'Year To Adjust' To Vat, Warns Businessman
By LAMECH JOHNSON
Tribune Staff Reporter
ljohnson@tribunemedia.net
Nassau, The BahamasA DOWNTOWN businessman believes it would take the Bahamas at least a year to adjust to the impact of Value Added Tax if it is implemented this July.
Although
it was not an official declaration that VAT will be off the table,
Finance State Minister Michael Halkitis told the media that the
government will now consider revisiting all proposals in the wake of the
proposed regularisation and taxation of web shops.
Dennis
Halamino, the proprietor of the Tropicana Club and the Casablanca bar,
told The Tribune, however, that if VAT is implemented, “it’s going to
take about at least a year for the country to adjust to the change.”
“I hope they know what they’re doing because they’re taking a big risk,” he added.
In
Parliament last week, Tourism Minister Obie Wilchcombe announced that
the Government will regularise and tax webshop gaming by July 1 after
more than a year of speculation following the “No Vote” in the 2013
Gaming Referendum.
Mr
Wilchcombe revealed that the government will bring regulations to the
House of Assembly within the next two weeks that will legalise the
industry.
Following
this, Mr Halkitis told the press that if the government is able to
“realise revenue” from webshop gaming then it could possibly “relax” on
other revenue raising measures.
“Based
on the system as it is, if we can implement the regulation of the web
gaming and begin to realize revenue from it, then we may have the
opportunity to revisit all the proposals that we have to determine okay,
if we now can get ‘X’ amount of revenue from here, does that give us
flexibility to relax on this other side, and that’s a conversation that
we will have,” he said.
Mr
Halamino told The Tribune last Friday that businesses like his, which
depend on thousands of tourists, will be significantly affected by VAT.
“It will affect business for any person who has customers, whether small or large,” Mr Halamino said.
“The
prices are going to rise up and the Bahamas is already an expensive
location because of the high standard of living. With this VAT coming,
it’s going to make the place less commercial and less viable for people
to come here and for entrepreneurs to do business.”
Mr
Halamino said he’d be able to stay open with the same number of people
on staff; however, he noted that VAT is coming at a “bad time”.
“It
comes in a slow season and it will make things worse. If they are
inclined to implement VAT, they should push it back to January through
April next year when the most tourists and other clients come into the
country. But they (government) want to do it from the mid-year to
November or however long. And that period is the worst months for
businesses like mine. That will make business even slower.”
He
believes the government should seriously consider alternatives to VAT
and if it is still inclined to implement the new tax measure, they
should not only take the proper steps to ensure its collection but also
consider a rate that will not cripple businesses and consumers alike.
The
Government is proposing to implement Value-Added Tax (VAT) on July 1 at
a rate of 15 per cent, with the hotel industry to be subject to the
lower 10 per cent rate. The Government expects to generate an additional
$200 million in revenue from the new tax regime.
March 10, 2014
