CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.


Close

Password Reminder

Please enter your email address to receive a password reminder.

 

Log into Tax-News+
Not registered yet? Find out about our daily news alert service »

Email Address: 
Password: 

Login »

Forgotten your password?


Today’s Top Headlines




Bahamas Gov't Continues To Push VAT Positives

13 February 2014

The Bahamas Government has taken to the social media platform Facebook in a bid to win support from taxpayers over the introduction of a value-added tax in the territory.

The Bahamas Government launched the page on February 6, 2014, as part of its ongoing education campaign. Financial Secretary John Rolle said: "We want Bahamians to have access to accurate information, whether they see it in print, hear it on radio, watch on TV, or seek it through any of the popular social media sites. Stakeholders are asking for facts surrounding value added tax and its implementation process. This is another step taken as the government listens to consumer comments through various meetings and the recently launched VAT Hotline."

The introduction of a VAT has sparked debate in the Bahamas. Proponents of abandoning plans to adopt VAT have argued that it does not fit the economy of the Bahamas, and claim that that it is being introduced by the Government at the behest of the International Monetary Fund, which has been involved in its development. The Government on the other hand has underscored the importance of VAT to simplify the tax regime, cut the cost of tax administration, and balance the budget. Regular public meetings are being held in the Bahamas by both camps.

Ishmael Lightbourne, the former chair of the Bahamas Chamber of Commerce, who is acting as a consultant to the Ministry of Finance for VAT implementation, briefed a Government-organized event in Grand Bahama on January 29, 2014. He told taxpayers that, "Bahamas – like countries around the world – has to prioritize its financial activities, and find ways to raise funds to reduce its debt."

"In 1993, the country's debt stood at just over USD1bn. Today, it stands at just over USD5bn and is expected to reach USD5.5bn by June 30. VAT is expected to generate some USD525m a year, or more than USD220m more than the present revenue system, to allow government to meet its debt obligations and avoid currency devaluation. But VAT alone will not be enough," he said. Adding: "Efforts will be stepped up to collect real property tax, excise tax and other fees to make up the shortfall."

According to information published on the VAT Bahamas Facebook page, the Government has begun training its top officials and civil servants about the intricacies of VAT with support from international consultants from New Zealand and Canada. John Rolle, the Financial Secretary in the Ministry of Finance, said: "We are committed to ensuring that all partners of the VAT process are intricately involved at every stage to make the implementation as smooth and seamless as possible."

"The government has engaged consultants who have years of experience working with VAT and tax systems, processes, and procedures. Since their arrival [on] the first of this week, they have been conducting hands-on working sessions with officers and those who will become trainers. The ministry will continue to give careful attention to managing the pending change, system implementation, and communication."

The Bahamas will introduce a VAT with a 15 percent headline rate from July 1, 2014. A concessionary rate of 10 percent will apply to the business of hotels, including food and drink sold on their premises, as under the existing Hotel Occupancy Tax regime that VAT will replace.

Carol Roach, the deputy director at the Ministry of Finance's Department of Information Technology, believes that the new VAT regime will be simpler for taxpayers from an administrative perspective due to the electronic platforms the Government is setting up: "In many ways, the system the Bahamas is adopting is actually more user-friendly than current systems in other highly industrialized nations. Although we are coming into a VAT system years later than many other countries, we are benefiting from lessons learnt with regards to processes and procedures, as well as taking advantage of the latest version of the technology. This combination puts us in a position to make our collection and recovery system much more efficient than any of the ones we currently have. The Bahamas will be on the leading edge of tax administration for VAT."

TAGS: Finance | VAT tax authority guidance | VAT registration / deregistration | tax | business | value added tax (VAT) | Bahamas | property tax | training | budget | fees | food | tax authority | education | Canada | New Zealand | currency | services | VAT goods & services classification | Tax

To see today's news, click here.

Leave a comment

Read our Posting Guidelines