Thursday, January 30, 2014

The unpopular value-added tax (VAT) proposal in The Bahamas

The view of the people on VAT

The Nassau Guardian Editorial
Nassau, The Bahamas

Since the government last year emphasized its commitment to implement a value-added tax (VAT) the Bahamian people have been offering opinions.  While many accept that the government needs more revenue to meet its obligations, we think most Bahamians do not support VAT as it has been proposed.

The government issued its white paper on VAT in February 2013.  For months now commentators from the business community have offered their views on VAT to the broadcast and print media.  There is a VAT story in the business sections of the major papers almost daily.  Talk radio also regularly takes up the subject with Bahamians calling in to give their views.

For these reasons it was strange to read on Monday in this newspaper that Minister of State for Finance Michael Halkitis said the public’s slow response to the government’s VAT white paper is responsible in part for their delay in tabling VAT legislation.  Although he could not say exactly when the government will table the laws in Parliament, Halkitis did say it must happen before the end of February in preparation for the implementation of the new tax system on July 1.

The business community last year went as far as preparing a counterproposal on tax reform the government does not appear interested in seriously considering.  The people have spoken and they continue to speak on VAT.  They regularly point out the flaws in the proposed system.  They regularly point out the burdens it will cause on businesses and consumers.  They fear an increase in the cost of living at a time when unemployment is over 16 percent.

Halkitis said the government is listening and considering all concerns coming from every sector on VAT and that the Ministry of Finance has even “tweaked” some of its VAT proposals.  He didn’t, however, provide specifics as to what has been tweaked.

“When we say we are doing consultations and we are listening to alternatives we mean that,” Halkitis said.

“When we find out something or someone brings something to our attention that we may not have considered for whatever reasons, then we have to look at that to make sure that we are not disadvantaging anyone, particularly any business group.

“We have to look at what the consumers are saying to make sure there is nothing we overlooked, and so it is all a process.”

The Progressive Liberal Party (PLP) seems married to its VAT proposal regardless of the likely harmful consequences it will have on our economy if implemented.  And now, after bringing forward a poor idea, the PLP seems to be beginning to realize that its solution to the country’s debt problem is not popular.  If that realization is delaying the VAT laws from being presented to Parliament the government should not blame the people.  It is obvious who is to blame.

January 29, 2014

thenassauguardian editorial