The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

THE VAT Bill was passed last night by a vote of 22 to 8 - but PLP MP Greg Moss voted no, alongside all seven members of the FNM present.

The vote came after two days of sometimes bitter debate, with criticism from backbenchers of the PLP against the government. There were seven members absent at the time of the vote, including Prime Minister Perry Christie, who is due to be in Las Vegas today.

The Speaker and Deputy Speaker of the House did not cast a vote.

Concerns were raised about the effect of VAT by both sides of the House, with East Grand Bahama MP Peter Turnquest yesterday renewing concerns that Bahamians will face double taxation when value added tax comes on stream next year.

His statement was one of several from opposition members who continued to voice their strong opposition to VAT during debate in the House of Assembly.

“When we talk about VAT being added to cross border trade items subject to duty, although there has been some reductions in duty rates, you are talking about double taxation,” he said.

“You are not only going to have to pay duty on imported goods, but you are also going to have to pay VAT on the full landed value of those goods, which includes freight, insurance and brokerage fees.

“So now after you pay your Customs duty tax, you add that to the cost of landing the goods and pay an additional 7.5 per cent VAT on top of that. So now you are paying tax on top of duty. That cannot be right and we must address that.”

Mr Turnquest called for one system of tax, saying residents should either face border taxes or VAT, even if the latter must be raised to a rate of 15 per cent to accommodate abandoning duty fees.

“Give me one system. It is easier to mange and maintain and reduces my overall cost,” he said.

Mr Turnquest, pointing to comments made several weeks ago by Financial Secretary John Rolle, also renewed concerns that the proposed VAT rate of 7.5 per cent will rise soon after it is implemented.

“If you look at the other jurisdictions around the world that started with a low VAT rate, you will see that very soon thereafter, most of these countries raised these rates to 17.5 per cent or 18 per cent, some as high as 24 per cent.”

Seeking clarification over the country’s fiscal future, he asked: “What exactly will be the eventual burden on the Bahamian people with the introduction of VAT and will duty rates be further reduced to compensate for this additional expense and when?”

VAT will come on stream on January 1, 2015.