The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The VAT Education Task Force and government officials will meet today to “get up to speed on both sides of the coin”, and deal with merchant concerns and consumer complaints that have arisen in the first post-implementation days.

Edison Sumner, the Task Force’s co-chair, said its education efforts to-date had managed to “take away a lot of the fear of VAT’, but “growing pains” were inevitable in the early stages.

And, while the Task Force is gearing up for a major consumer education push during early 2015, Mr Sumner conceded that “absolutely not” enough work had been done to prepare the private sector for its next big VAT test - the filing of tax returns, and submission of payment, to the Government.

“Coming in on the first day, we expect to have a lot of concerns, because this is a first effort for everybody,” Mr Sumner told Tribune Business.

He added that today’s meeting between the Education Task Force, and officials from the Ministry of Finance and its VAT Unit, would discuss the concerns and “many of the complaints merchants have expressed” during the new tax regime’s first four days in existence.

“We’re going to sit with them on Monday and get up to speed on both sides of the coin,” Mr Sumner said, “so they know what we’re hearing on the ground, and we get up to speed with all the changes they have to make.

“We’re going to work hand in glove with them to make sure this gets done properly.”

Mr Sumner, who is also the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said the Task Force would also assess whether the VAT Rules and Guidance Notes were “lining up” with the tax’s regulations.

On the consumer side, he told Tribune Business: “We’ve all seen, as early as today [Friday], where several companies who are registered are charging VAT, but they did not have their registration certificate in a conspicuous place in their store.

“There’ll be these kinds of issues to deal with. We’ve seen, in one or two cases, where whatever price is stated didn’t correspond to the price on the register, even though the price on the shelf stated it was VAT inclusive.”

Tribune Business also found that, as late as Friday, January 2, at least some petroleum retailers were not charging VAT on gasoline sold at the pump. The attendant at a Rubis station was bemused when this newspaper asked if the pump price included VAT.

Petroleum retailers were, though, charging VAT on items sold in-store, following New Year’s Day confusion when some believed the industry had been given a deferral on levying the new tax.

This was because of fears that VAT would conflict with the Price Control Act and regulations, with the new tax pushing gasoline prices above the set price control limits.

The Government on Friday announced that price control regulations were being amended to allow VAT to be accommodated in the margins of price-regulated companies.

“We want to ensure companies registered are compliant and aware, and know all the details as it relates to the rules and regulations,” Mr Sumner told Tribune Business.

“There were quite a lot of concerns relating to those Rules that we want to address in the meeting with the Ministry of Finance and the VAT Unit.”

He added: “We’re very much at the beginning. Coming to this position was more the preparatory stage. Now we’re at the beginning, really the opening of this, so it’s now to guide the business community and consumers through the process.”

More education, though, seems essential. The Ministry of Finance said on Friday that as of New Year’s Day, some 4,930 companies had completed VAT registration and been issued with their Taxpayer Identification Number (TIN) certificate.

With this number set to exceed 5,000 in the coming days, driven by applications from voluntary registrants, more than 400 other applications remain unprocessed despite VAT Department follow up.

“It is mainly because these applicants have neither produced Business License documentation nor availed themselves of the fast-track procedures that have been offered,” a Ministry of Finance spokesperson said.

Mandatory registrants among this number could be exposed to fines under the VAT Act.

Mr Sumner acknowledged there was much more information for the Education Task Force to get into the public domain, with the issue of filing VAT returns “next at the top” of the list.

Apart from having the necessary systems in place to interface with the Ministry of Finance and VAT Unit, Bahamian companies will also have to meet more stringent bookkeeping and recordkeeping requirements.

“This is where it becomes very detailed, very intricate,” Mr Sumner told Tribune Business. “We want to be sure everyone knows how to file, and follow the rules.”