The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Value-Added Tax (VAT) may not be the best fit for the web shop industry, a leading accountant said yesterday, calling it “unfortunate” that this sector was being allowed to operate without facing some form of taxation.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, said: “I think the web shops are just a part of the process that the Government has to deal with in a bigger way.

“It’s unfortunate for us to have an enterprise the size of web shops in the Bahamas operating and they are not feeling some form of taxation.

“I’m not sure that VAT is the appropriate tax for the web shops. VAT goes down to the ultimate consumer. If you tax them VA,T what they would do is just pass it on to the players. That’s not what you want.”

Mr Winder added: “You’re really saying that you have an enterprise that’s generating huge profits and they should be making more of a contribution to Government. That will not happen through VAT. Maybe they should be paying a higher Business License tax or something else, but VAT would not be the appropriate way to garner a portion of the profits that’s being generated by the web shops.”

While “games of chance, gambling and lotteries” are designated VAT ‘exempt’, the draft legislation makes clear this only applies to casino gaming or activities licensed under the Lotteries and Gaming Act.

This, once again, leaves web shops outside the tax and regulatory loop. In January 2013, the Government held an ‘opinion poll’ on whether to regulate the numbers industry. That was rejected, and Prime Minister Perry Christie subsequently announced that all web shops must close with immediate effect.

Web shop owners, however, filed an injunction to block any move by the Government from interfering with their operations. The substantive case has not yet been heard.