The Tribune

With just 22 per cent of hotels indicating they had a full understanding of Value-Added Tax (VAT), the Bahamas Hotel and Tourism Association (BHTA) believes the delayed implementation provides an ideal opportunity to minimise costs and revenue losses.

Stuart Bowe, the BHTA’s president, said that pushing back the implementation of VAT, or alternative tax reforms, from July 1 would especially help its small and medium-sized resort and other business members.

“BHTA welcomes the delay in implementing a Value Added Tax, which will allow adequate time for the public and private sectors to do the planning, training and operational conversions necessary for the transition,” said Mr Bowe.

“We have reached out to the Ministry of Finance in recent months and expressed our desire to work together towards the tourism industry’s VAT implementation.

“This will be particularly important for our Family Island and small and medium-sized businesses. Failure to plan will place an added financial and operational burden on businesses, and could prevent the Government from realising its anticipated revenue.”

Concerns

His concerns were backed up by a survey BHTA conducted earlier this year showing that only 22 per cent of the respondents indicated they had a full understanding of how a VAT works.

Beyond their desire to understand new legislation, accompanying regulations and reporting requirements, businesses cited the need for understanding the necessary changes to accounting and inventory systems, installing new point-of-sales systems, revising contracts and menus, and training staff in advance of VAT’s effective implementation date.

Businesses also expressed concerns about transition matters affecting purchasing, inventory management and existing business contracts.

“Not being prepared for the transition could place a much higher financial burden on businesses. We are moving quickly to prevent an ineffective conversion process,” said Mr Bowe.

“It is essential that we mobilise our forces with the Ministry of Finance and other private sector organisations to put in place a collaborative readiness plan,” said Mr Bowe.

“We were impressed by the approach undertaken by New Zealand, where the private sector was well-engaged in the readiness process, helping to write the plan and facilitating its delivery.

“We look forward to a similar engagement with the Ministry.”