{"id":37839,"date":"2013-07-31T22:11:46","date_gmt":"2013-08-01T02:11:46","guid":{"rendered":"http:\/\/www.bahamasb2b.com\/news\/?p=37839"},"modified":"2014-02-09T22:40:42","modified_gmt":"2014-02-10T03:40:42","slug":"is-vat-too-complex-for-bahamas","status":"publish","type":"post","link":"https:\/\/www.bahamasb2b.com\/news\/2013\/07\/is-vat-too-complex-for-bahamas","title":{"rendered":"Is VAT ‘Too Complex’ For Bahamas?"},"content":{"rendered":"

\"\"<\/a>A top economist recently reiterated a decade-old call for the Bahamas to introduce a Sales Tax, warning the Government that its Value-Added Tax (VAT) plans were a mistake because \u201csimplicity is key\u201d to reform.<\/p>\n

Ralph Massey, the New Providence-based author of numerous studies on the Bahamian economy, told Tribune Business that this nation\u2019s \u201clongstanding problems\u201d in collecting all due government revenues made the \u201cclarity\u201d of proposed reforms even more vital.<\/p>\n

Mr Massey, who wrote the 2003 Tourism Taskforce on Trade Liberalisation report, with input from numerous industry professionals, reiterated calls made in that report for the Government to introduce a Sales Tax as its tax reform centrepiece.<\/p>\n

This would have been a simple levy paid by purchasers at the final Point-of-Sale, and the report set out a 10-year plan for its implementation and the phase-out of Customs duties, including the new tax\u2019s expansion to cover the services sector.<\/p>\n

Yet VAT, which is a tax levied on the \u2018value added\u2019 at each stage of the production chain, was rejected by Mr Massey and his fellow report contributors as too complex and an \u201cunnecessary complication\u201d for the Bahamas.<\/p>\n

Mr Massey said: \u201cThe principal thing of any tax system here is that it would be helped by its simplicity.\u201d<\/p>\n

While the existing import duties\/Excise tax system offered just that, Mr Massey acknowledged that its weakness – apart from being subject to trade liberalisation pressures – was the upfront inventory cost burden it imposed on importers and Bahamian businesses.<\/p>\n

Asked whether he felt the Government was making a mistake in choosing to replace import duties with VAT, Mr Massey replied: \u201cI think they are. I thought it [a Sales Tax] was simpler than the VAT.<\/p>\n

\u201cThat\u2019s it really in a nutshell. If you\u2019re going the route of a VAT, then you get into complications.<\/p>\n

\u201cIf this country has a difficulty collecting taxes, and they do, and it\u2019s a problem and a longstanding one, the best thing is to avoid increased taxation and the system should be as simple as possible. That\u2019s the way to go.\u201d<\/p>\n

Mr Massey added that a Sales Tax could still be imposed on services, which account for the bulk of Bahamian economic activity. And the tax could also be levied on the mark-ups service providers charged their customers, just like merchandise.<\/p>\n

And, just like the current VAT proposal, the well-known economist said a Sales Tax could also replace much of the hotel\/tourism industry\u2019s tax structure, such as the room tax.<\/p>\n

\u201cIf all services generated here, including the tourism industry, are included then you get the same degree of coverage that you got before,\u201d Mr Massey told Tribune Business.<\/p>\n

\u201cIf you introduce a Sales Tax on professional, tourism and medical services, then you pretty much cover the lot of them.\u201d<\/p>\n

While \u201cmore comprehensive\u201d, Mr Massey added that by its nature VAT was more complex than a Sales Tax.<\/p>\n

\u201cSimplicity is the key,\u201d he said. \u201cYou\u2019ve got to simplify the collection process, and the country does not have a good record in collecting taxes.<\/p>\n

By Neil Hartnell<\/span><\/em>
\nTribune Business Editor<\/span><\/em><\/p>\n

Read More at The Tribune\u2026 <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A top economist recently reiterated for the Bahamas to introduce a Sales Tax, warning the Government that its Value-Added Tax (VAT) plans were a mistake. <\/p>\n","protected":false},"author":13,"featured_media":37844,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10223285771444175_51037792744":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[3],"tags":[1856,1928],"class_list":["post-37839","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-mo-money-mo-problems","tag-vat-tax"],"_links":{"self":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/37839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/comments?post=37839"}],"version-history":[{"count":0,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/posts\/37839\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media\/37844"}],"wp:attachment":[{"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/media?parent=37839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/categories?post=37839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bahamasb2b.com\/news\/wp-json\/wp\/v2\/tags?post=37839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}