...it is the wrong time to propose implementing value-added tax (VAT) in The Bahamas ...as he it would likely spawn more social ills ...if the Bahamian economy doesn’t improve in the coming months ...says Bahamas Christian Council (BCC)

Patterson: VAT may increase suffering

Christian Council head says economy too fragile for new tax

BY KRYSTEL ROLLE-BROWN
Guardian Staff Reporter
krystel@nasguard.com
Nassau, The Bahamas

With less than six months before the introduction of value-added tax (VAT), Bahamas Christian Council (BCC) President Dr. Ranford Patterson warned that it is the wrong time to propose implementing the new tax, as he believes it would likely spawn more social ills if the economy doesn’t improve in the coming months.

Patterson said while the BCC generally supports the government’s efforts toward tax reform, the timing of its introduction could cause more problems.

Patterson said he also has some reservations about the rate of the tax.

“No government can operate without tax reform,” he said. “But I believe this is a [bad] time to pose any new tax on the Bahamian people. But we understand that there is a need to tax reform.

“I believe that the lower income people in our country are going to suffer even more as a result of the implementation of VAT. I think there needs to be a balance of the time and the rate. Everything needs to be at the right time.

“I don’t think we are at the right time. There are too many people who are out of a job. There are too many people who don’t have the basic necessities.”

Asked if he believes that January would be better, he said, “If the economy remains the way it is, then the answer is no”.

“I think we’ll see more social ills. Things will get much worse if the economy doesn’t change soon.”

The government intends to bring the VAT legislation to the House of Assembly before the end of this month, Minister of State for Finance Michael Halkitis confirmed earlier this week.

He said the education campaign will pick up in earnest following the tabling of that bill. He also suggested that the education process will help ease some of the fear that the new tax has caused.

But Patterson said he isn’t sure about that.

“Everybody is weary of it,” he said.

“Everybody is afraid of the fact that what I can buy for a dollar today, it won’t be valued for a dollar tomorrow. That’s a challenge.”

He said the government must “be careful how we implement these taxes and when we implement them”.

Prime Minister Perry Christie recently expressed confidence that the economy would improve over the next six months.

He told reporters earlier this month that he is “excited” about the country’s future prospects.

July 12, 2014

thenassauguardian

The impact of an implemented Value Added Tax (VAT) in The Bahamas

'Year To Adjust' To Vat, Warns Businessman

By LAMECH JOHNSON

Tribune Staff Reporter

ljohnson@tribunemedia.net

Nassau, The Bahamas


A 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

Tribune 242