By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) yesterday advocated that the Government implement a ‘dual taxation’ system via Value-Added Tax’s (VAT) introduction, with “private individuals” continuing to pay full customs duties on their imports.
Finally offering its official response to the 2013-2014 Budget, the BCCEC said it had also started talks with the Government about it taking over the issuance of new and renewal Business Licences.
The chief private sector organisation, which purports to represent 90 per cent of Bahamas-based businesses, argued that allowing it to take over the Business Licence process would be a ‘win-win’ for all parties and “a wonderful display of public-private partnership”.
And, when it came to tax reform, the BCCEC urged that Customs duties be reduced simultaneously with VAT’s July 1, 2014, arrival - but only for what it termed “licensed and qualified importers”.
Seemingly advocating that Bahamian businesses and their brokers pay only VAT and Stamp Duty on their imports, BCCEC chairman Chester Cooper - in a statement issued to Tribune Business - said this would enable companies to cut prices to consumers, and thus become more competitive against rivals in Florida and elsewhere.
However, the BCCEC argued that existing import duties continue to be levied on private individuals and other importers at existing rates.
Explaining how this system would work, Mr Cooper said: “We eagerly await discussions on the harmonisation of Customs duties with the new VAT.
“Rather than increases in Customs duties, we would anticipate reductions in line with WTO mandates and also to avoid excessive taxation.”
Then, detailing his suggestion for a two-pronged approach to VAT’s implementation, Mr Cooper added: “In an effort to promote and support the sustainability of the local merchants and businesses in the Bahamas, particularly in the wholesale and retail sector, it is our recommendation that the Government remove the import duties for all licensed and qualified importers, and charge the traditional Stamp Tax and the new VAT instead.
“Customs duty, however, should continue to be levied on private individuals and importers of goods. That way, the wholesalers, retailers and other qualified importers will be able to start offering their products to the general public at much lower rates, essentially competing with the exporting countries for the same goods.
“This will be a good approach, especially since all importers are now required to pay as much as 1 per cent of the value of their imported goods as a Customs processing fee,” the BCCEC chairman added.
“The Government will earn its revenue through stamp tax, VAT and the processing fees, along with full duty charged and payable to all other non-qualified persons.”
Mr Cooper said those ‘qualifying’ for reduced Customs duties would include all companies in “good standing” and possessing a valid Business Licence, and who were BCCEC members.
The latter aspect, Mr Cooper added, would help the Government to “monitor” these importers and their activities.
The other notable initiative outlined in Mr Cooper’s statement was the BCCEC’s attempt to take over the administration, and issuance, of Business Licences. No mention was made about how the funds generated will be handled, although presumably the BCCEC will collect, then remit, them to the Government.
“BCCEC has initiated discussions with the Government of the Bahamas to take over the annual Business License services for both the issuance and renewal of Business Licenses,” Mr Cooper said.
“We believe that this will be a wonderful display of the public-private partnership where everyone benefits from this initiative.
“BCCEC proposes to improve the efficiency of the process, upgrade the infrastructure and maintain a more accurate register of licensees, and more efficient collection and accountability of fees, well as improve upon the statistical and data collection and management.”
The BCCEC also hit out at the increased incentives for Bahamians to ‘shop in Florida’, with Customs exemptions now being extended to children under 12 years-old upon return.
“How is the business community expected to compete and provide a reasonable service while trying to sustain their businesses?” Mr Cooper asked.
“Consider the Bay Street or Over-the-Hill merchant, for example. They have to buy an item at cost from their foreign supplier, pay for exchange control and wire transfer charges, pay for shipping, freight and handling, pay for Customs brokers to clear their freight on arrival in the Bahamas, Customs duty and Stamp tax, and now they have to pay 1 per cent to have their Customs application processed, pay for trucking to have their merchandise delivered to their locations (consider the additional cost to have these items delivered to the Family Islands).
“Then add on margins, all before they are able to sell the first item. We put the merchants through this very onerous and expensive process, then we give Customs exemptions to individuals to import their products from abroad.”
Mr Cooper and the BCCEC urged the Christie administration to “revisit” the huge Business Licence fee increases being imposed on the ‘low margin, high volume’ food stores.
“This is a recipe for unemployment, increased food prices and further burden on the masses the Government believes it is trying to help,” he added.
“Further, the double whammy of price control and higher taxes pushes many healthy food choices out of the price range of those that need it most, indirectly impacting the already unhealthy populous.”
Comments
ohdrap4 11 years, 5 months ago
That sounds like discrimination to me. How about an interview with a salaried guy who does not want his costs increased?
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