The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

BAHAMIAN manufacturers yesterday said they were uncertain about what the implementation of a Value Added Tax (VAT) system would mean for the ssector, telling Tribune Business it still needed protection.

Glen Rodgers, president of Bahamas Food Packaging (Bapak), said: “Apart from the VAT, the other the other thing that concerns me is the free trade agreements.

“What’s going to happen to the manufacturers when you are competing with the same product that’s being made here as opposed to a product that’s, say, in the United States? I don’t know what’s going to happen. After that duty was put on us during the last administration, I was ready to shut down. That cost this company just in duty alone almost $500,000.”

Jonathan Cartwright, president of Cartwright’s Bedding, told Tribune Business: “I’m just wondering if the product is taxed twice, and where that puts us in terms of being competitive.

“Let’s say I make a mattress and I sell it to one of the people who retail my mattress, the furniture store. Will they have to pay the VAT, and will it have to be paid again once they sell it? I think we have to look and see if it would create more or less advantages for us. The hope of manufacturers is that the duty will not be dropped. We still want protection. We feel it is necessary for our survival. We feel we would be at a disadvantage if it were brought down.”

According to the Government’s White Paper on Tax Reform released last week, companies and investors currently receiving fiscal incentives under legislation such as the Hotels Encouragement Act, Industries Encouragement Act and Fourth Schedule of the Tariff Act would continue to get them under a VAT regime.

The White Paper stated, though, that these companies will be required to pay VAT on imports and domestic purchases.

“Furthermore, they will be required to register, which will entitle them to charge VAT on taxable sales and submit a claim for VAT paid on inputs,” the White Paper said. The Government said it was still assessing whether these businesses should be able to claim VAT credit refunds immediately, or wait for “the standard three-month refund period”.

Alec Knowles, managing director of Aquapure, said: “We trying to find out exactly how this affects us because I don’t know how it’s going to work.

“Until we sit down with the Ministry of Finance - I presume they will have a meeting with us - I really don’t know what it’s going to entail.”