The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner yesterday conceded that merchants had “lost the battle” over Value-Added Tax (VAT) ‘inclusive’ pricing, with the supermarket chain having printed over one million new price tags to meet the Government’s demands.

Rupert Roberts told Tribune Business that with the February 28 deadline for completing the transition just four days away, retailers had run out of time to challenge VAT ‘inclusive’ pricing and had little choice but to obey the law.

“What’s happened, at least with us, is that time has taken care of it, as we have to tag everything inclusive by the end of the month,” he told this newspaper.

“I believe in law and order, and we have to obey the law. I’ve had to print over one million tags. When we ran out of time, I just printed over one million tags. At this point, we’ve lost the battle. It’s sad, and I think it’s the wrong thing.”

Mr Roberts estimated that the software required to print the VAT ‘inclusive’ price tags, and the “thousands of man hours” involved in re-pricing store and warehouse inventory, had cost Super Value around $100,000.

He added that the supermarket chain was “on the home stretch” with the VAT pricing transition, with its stores “three-quarters of the way” along and set to be completed within the next seven days.

“We won’t have any problems,” Mr Roberts added. “We’ve been tagging for 10 days.”

He disclosed that Super Value’s pricing transition had been delayed for two months, after the VAT unit rejected its initial ‘inclusive’ tags in October/November 2014.

Mr Roberts said the VAT Unit had objected to the inclusion of the words ‘VAT inclusive’ in it, and only gained its approval for the revised tags in mid-January.

The Super Value owner was speaking after Tribune Business revealed on Monday that the private sector was awaiting the Government’s formal response to its arguments in favour of VAT exclusive pricing, amid last-ditch hopes this can be made “optional”.

Gowon Bowe, the Coalition for Responsible Taxation’s chairman, said the business community was pushing for the New Zealand model, which mandated neither VAT ‘exclusive’ or ‘inclusive’ pricing.

New Zealand only requires that merchants ensure end-consumers have a complete understanding of pricing, and whether it includes VAT or not, thus permitting an “optional” model that the private sector hopes the Government will agree at the ‘11th hour’.

Mr Bowe said the VAT pricing issue went to the heart of the retail economy’s competitiveness, given that uncompetitive ‘inclusive’ price comparisons would likely drive more Bahamians and tourists to shop in the US as opposed to locally.

Mr Roberts yesterday reiterated that he still supported VAT ‘exclusive’ pricing as the preferred option, given that Bahamian consumers would “see we’re selling at the same old prices and have not increased them”.

Consumers would then have clearly seen that the increase was due to the 7.5 per cent VAT levy, and Mr Roberts confirmed: “That’s what we wanted, but circumstances dictated that the Ministry of Finance said it wanted ‘inclusive’. I don’t think it helps the consumer any.

“What we were fighting for all the way was to get a VAT that we could work with and live with. Up until, now with the exception of ‘inclusive’ pricing, I feel they gave the merchants what they wanted.”

Several observers have suggested that the Government has opted for VAT ‘inclusive’ pricing because it will camouflage, or disguise, the 7.5 per cent levy, thus ensuring consumers instead blame Bahamian merchants for any price increases.

Mr Roberts said the publicity surrounding recent Price Control Commission inspections had given the misleading impression that merchants had been raising prices, in some cases illegally and in contravention of the Price Control Act.

“You can’t paint everybody with the same brush,” because 99.9 per cent of the merchants abide by the law, and will never knowingly break it,” he told Tribune Business.

Mr Roberts said many consumers had mistakenly believed VAT would not be added to ‘breadbasket’ item prices during the tax’s early days, a consequence of what he described as misleading advertising by the Government.

With VAT implementation now behind the Bahamas, Mr Roberts said the most imminent issue now facing the private sector was the March 2 deadline for monthly filers to submit their returns.

He explained that Super Value’s concern here was to retain its ‘period accounting’ methods, as the period ends did not necessarily coincide with month ends.

“If they don’t allow us to do that, it will tear our accounting to pieces,” Mr Roberts told Tribune Business, “and cost us. It would just destroy us.

“I hope they’re going to allow us to do the old bookkeeping and just charge the 7.5 per cent. To make any other change would devastate us.

“Our success is due to our efficient, timely bookkeeping. It’s a volume business, and we have to know what we’re doing. If we don’t know what we’re doing on a timely basis, we lose control, and if that [accounting] slows us down, we lose control.”

Still, Mr Roberts said VAT implementation had been far smoother than he expected.

“I expected it to be a lot worse. I anticipated confusion that we didn’t have,” he told Tribune Business. “I’m very pleased, and the Government must be pleased.

“Now we have VAT, let’s hope we have 7.5 per cent for a long time. Let’s hope they put that [VAT revenues] on the national debt. That’s why it was so readily accepted by the public.”