The Tribune

THE Baker Tilly accounting firm’s global head yesterday described Value-Added Tax as “the most complex of taxes”, mandating that its Bahamian affiliate become “an expert” on the issue.

Geoff Barnes, Baker Tilly International’s president and chief executive, said it was vital that Bahamian companies be “very clear” on cash flow management and financing in a VAT environment, especially those businesses that sell a mix of taxable and “exempt” goods.

Speaking to Tribune Business during a visit to Nassau to meet with the network’s Baker Tilly Gomez affiliate, the London-based Mr Barnes also described the costs associated with collecting VAT in the UK as “enormous”.

“VAT historically has been the most complex of taxes,” Mr Barnes told this newspaper, noting that it involved far more than simply paying 15 per cent on an invoice.

“Our tax partners believe VAT is the most complex of taxes, with the exception of inheritance tax.”

The Baker Tilly chief’s comments will likely add to private sector concerns that VAT is not the best tax reform solution for the Bahamas, given its complexities and associated administrative costs.

The Coalition for Responsible Taxation has repeatedly argued that the Bahamas should opt for a payroll tax, citing as advantages its relative simplicity, the likelihood it will be better understood, and the ease of collecting it through the National Insurance Board’s (NIB) existing infrastructure.

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