By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
MICHAEL Halkitis, State Minister of Finance, says it is not fair to conclude that Value Added Tax (VAT) is a bad fit for the Bahamian economy despite its reported negative impact on neighbouring Caribbean countries.
Speaking to reporters yesterday, Mr Halkitis said those opposed to the implementation of VAT on July 1 must take into consideration the factors which might influence a specific country.
He was responding to concerns that the Bahamas is set to face the same plight as Barbados’ economy which has continued to struggle since introducing VAT in 1997.
Mr Halkitis said: “We are very different from Barbados. Barbados is an economy that has personal income tax, it has corporate income tax and it has VAT. As you know they have been going through some issues. Right now they are retrenching about 3,500 public servants. The general consensus is that a lack of control of spending over the years has put them in a position where they have had to take fairly drastic measures to bring their financial situation back in order.
“I don’t think it’s an issue where you can just look at a country and say OK well they have VAT and their economy is not performing. If you look at each of those economies for example the Barbados economy was tremendously impacted by the addition of taxes on long haul flights. Barbados gets most of its tourists from the United Kingdom. When the UK government put those taxes on those long airline flights that impacted them tremendously. When you add into that the size of their civil service and some other international impacts of their economy. (It is) the same thing with other economies in the southern Caribbean where their agricultural economy has fallen apart.
“I see some (persons against) VAT referencing other countries and saying well that particular country has VAT and they are in trouble. Well it’s not only that, it’s a whole mix of issues that they are grappling.”
And despite cries from business owners and consumers that officials should consider other options to raise its revenue base, Mr Halkitis said the government will continue to work towards their implementation schedule.
“We are listening continuously to feed back and we are moving a head toward our deadline. As Prime Minister (Perry Christie) has said he is listening to alternatives (and) he is listening to concerns. As of today we are moving towards the implementation schedule, but at the same time we are listening to alternative suggestions, taking them into account and seeing how they would impact the overall economy.”
To date, Mr Halkitis said he could not say for sure when VAT legislation would be brought to Parliament. But he added that officials expect to do so sometime before the end of February.
Comments
proudloudandfnm 10 years, 9 months ago
Hmm a mix of issues they are grappling with. What? Like we don't have a mix of issues too? Property taxes not collected, tens of millions wasted every year on our corporations, electricity beyond reason expensive, customs duty not collected properly.
Yeah we got our issues too Michael....
VAT is the wrong answer. Why don't ya'll start listening to the people man?
We are already losing a huge portion of MSC's business in Freeport due to the raise in customs fess. What do you think is going to happen when VAT comes online?
B_I_D___ 10 years, 9 months ago
So VAT has failed in MANY Caribbean countries that have similar characteristics to ours...we are the ONLY country moving to VAT that does not already have some other tax structure like income tax already in place. He is now saying the legislation may not be out until the end of February and we are meant to have everything in place to go live 4 months later? They are off their rocker. By all means, look at the other countries that are a close fit to our economy and make up, and compare...LEARN from those around you that VAT does NOT work effectively...oh, but wait...we should just ignore all these other examples around us cause the rest of them are full of crap and don't know how to run a government properly...as if we do...our government structure is an absolute archaic joke, and they are wanting to leapfrog into VAT which requires heavy reporting, tracking, accountability and the technology to back it. Bull crap. We couldn't be ready for a VAT set up for YEARS...let alone 4 months. Idiots.
realfreethinker 10 years, 9 months ago
He said they are struggling with a bloated civil service ,over spending, I hope he aint saying we dont have those problems. that is precisely why we are in trouble. B-I-D REAL IDIOTS
nationbuilder 10 years, 9 months ago
the guy is a moron
The_Oracle 10 years, 9 months ago
"The general consensus is that a lack of control of spending over the years has put them in a position where they have had to take fairly drastic measures to bring their financial situation back in order".
Yep, pretty much sums up the Bahamas! If anything, we are worse off as we started from a much better position, and frittered away our fortunes!
Ministry of finance officials despite the shifting political winds have one thing in mind: Get more money, and keep the political monkey off their backs!
HolandObserver 10 years, 9 months ago
Delusional!
sheeprunner12 10 years, 9 months ago
This PLP Cabinet is a flam.
Perry is the Pied Piper
Blind leading the Blind
What a heap of sh&*#TTTTTTTTTT
LOOOOOOOOOOOOOOOOOOOOOOOOOOSERS!!!!!!!!!!!!!!!!!!!!
Honestman 10 years, 9 months ago
I don't believe this administration has any intention of considering alternatives to VAT. It will push on regardless of public and business concerns because looking at alternatives would require it to engage in an intellectual exercise that it is ill equipped to carry out. Implementing VAT is the easy solution for government because it can claim that the FNM started the process and other Caribbean Countries have gone down that road. Government is just going to "close it eyes and hope for the best". I honestly believe that if VAT is introduced at 15% the economy will suffer hugely and the tax revenue gain government is expecting will not materialize for a number of years. In the meantime, I can't see anything other than many small businesses closing and unemployment rising. Does anyone see it differently?
ThisIsOurs 10 years, 9 months ago
Agree. They will never get what they've projected. People will stop shopping here. Businesses will dry up. Employes will get laid off. Crime will rise. Investors will flee. The businesses that do collect won't report so they can at least cover their rising expenses against reduced sales. Service based business will drop like flies, who will be be able to afford the luxuries?
This rise coloured glasses administration needs to go. My God even Moody's, MOODY's said their plan is drastic!
242orgetslu 10 years, 9 months ago
F**K Halkitis an the whole government. Mr Halkitis live around the corner from me in coral lakes, dis man aint into helping no one. He does leave his house in the morning when it still dark so people dont catch him home. His plp office is right across from Bacardi Road park, ask the basketball players or the kids playing on the park when was the last time they had light on the park. They gat about 5 or 6 light poles what supposed to light up the basketball court, the swings and slides for the kids and the other dark ares of the park, especially near the bushes. Instead Mr Halkitis gat a light on one light pole accorss the road from the park that lights up Carmichael road instead of the park. STUPID! He cant even fix simple things like that but he wan talk bout factors which might influence a specific country, NIGGA! we gat dem same factors an you aint doin nuttin to help shit!
Tarzan 10 years, 9 months ago
I suggest dumping the Flamingo, and substituting the Ostrich as the new national bird.
Exploiting_Bahamas 10 years, 9 months ago
Before decisions are made research is conducted. Research includes examining similar situations. Admittedly, Barbados does have several tax structures that are not present in the Bahamas. However, we cannot simply disregard the effects VAT implementation has had on Barbados. There is undoubtedly benefits of having VAT the main one being increased income. Cost benefit analysis should show the Government that the supposed 'benefits' do not outweigh the 'cons' of this tax. One of the main features of any tax is that it should be clear to the general public. The Government, themselves, are not prepared for implementing VAT. The Bahamian people similarly are not ready. Re-examination needs to be done of the logistics of VAT before going 'full speed ahead' with this tax.
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