The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The private sector has urged the Government to “make the case” for VAT ‘inclusive’ pricing, the Tax Coalition’s chairman warning that “competitiveness” lay at the heart of the business community’s counter-argument.

“We have asked the Ministry of Finance to provide the counter-argument for VAT exclusive pricing,” Gowon Bowe told Tribune Business. “I’m hoping that cooler heads prevail and all parties would be able to read both and understand why we came to a position.

“As it stands right now, I think it’s very difficult to understand the arguments in favour of [VAT] inclusive pricing given who our competitors are. If they provide that, I think that there would be a greater likelihood of agreeing to disagree.”

The Bahamas Federation of Retailers (BFR) has long advocated for the Government to revert to the initially proposed exclusive pricing method, and has warned that insistence on VAT ‘inclusive’ pricing imposes “a massive administrative cost on businesses, as everything in the country will need to be re-priced, re-ticketed, reprinted or relabelled”.

The Federation previously warned: “VAT inclusive pricing will necessitate the re-pricing, relabelling or retagging of millions of items across all of the retail stores and other businesses in the Bahamas.

“From car brochures to menus, from posted service charges at the dentist’s office to clothing, shoes, electronics and car parts, every item or service currently being sold or traded in the Bahamas will have to be re-priced come January 1, as the law is currently written.”

It also warned that thousands of extra labour hours would be required, with companies having to call in employees during the holiday season to transition to VAT inclusive pricing.

Mr Bowe said: “The Government is making clear that they are firm in their position of price inclusive. I think the business community is certainly going to make another push at that to present the argument in favour of exclusive.

“We have asked them to provide what I would call their economic advice or policy advice as to why inclusive is so superior. I think it needs to be clear that both of them have merits and demerits. They each have pros and cons.

“The business focus is on the pros of exclusive pricing because they are competing with North America by and large when we talk about our sales. Our tourist base is coming from North America, so they are used to exclusive pricing. Our general population shops in North America and so they are used to exclusive,” Mr Bowe added.

“That is more of an economic argument. It has nothing to do with policy. It is simply saying that in order to understand consumer sentiment and be able to be seen to be competitive, you want to be able to compare apples with apples.”