The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Major Bay Street merchants yesterday said had few complaints over the duty-free shopping scheme implemented last August, although one retailer said attracting high-quality visitors willing to spend in the downtown area remains a “serious challenge”.

The Government introduced the tax free shopping scheme for visiting tourists last August  to ensure the Bahamas remains a competitive shopping jurisdiction, following the implementation of Value-Added Tax (VAT).

The duty-free shopping system was provided by Global Blue, a Swiss company, in partnership with the VAT and Customs Departments. More than 60 per cent of eligible Bahamian merchants have reportedly signed up since the scheme was launched six months ago.

Kelda McDonald, accounts manager at Diamonds International, told Tribune Business: “For us it’s been working pretty well. I don’t know about other persons but we haven’t had any problems. Their staff have been very supportive; they check in on a regular basis.”

Tourists making VAT-free purchases are required to present travel or other documentation providing proof of pending departure from the Bahamas to approved retailers. The tax refund process allows retailers to sell a wide range of products to tourists while relying on the electronic system to measure the VAT refund.

The purchases are recorded in standard format by retailers, and then monitored electronically by the Customs Department.

One Bay Street merchant, who wished not to be identified, told Tribune Business: “I can tell you I think generally it’s been working well. The reason it’s working OK is the word ‘Global Blue’. They work globally.

“It’s just like we bought a Chevy, and the Chevy works type of thing. They brought in their system. I think it works OK. There were great delays in getting it implemented, but it seems to me once they finally got it initiated which, for our business, was last August, I think it works fine. They just brought in a proven system. We get reports for them and we pay the Government once a month.”

The retailer added: “The issue is, however, that we are still  very challenged in getting quality customers downtown, customers who have money to spend.

“We only operate downtown, unlike a John Bull, which has stores on Atlantis, where they are going to see tremendous volume.

“We’re still struggling with the quality of the customer downtown. If you walk downtown you see tons of people walking around, but who are they? Cruise ship people who’ve got $10 in their pocket.”

Last November, then-financial secretary, John Rolle, while addressing a Bahamas Institute of Chartered Accountants  (BICA) seminar, said that businesses participating in the Government’s duty-free shopping scheme were generating close to $10 million a month in tax-exempt sales to tourists.

Global Blue’s system uses a standard electronic platform for the tax refund process, so retailers can sell a wide range of products to tourists, net of VAT.

Michael Halkitis, minister of state for finance, said in a statement: “Following the introduction of VAT, we needed to ensure that the Bahamas continued to be seen as a competitive shopping destination.

“I’m pleased to say that the new system has made tax free shopping easy and simple for retailers and the Customs Department, and therefore more available and accessible for tourists.”

Jorge Casal, Global Blue’s senior vice-president for new markets and public affairs, said: “The electronic system implemented by Global Blue provides a simple way for Globe Shoppers to make tax free purchases, an efficient process in-store for merchants, and a secure process for Customs authorities.

“The system has performed extremely well since its launch, and Global Blue will be doubling its current investment in marketing and promotion over the coming year to further support the development of the scheme.”