The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian retailers will meet tomorrow to further their bid to create an industry Federation, with sector players warning it would be “catastrophic” not to warn the Government about Value-Added Tax’s (VAT) likely impact.

Tribune Business has obtained e-mails, following last week’s meeting between retailers and the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) Tax Coalition at Super Value head office, warning that VAT will “kill future growth and jobs in retail”.

One retailer, suggesting that the Coalition was “attempting to bring sanity to the Government’s ill-thought out approach”, joined Robert Myers, its co-chair, in describing the failure to regulate and tax web shop gaming as “insanity, pure and simple”.

Tara Morley, general merchandising manager at Cole’s of Nassau, said in an e-mail blast to fellow retailers that the next meeting “to formalize a Retailers’ Federation and lay out a path for this organisation going forward” will be held tomorrow at 2pm.

She added that it was “truly inspiring” that the Bahamian retail industry was joining forces to address VAT, based on the attendance at the Super Value head office meeting.

Adding his voice to the debate, Etienne Christen, operations manager at Lebco Ltd, owner/operator of the Tommy Hilfiger and his fashion stores, plus the Fab Finds and My Favourite Things gift outlets, warned via e-mail: “If we don’t act now and get organised, then the Government will pass the VAT legislation without any feedback from our sector.

“That would be catastrophic. We must make sure that our voices are heard. At this meeting we will be electing a head of retail for our association that will sit with the Bahamas Chamber of Commerce and Employer’s Confederation Tax Coalition, which is attempting to bring sanity to government’s ill-thought through approach to fixing our budget by simply taxing businesses more.”

Mr Christen added: “At a time where the economy is still trying to get on its feet, a tax increase will kill future growth in retail, and jobs in retail, moving forward.

“We must make sure that the Government understands this simple and obvious reality that we, as business people, understand readily. The notion that illegal web shops continue operating tax free, but legitimate businesses are to be taxed more, is insanity, pure and simple.”

Joining the chorus of criticism, the Democratic National Alliance (DNA) described as “utter nonsense” the Prime Minister’s insinuation that the web shop gaming ‘opinion poll’ vote had left the Government with no option but to implement VAT.

The DNA, in a statement released yesterday, said this showed that contrary to the Government’s public statements at the time, it did indeed have “a horse in the race” when it came to the outcome of that ‘opinion poll’.

Questioning why the Government never tied the web shop gaming vote’s outcome to VAT at the time, the DNA added: “The DNA wishes to make it clear we are in no way in support of the current legislation to enact Value Added Tax as a pretentious means of saving our over-strapped economy.

“While the PLP are pandering to special interests, and buckling under pressure from the World Bank and the IMF, many Bahamians are watching in bewilderment and disdain....... The implementation of VAT has the potential to cause further unemployment, closure of businesses and pure misery.”

As an alternative to the net $200 million revenue increase the Government is seeking from VAT, the DNA suggested that the Central Bank of the Bahamas’ discount rate be lowered by 1 per cent.

This, it added, would reduce the Government’s annual debt servicing (interest) payments by $100 million per year, and reduce private sector borrowing costs by $200 million.

The party also suggested the creation of a National Procurement Agency to save the Government another $200 million annually.

The DNA, calling on the Bahamas to follow the leads of Iceland, Hungary and the Turks & Caicos Islands in resisting the implementation of VAT, added: “It seems however, that the PLP are determined to ram VAT down our throats while they sit in the House of Assembly insulting one another and laughing, instead of seriously discussing how to better the quality of life for all Bahamians, in particular the poor among us.

“VAT’s implementation in the New Year is nothing we should take lightly with an already depressed economy and massive unemployment.”