The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The proposed Small and Medium-Sized Business Development Agency (SMEDA) must target getting “10,000 of those 15,500” non-VAT registrants to a $100,000 annual turnover threshold, a leading consultant urged yesterday.

Mark Turnquest, of Mark A. Turnquest Consulting, said that achieving this goal would “kill all the birds with one stone” - namely increased employment, entrepreneurship and tax payments via business expansion and growth.

Noting that the Government’s Value-Added Tax (VAT) White Paper was proposing that just 3,798 firms register to pay the new tax, Mr Turnquest argued that this would not create a tax base large enough to support the Bahamas’ growing infrastructure and social needs.

With 80 per cent of the 19,253 businesses licensed in 2011, some 15,455, having an annual turnover of $50,000 or less, he called for SMEDA to focus on growing small and medium-sized Bahamian businesses to the point where they would become VAT registrants.

“Of those 15,500 businesses, I want at least half of them to move beyond $100,000, so they can pay more bills,” Mr Turnquest told Tribune Business.

SMEDA’s creation is the centrepiece of the Government’s Small and Medium-Sized Business Development Bill, which aims to create the framework to support a sustainable, thriving small business sector in the Bahamas.

Stakeholders are anticipating that the Bill will be tabled in Parliament this fall, and Mr Turnquest called for SMEDA to focus on growth-oriented activities when it came to the small business community.

“SMEDA should be focused, and putting all its efforts into, moving 10,000 of those 15,000 businesses over the $100,000 annual turnover threshold to put more money into the Treasury,” Mr Turnquest told Tribune Business, implying that economic growth was the best way to increase government revenues.

“SMEDA should not be a petty shop for small businesses. It should be encouraging, and doing a lot of activities, that bring at least 10,000 of those 15,500 small businesses over the $100,000 threshold and contributing more to the country.

“SMEDA’s core existence should be economic development, moving micro businesses up to small and medium-sized businesses,” he added.

“Making an annual turnover of $100,000 you will give more. Unemployment will go down because companies will hire more people; you’ll kill all the birds with one stone. You’ll solve the unemployment problem, you’ll solve the debt problem and grow the GDP, which will be more beneficial to our overall economy. That is the mindset we want to take forward.”

Mr Turnquest told Tribune Business that the Bahamas had been in an economic “drought” for the past seven-eight years, which was something that needed to be arrested.

He acknowledged, though, that many small businesses he had contacted recently were “very concerned” about the Government’s proposed VAT, viewing it as forcing them to increase prices.

“None of us really know what the Government is going to come up with at the end of the day,” Mr Turnquest told Tribune Business.

“As a consultant, I cannot with certainty detail the output, input or consequences for services, retail and manufacturing businesses.

“I want the Government to close on that front, and treat it as simply as possible.”

Mr Turnquest urged the Government to break down its VAT consultations by industry, so each sector could individually understand the precise impact tax reform would have upon them.