The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Prime Minister yesterday said the Bahamas “takes full ownership” of its economic competitiveness decline, as he defended the Government’s decision to shrink the Value-Added Tax (VAT) payment ‘window’.

Perry Christie told the House of Assembly that the narrowing of the VAT payment and filing timeframe, from 28 days to 21 days after period end, was designed to bring the Bahamas into line with most other nations.

“They state that, in accelerating the VAT filing period to 21 days after month-end, we fail to appreciate how businesses work. That is untrue,” Mr Christie said.

“In fact, if one takes the time to examine general VAT practice around the world, it will be obvious that a 21-day filing period is not unreasonable.

“Such a filing period is found in Barbados, with 20-day filing periods in effect in the Dominican Republic, Grenada, Dominica and Swaziland. In some cases, 15-day filing periods are mandated; for example in St. Kitts and Nevis, some Brazilian states and in Jamaica, if the cash method is used. Chile imposes a 12-day filing period.”

Whether the 6,000-plus VAT registrants, and the Government’s own systems, are ready for a 21-day filing period after just 18 months of the new tax’s operation is open to question.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, previously told Tribune Business that the key for the private sector was how reforms such as the VAT 21-day payment window would operate in practice.

The VAT amendment is due to take effect from January 1, 2017, and Mr Bowe questioned whether the Government expected to have complete and accurate returns filed in that timeframe, along with the associated paperwork.

“Payment within 21 days should be available because the funds are being collected on behalf of the Government,” the Chamber chairman added.

Distinguishing between paperwork and the submission of payment, Mr Bowe said the 21-day deadline should be for “provisional” VAT payment, with registrants given extra time to adjust the sum once they filed their returns.

“If it’s a situation of having to make provisional payment in 21 days, and final payment in 28 days, it’s a possible solution,” he told Tribune Business.

“We’re [the Chamber] still canvassing the business community. We acknowledge the Government wants to collect its revenue.”

Mr Bowe, though, said most of the 6,000-plus VAT registrants would likely require more than 21 days from period-end to complete all the ‘netting’ and other calculations required to work out the correct sum due to the Government.

Elsewhere, Mr Christie yesterday pledged to focus on “supply side economics” to boost the Bahamas’ weak GDP growth levels and competitiveness.

“The Bahamas is taking full ownership of its rankings in the various competitiveness indices, and as a Government, we have vowed to become a smarter, more competitive jurisdiction,” he said.

“We have committed to enabling business, small and large, to succeed within our markets. We want to promote entrepreneurship and innovation. For this, a strong business culture and a healthy sense of co-operation with the business sector is required.”

Turning to the Bahamas’ flagging ‘ease of doing business’ indicators, Mr Christie said the Government was seeking greater co-ordination between the Ministry of Works and Bahamas Power & Light (BPL) to reduce the time it takes for new businesses to be connected to energy supplies.

Acknowledging the Bahamas’ 183rd ranking, out of 189 nations, for the ‘ease of registering property’, the Prime Minister acknowledged this was largely driven by the challenges attorneys have in ensuring there is ‘good title’, and no encumbrances, liens and mortgage charges on real estate.

The recording of conveyances at the Registry of Records was another issue, and Mr Christie said: “Significant improvements can be made through the use of technology to facilitate full online searches of the registry, reducing the time to do a search from the current one to two months to a few days.

“Improving the technology is only part of the answer, as we also need to improve the service provided by the various government departments. The initiative to strengthen the public service, to create more accountability and improve staff performance, will have long-run benefits as it will remove a number of the bureaucratic hindrances that adversely impact business in the Bahamas.”

Mr Christie said the Bahamas ranked 111th in the world when it came to protecting minority investors, and said the Government was aware of the need to improve the Companies Act and related legislation.

“My government is committed to improving the business environment here in the Bahamas, but we do not seek to do this blindly. We seek to be informed by the experts on the best course of action and the vision and desires of the Bahamian public,” the Prime Minister added.

“It is easy to stand up here and talk about all that is wrong. It is easy to criticise. It is a much harder job to listen to the needs and wants of the people, to listen to the advice of the experts, and to commit the required resources and make the necessary hard institutional changes.

“My government is prepared, no, dedicated to doing this and making the Bahamas the best country in which to do business.”