By SANCHESKA BROWN
Tribune Staff Reporter
sbrown@tribunemedia.net
THE final Value Added Tax Bill will be presented to Parliament today with a new list of exemptions, State Minister for Finance Michael Halkitis said yesterday.
Mr Halkitis remained tight-lipped on what exemptions have been eliminated, but did say the list “was significantly reduced with the biggest category being food.”
It was previously announced that most basic food items will be exempt from VAT, including baby food, fresh fruit, fresh vegetables, fresh meat (chicken, beef, pork, mutton), seafood, bread, rice, grits, flour, oatmeal, sugar and vegetable oil.
Mr Halkitis told The Tribune food items that will no longer be exempt will have their duty reduced.
In April, New Zealand VAT tax expert Don Brash suggested that the government should have “virtually no exemptions”.
VAT exemptions are sometimes made for certain items and services in order to alleviate the burden that the “regressive” tax may have on the poor.
However, the New Zealand tax consultants said the government should seek other ways of helping the poor. In New Zealand he said the government makes direct payments to low income families through tax credits.
“If you have a large number of exemptions your rate has to be higher. With a smaller number of exemptions the rate will be lower. We found that the one rate, no exemptions framework worked extremely well,” said Mr Brash.
Mr Brash also suggested that the government begin a VAT education programme at least 12 months before the implementation date, which for the Bahamas is expected to be January 1, 2015.
Last week, John Rolle, the Ministry of Finance’s Financial Secretary, told Tribune Business that the Ministry of Finance is aiming to start a renewed VAT education campaign this month, but is still waiting for Cabinet to approve the revised Bill and regulations.
He said that VAT preparation/readiness efforts were being delayed by the wait for “final directions” from the government. “That you will see very shortly,” Mr Rolle replied when asked when the government would re-start its campaign to educate the private sector and Bahamian public on the finer details of the 7.5 per cent tax.
“That is something we are agreed to begin to deliver this month,” the Financial Secretary added. “I can say that the government is currently reviewing the draft of the legislation and that sets the tone for a well-informed education campaign.
“We will await the final directions from the government. We anticipate getting our directions very soon, and we’ll be prepared to act once we get those. We have mapped out a plan that will take us through January and beyond. There will be a lot of action there.”
Comments
Tarzan 10 years, 4 months ago
New Zealand maintains a large export economy and for that reason a VAT regime actually makes some sense.
The Bahamas exports practically nothing.
VAT is an expensive, highly complex, accountancy demanding, round about way to impose a consumption tax, that makes no sense in our tourism based economy.
VAT will prove ham fisted and highly regressive. It will be a disaster for the working poor, and a haven for cheating among the sophisticated pirates as our government has demonstrated repeatedly it cannot administer fairly even the most direct and easily collected taxes.
Implementation of a VAT regime in the Bahamas will prove a serial disaster. A perfect PLP program.
proudloudandfnm 10 years, 4 months ago
Ishmael still working for the government? Still getting paid with my money? Lady P was appointed GG after4 14 years of not paying taxes. Leslie owes BEC how much now?
Ya'll better build a new jail cause I aint paying VAT....
B_I_D___ 10 years, 4 months ago
So New Zealand says the way they assist the poor is through 'tax credits'...there in lies the problem...we have no income tax...people down at that line of property probably own homes that fall UNDER the RPT threshold, so they pay little to no RPT...there is no easy or effective way to issue a 'tax credit' because the tax our dear New Zealanders deal with is not there. Again, we are one of the ONLY countries in the world that is going to a complex VAT tax BEFORE having a solid income tax structure in place.
sheeprunner12 10 years, 4 months ago
Why dont we compare ourselves with countries at our level??????? Not First World countries like New Zealand !!!!!!!!!!! Its one thing to be ambitious but another thing to be delusional...... SIGH
Islandgirl 10 years, 4 months ago
Seriously now, is there no way around this foolishness? How about the government try to collect all outstanding real property taxes? Investigate how all these politicians got rich so quickly and confiscate what you know they didn't get cleanly? And go back for that, way back in time cause God only knows how some of these people got to be millionaires. Confiscate all funds and assets from known and convicted drug dealers, including the wealth hidden in their lover's, family and friends names? What about stop paying double pension, bringing people out of retirement and paying them exorbitant consultancy fees, cease with wasting out national insurance funds by buying your friends derelict buildings with our money? What about making use of existent government space like the entire first floor of the deGregory building in Freeport rather than renting out of a sitting Minister's brother's building (after moving from another government building at NIB) or buying one that is settled in water whenever it rains, like the one that the gaming board in Freeport was placed in? When are you going to put country above self? We are hurting, Mr. Prime Minister! Get your act together and be fiscally responsible and lead! Why must we suffer to support the greed of a few? You always talk about your legacy. What do you think this VAT crap will do to that?
jlcandu 10 years, 4 months ago
Islandgirl,
Christie's legacy will be a broke, economically stagnant country with our tourism product in the dumper and most of the population either resorting back to a subsistence farming economy or reliant on the government for food, housing, etc.
The only jobs left will be the Mom & Pop shops and the government until it finally can't borrow any more money to pay public service salaries.
Thanks all to the stupid and greedy policies of the PM and his band of idiots. I hope the PM is ready for that!!
Well_mudda_take_sic 10 years, 4 months ago
The U.S. would never introduce such a highly regressive, unfair and costly to administer form of tax like VAT. Christie and his band of bandito cronies have sucked so heavily on the nipple of our Public Treasury that they now feel compelled to kowtow to whatever the IMF recommends even if it means economic suicide for all but the wealthiest of Bahamians and the annihilation of the PLP forever. What a tragedy!
digimagination 10 years, 4 months ago
Introducing VAT is not too different from giving a child a motorcycle before it even knows how to properly ride an ordinary bicycle... think about it.
B_I_D___ 10 years, 4 months ago
Yeap...VAT is a LAST resort after all the other tax models have been exhausted...on top of that the Freedom of Information Act needs to be in place well before that as well.
ohdrap4 10 years, 4 months ago
i listened to the 1pm news other than some bromides concerning vat it was dominated by the referendumm red herring they mae sure to bring it on the first day so vat does not make headlines tomorrow
Bunni 10 years, 4 months ago
This will not end well!.
asiseeit 10 years, 4 months ago
OK you want to charge me VAT, then you better put some of these stealing set behind bars. You people have no idea how upset you are making people. As Eddie Minnis said, "you better straiten up and fly right!". You people are putting me in the poor house and if you think I am going to just take it, think again!
asiseeit 10 years, 4 months ago
Let me also ask you this. What will I get for paying VAT? A safe environment? Reliable services (Electric, communications, water)? Good roads? A clean environment? A country I can be PROUD of? Good Honest ethical governance? Me thinks NOT! So what am I paying for, what I ask you?
B_I_D___ 10 years, 4 months ago
nope...just a bigger cookie jar...and MAYBE some beefed up social services to help those that go belly up.
sheeprunner12 10 years, 4 months ago
VAT in The Bahamas is a JOKE......................... income tax is the way to go. 30% for millionnaires, 20% for over $250,000 and 10% over $50,000, 5% over $20,000. No tax under $20,000 personal income. And collect the taxes that are on the book. Get rid of customs duty. Set up a three year tax amnesty regime for deliquents and for God's sake no more political free-bees................ then maybe ten years down the road we may begin to see some results.
CANDACESCOTT 10 years, 3 months ago
lol you will never see that
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