The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

MORE than 100 retailers have joined an industry federation opposing Value-Added Tax’s (VAT) introduction, its co-chairman charging that Barbados’s predicament had “completely dispelled” the assumption the tax was a “magic bullet” for this nation’s fiscal woes.

Etienne Christen, operations manager at Lebco, owner/operator of the Tommy Hilfiger and his fashion stores, plus the Fab Finds and My Favourite Things gift outlets, told Tribune Business that the Bahamas Federation of Retailers (BFR) at last count represented 107 retail operations in the Bahamas .

These operations have a current employee count of just over 2,000 people. “We are still receiving employee count figures from many of our businesses that signed on from the beginning,” Mr Christen said.

“Now that the busy Christmas season is over, we expect the employee count number to rise dramatically over the next few weeks as the retail businesses that are already on board will refocus on the VAT debate and submit the information we have requested from them on employee count numbers and other matters.

“We will also be continuing our outreach campaign via e-mail, social media and traditional media, so we fully expect to have more retailers on board as people come out of the busy holiday period and focus on VAT. Many people are really only paying attention to the issue now for the first time, and they are expressing their discontent with the Government’s proposed timeline for implementation and the proposed rates for the VAT.

“We had many people reaching out to us over the holiday period and letting us know that they would be looking to join up in the New Year. We look forward to increasing our membership in 2014 as the debate picks up speed,” said Mr Christen.

“The country needs tax reform, but it is far from clear that VAT is the right solution. Our message remains consistent: Delay the VAT implementation date, look at the alternatives seriously, and then work on finding a solution that combines spending cuts and the enforcement of existing taxation with some of the tax alternatives put forward by the Coalition.

“If, after that, more revenue is still needed, then further solutions can be considered, but the assumption that VAT is the ‘magic bullet’ that can fix our problems has been totally and completely dispelled by VAT’s recent failure to fix the fiscal problem it was meant to solve in Barbados.

“Bahamians should read up on the Barbados experience. VAT didn’t solve their problems either. Bahamians must realise the IMF’s people don’t have to live in the Bahamas, and that means that they don’t have to live with the consequences of the policy proposals they are putting forward. More importantly, them not being Bahamian, they have little understanding of the reality of our economy, our politics or our way of life.”

Mr Christen sadded: “We respect that the country has a fiscal problem and the IMF is right to point that out, but that doesn’t mean that they have all the answers. The IMF is better at describing the problem than providing solutions.

“We, as Bahamians, need to find solutions to our problems; that is the essence of Independence.”

Mr Christen said VAT will increase the cost of living for every Bahamian. “Ignoring the business community would not be wise, as it could jeopardise the fragile but expected economic recovery of 2014,” he added.

“No country grows itself out of a recession by increasing taxes. Given that unemployment currently stands above 16 per cent, it would be very unwise for the Government of the Bahamas to rush VAT and thus jeopardise the expected economic recovery that all Bahamians are hoping for in 2014.

“The country has options that can buy us time with the IMF. We must get serious about those alternatives and realise that we still have options. Time is still on our side. VAT is not the only way to fix our deficit. Our politicians must seize the opportunity, think out of the box and address the country’s spending and revenue problem head on. It cannot be ‘business as usual’ from the Government and its bureaucracy.”

Mr Christen said the Federation plans to ramp up its efforts in the VAT debate in the coming weeks. “The BFR will aim to make sure that the Government fully understands the practical and realistic implications and consequences of what it is suggesting to the people and businesses of the Bahamas, and that the alternatives put forward by the Coalition for Responsible Taxation are not simply ignored, but taken seriously,” he added.

“Business people know how to run businesses in the Bahamas. Politicians, generally, do not. Bahamians should keep that in mind when thinking about VAT. There are many good and serious reasons for the business community being vocal and concerned about the issue, especially in these challenging times.

“Businesses know the difficulties of the Bahamian market and the day-to-day struggles of the average Bahamian as a result. They are our customers, they are our employees and we are all Bahamians. We are all in this together.”

The Bahamas Federation of Retailers was formed on November 12 in order to strengthen and develop the sector. While the pending VAT legislation has created the impetus for its formation, the BFR’s long-term goal is to assist its members in understanding the business issues and opportunities facing retailers in the 21st century Bahamas.