The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

WITH just over two months until value added tax is officially introduced in the Bahamas, National Insurance Board Director Rowena Bethel said the organisation has identified an internal committee to ensure that the organisation is ready once the tax is implemented.

Speaking after the graduation of 28 new NIB inspectors on Monday, Mrs Bethel said two members of NIB’s executive management team have already been identified as co-chairs of the committee.

“VAT is going to impact us obviously from the perspective that the services or products that we purchase that are subject to VAT, we’re going to have to absorb that cost. In one or two areas as well, NIB would be regarded as a VAT-able institution and would have to register,” she said.

“As regards the extent to which VAT imposes additional obligations on citizens, I think one can look at this in many different ways. The government is obliged to provide different public services that have to be financed, and consequently it’s incumbent on the government to look at the best way to obtain that financing, otherwise there will be complaints from the public that they are not getting what they expect.

After two days of sometimes bitter debate, the VAT Bill was passed in the House of Assembly on August 20 by a vote of 22-8. Prior to its passing, concerns were raised about the tax with criticism coming from opposition members as well as PLP backbenchers.

Marco City MP Greg Moss, the only PLP member to vote against the Bill, said it doesn’t benefit the country “to take rich white people and replace them with rich black people” and that enacting the bill would drive people “further into poverty”.

He said if the government passed “the FNM’s brainchild” the PLP would lose the next election. He said he would not support VAT and that the government should consider implementing an alternative tax reform, such as income tax.

Mrs Bethel’s comments on Monday supported Mr Moss’ call for the implementation of an income tax.

She said while NIB has been able to meet this year’s budget for contribution collections, not having an income tax regime “puts an additional burden on the National Insurance scheme to collect what is due to the fund”.

“In many other countries, the national insurance payment is actually submitted as part of an income tax submission by employers and employees,” Mrs Bethel said.

“The burden comes onto the National Insurance Board here because we don’t have that, and it means that we actually have to put in place the type of framework that would allow us to get compliance to the levels that we require and also deal with enforcement when we have non-compliance.

“That is not as easy as it sounds. Certainly we have mechanisms where persons can either enter into instalment arrangements to meet their arrears, but that has to be balanced against meeting their current contributions at the same time. We do have cases where persons, in an attempt to meet arrears, begin to fall behind on current contributions.

“We are looking at other ways to deal with it,” she said.

The government has said it will expand its social safety net programme by as much as $30m to offset any negative effect VAT will have on the poor.