadline 'A Recipe For Disasters' Warns Fnm

Tribune Staff Reporter
Nassau, The Bahamas

THE Christie administration is “preparing a recipe for disaster” by continuing to forge ahead with an aggressive schedule for Value Added Tax implementation, FNM chairman Daron Cash warned.
While the government has said it will stick to its July 1, 2014 deadline for enactment of the new taxation system, the draft legislation has yet to be completed – despite the fact that State Finance Minister Michael Halkitis originally promised this would be done as early as May of this year.
In addition, the promised education campaign has yet to begin, resulting in widespread confusion about what VAT will mean for consumers or businesses.
For these reasons, the FNM suggested that VAT’s implementation date be rescheduled, saying moving too soon could do more harm than good to many Bahamians who are already struggling to make ends meet.
“It means increased taxation,” Mr Cash said, “there is no question that the Ministers of Finance, both the Prime Minister and Mr Halkitis, have been less than full in their explanation to the Bahamian people.
“At the end of the day they will be taking more money out of the average person’s pockets. But the sad reality is that they have done such an abysmal job in ensuring that the average person understands what it’s going to mean for them on a daily basis.
“While breadbasket items might very well be minimally impacted by VAT, the reality is we are talking about 15 per cent in a lot of areas higher than what people are paying now. So 15 per cent on top of already high cost items will lead to the average person having higher bills at the end of the month.”
However, if VAT is “done right”, Mr Cash believes it could be the solution to the country’s financial problems.
“We have always said that even an FNM government would have considered VAT. But you cannot impose new taxes in an already fragile economy. They appear to be doing too much too soon.
“If you listen to members of the business community, many of them don’t have the information to be able to plan sensibly, reasonably and in a sufficient time for their businesses to be able to adjust.”
Mr Cash urged the government to reconsider the haste at which it is moving to pile more taxes on the average Bahamian.
October 02, 2013