Tax Coalition Chiefs Praise Pm’S ‘Fantastic’ Vat Remarks
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Nassau, The BahamasCo-chairs for the private sector’s Tax Coalition yesterday praised indications that the Prime Minister was open to pushing back Value-Added Tax’s (VAT) implementation day as “fantastic”, warning it was “paramount” that the economy be protected.
Pointing
out that the Government would not achieve its revenue-raising
objectives if the economy “went to hell in a hand basket”, Robert Myers
said he was interpreting Mr Christie’s comments positively, and as a
sign that the Government was listening to the private sector’s concerns.
And,
picking up on another aspect of the Prime Minister’s remarks, Mr Myers
said it was “ludicrous” that a wealthy, ‘informal’ sector in the shape
of web shop gaming remained untaxed as the Government moved to increase
the burden on legitimate businesses and Bahamian citizens.
Suggesting
that the Government could earn as much as $100 million per annum from
taxing web shop gaming, Mr Myers added that the Treasury would likely
earn another $50 million just by tightening up on the collection of
existing taxes.
He
especially called on the Government’s new Central Revenue Agency (CRA)
to compare bank wire transfers and drafts obtained by companies to
finance import purchases with subsequent Customs declarations, to ensure
they were not evading due revenue payments. And Business Licence
renewals also needed to be better linked with being current on tax
payments
With
these various initiatives potentially generating another $150 million
per annum for the Government, Mr Myers said successful execution would
enable it to either lower the VAT rate of possibly avoid introducing the
new tax altogether.
The
businessman told Tribune Business that the Bahamas Chamber of Commerce
and Employers Confederation’s (BCCEC) Coalition for Responsible Taxation
was attempting to “drive one objective; that the economy is protected”.
“No matter what we do with [government] revenue, the primary issue is we protect the economy,” Mr Myers emphasised.
“We
understand the need for government revenue, we support the need for
something to be done. The question is: What are we going to do, and how,
and that we protect and unequivocally ensure the economy is not going
to take a hit?
“That’s paramount here. No one wins if the economy goes to hell in a hand basket. That has always been our position.”
Mr
Christie’s comments on Wednesday outside the House of Assembly indicate
he is prepared to push the July 1, 2014, target deadline back if he
feels the Government and private sector are not ready for it.
This
is line with the Coalition’s calls for the Government to postpone VAT
implementation to a date at least 12 months from the release of the
accompanying legislation, regulations, Tariff Schedules and economic
models.
The
Bahamas is now less than eight months from the July 1 VAT
implementation deadline, with none of the above documents having been
released.
Still,
interpreting the Prime Minister’s comments as a sign the Government was
willing to dialogue with the private sector, Mr Myers said of his
remarks: “That’s great, that’s fantastic.
“We’re
very happy with his comments, and that’s the responsible thing to do.
He’s suggesting in that statement that he’s listening to the business
community.”
He
was backed by fellow Coalition co-chair, Gowon Bowe, he said the Prime
Minister’s comments indicated he wanted discussions with both it and the
wider business community.
The
PricewaterhouseCoopers (PwC) accountant and partner added that while
the Government knew it was necessary to change the Bahamas’ fiscal
course, it was “equally appreciative that if they get it wrong, it will
be catastrophic”.
Pointing
out that VAT was one component of fiscal reform, Mr Bowe said all
elements had to be bound together in one “complete and comprehensive
approach”.
“We
have to look at spending, how we manage the debt, our foreign currency
reserves and how we manage the reserves at the Central Bank,” Mr Bowe
told Tribune Business.
“So it’s a multi-pronged approach. We need to make sure we have it correct.”
Mr
Bowe added that he felt Mr Christie would not have made the comments he
did without senior officials telling him there were issues that needed
to be tackled with respect to VAT.
Mr
Christie also suggested that January’s web shop gaming ‘opinion poll’
outcome had deprived the Government of another revenue stream, something
Mr Myers agreed with.
“It’s
absolutely ludicrous to think we’re going to tax the legal entities of
this country, and the citizens of this country, while this sector
remains unregulated, open and illegitimate,” he told Tribune Business.
“It’s
absurd to think legitimate people pay taxes, and these numbers houses
remain unregulated because we’ve not figured out how to regulate them.
“It’s
not going anywhere, and we’ve not indicated we have the fortitude to
close them down. Let’s stop fooling ourselves. The numbers guys want to
be regulated, want to be taxed.”
Mr
Myers said Wednesday’s meeting with the Retail Grocers Association, and
other Bahamian retailers, went well in terms of introducing them to the
Coalition and its objectives and having them elect representatives to
it.
Emphasising
that the Coalition was not seeking to “override” or take the place of
individual industry Associations, Mr Myers said it was intended to act
as a “catalyst” and focal point through which they could all air their
VAT-related concerns to the Government.
He
added that the Coalition was now “imploring” them to submit their
industry-specific concerns to it, and provide recommendations on
revenues that the Government was “leaving on the table” or were easy to
collect.
Suggestions
had already come in from the Bahamas Diving Association and Marina
Operators, Mr Myers said, adding of the fiscal situation: “We can sit
here and cry, but we’re here.
“Now
you’re asking for a paramount change in the way we do business, and
what’s going to happen in our lives. We made a mistake, and have got one
shot to fix this. Let’s fix it. We’ve got to go down fighting.”
November 08, 2013
