The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A senior tax specialist yesterday said numerous issues related to Value-Added Tax (VAT) administration still need clarification, a problem typical with the introduction of any new tax system.

Jane Adams, director of tax services at KPMG Bahamas, who was a presenter at the Bahamas Institute of Chartered Accountants (BICA) VAT seminar, told Tribune Business: “My experience, coming from another VAT country, is this is typical. 

“There are always bumps along the road. We went fairly smooth. We do have areas to still get some clarity around, but that is fairly normal with any new tax regime.”

She added: “We’re still trying to nail down things like gratuities; how we handle VAT on group insurance for our employees; some of the documentation for reporting, where it is not always easy to get a VAT invoice; and dealing with non-residents because there are some special rules to zero-rate non-residents. We need to develop some clarity there.”

Ms Adams said that while the VAT implementation process has been relatively smooth thus far, the filing process is an important part of the tax system. 

“The filing is very important. It’s important that people understand that any tax system relies on compliance. A VAT is an efficient form of taxation.  It is going to be important that people understand the requirements to comply,” said Ms Adams.

“The proof is in the pudding. Eventually, people are going to be audited, and when the auditor shows up you want that audit to go smoothly.

“Having good accounting records that show from cradle to grave where the numbers come from, where they flow to on the return so that they explain themselves, it keeps the audit simple and hopefully reduces exposure to any penalties or charges.”