The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE proposed Value-Added Tax (VAT) is “too rushed and too far-fetched”, a leading food retailer said yesterday, adding that it will be a great expense to the Government and generate insufficient revenue.

Phil Lightbourne, owner of the Gladstone Road-based Phil’s Food Services, said the VAT system would be an “utter burden” on the average Bahamian citizen.

“In my opinion, the VAT system is too rushed and far-fetched. I believe that the system will be a great expense for the Government as it will generate more spending than it will create revenues,” he said.

“I do not believe that the introduction of the VAT system will allow the Government of the Bahamas to achieve its projected financial goals. Instead, I urge the Government to be cautious in its plans and actively seek measures and initiatives to reduce its substantial amount of spending.”

Mr Lightbourne added: “Some private businesses will suffer declines in the demand for their goods and services due to a decrease in consumers’ consumption. Demand for labour, particularly in the private sector, will decrease and employment opportunities will be lost.

“Businesses will be faced with additional costs such as the costs of implementation of VAT, registration, accounting and other recurring and financial costs. This means an even greater unemployment level and an increase in discouraged workers, with less people entering the labour force.”

Mr Lightbourne argued that these costs would ultimately be passed on to consumers, too.

“Income will decrease as the purchasing power of one’s income decreases. Consumers will then have less disposable income available for spending after deductions have been taken out,” Mr Lightbourne added.

“If VAT could be implemented properly and the Government deficit decreased, private saving would increase, causing investment to increase, which provides government with the necessary funds to decrease its deficit.

“However, historical data and the Government’s track record do not offer this kind of hope or any signs of positive outlook for the economy,” he added.

“The Government has not mastered any of its revenue collection, and while I feel that they could be efficient and effective, there is a great need for investment in additional human and physical capital in those areas.