The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

THOUSANDS of dollars in consultancy fees could have been saved if the Bahamas government had listened to recommendations about Value Added Tax (VAT) from the local business community, Democratic National Alliance (DNA) leader Branville McCartney said yesterday.

His statements came after government officials confirmed the VAT implementation date has been postponed as recommendations from the business community and two New Zealand VAT experts are considered.

“So far, unfinished versions of the government’s tax plan, which includes a list of exemptions which may or may not be part of the final plan have been leaked through the media and allowed to further muddy the waters on this matter,” Mr McCartney said.

New Zealand VAT experts had told the press last week that despite what has been proposed in the government’s VAT plan as revealed in draft documents, a low VAT rate with “no exemptions” is the best way to proceed with the tax.

Deputy Prime Minister Philip “Brave” Davis confirmed yesterday that among other things, the government’s proposed VAT exemptions – for breadbasket items and services provided by educational institutions, religious institutions, gambling and lotteries, certain levels of residential and commercial electricity, and medical services – are not cast in stone.

He added that if people “had been listening” to comments made by Prime Minister Perry Christie, the government’s decision to postpone VAT would not come as a surprise.

“Of note was the position (made by New Zealand VAT consultants) that a Freedom of Information Act is imperative to the successful implementation of a VAT system,” Mr McCartney said. “The DNA has long called for the passage of this key piece of legislation as a means of facilitating the free flow of information to the public as well as keeping our elected officials accountable. The DNA firmly believes that like in New Zealand, the passage of such legislation in the Bahamas will work to establish a renewed trust and faith in this government’s plans for fiscal reforms.”

“VAT experts hired to advise the Christie administration on the implementation of the proposed tax regime have confirmed the long standing position of many local business owners as well as the DNA. That position? That tax reform in the Bahamas cannot succeed without the advancement of a focused and widespread education campaign. While the Democratic National Alliance believes in, and is committed to tax reforms, we simply cannot endorse the government’s handling of this effort thus far. We hope now, that after hearing the recommendations from an outside source, the Christie administration finally takes the necessary steps to ensuring that any fiscal reforms enacted are implemented with a view to stabilising the economy and improving the government’s relationship with the private sector.”