The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Tax Coalition co-chair says his own companies are not “prepared to pull the trigger” on potential expansion projects due to the continuing uncertainty over Value-Added Tax (VAT).

Robert Myers, in an interview with Tribune Business just prior to the Coalition for Responsible Taxation’s meeting with the Prime Minister this week, said the inability to budget because VAT’s impact was still unknown was “very frustrating” for the private sector.

And he reiterated that VAT and fiscal reform had to be part of a wider conversation involving issues such as productivity, efficiency and competitiveness, all of which were “denting” the Bahamas’ gross domestic product (GDP) and economic growth.

With the VAT legislation and regulations yet to be finalised, and the guidance notes and revised Tariff schedule still not released publicly, Mr Myers said: “It just means none of us can run any budget and understand what’s happening.

“I can make provisions, but it’s very hard for us to run any budget. That’s what’s very frustrating. With all that’s being said, I don’t understand why they don’t back up the date.”

The repercussions, the Tax Coalition co-chair added, were that many Bahamas-based companies were electing to put potential job-creating expansions, and investment projects, on hold because of uncertainty.

Speaking from experience as the principal behind VTrade and the Caribbean Group of Companies, Mr Myers told Tribune Business: “What’s happening now is that we’re being told people are considering not doing various things until the understand what implications this will have.

“We’re doing it. We’ve got a couple of ideas in the pipeline we’re not prepared to pull the trigger on until we understand the facts and what the implications of this are going to be.

“It’s hard to even act on it until the legislation is passed. It’s just causing the public a lot of anxiety, unnecessarily perhaps.”

Mr Myers also echoed previous arguments by the Coalition and Citizens for a Better Bahamas that the fiscal reform discussions should be much broader than just VAT, focusing also on the country’s governance.

“We need to improve productivity and competitiveness, which I think is denting our GDP growth,” he told Tribune Business.”We’ve got to have greater efficiency and greater competitiveness, otherwise we’re losing competitiveness and market share.

“The ease of doing business, productivity and competitiveness; these things have to improve, otherwise we continue to slip or we lose our market share.”

Pointing out that technology and air travel had made the world a much smaller place, Mr Myers said trade barriers were also falling and the Bahamas was facing ever-increasing regional and international competition.

Taking the tourism and hotel industry as an example, he said consumers were now able to go online and compare prices and attractions in different nations, something they had not been able to do 10 years ago.

There are fears that VAT will make the Bahamas, already a high-priced destination, even more expensive and potentially price it out of the market.

“If you are not globally competitive, you get pushed by the wayside,” Mr Myers told Tribune Business, “or at least, regionally competitive.

“If someone in the US is looking to go on vacation, and the Dominican Republic is 35-40 per cent cheaper, wouldn’t they likely go there rather than the Bahamas? The likelihood is very high.

“I understand the Government’s desire to get some sort of additional revenue in. It’s just a question of what.”