The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government yesterday promised to "try and accommodate" Bahamian retailers seeking to access tax breaks for the Back to School season ahead of the August 1 implementation.

Marlon Johnson, pictured, the Ministry of Finance's acting financial secretary, told Tribune Business that the launch of customs duty exemptions for footwear and clothing imports had been pushed back a month to ensure there were no problems with the "application process" licensed retailers must follow to access these benefits.

"The plan was to bring them into effect on August 1," Mr Johnson confirmed. "It gives us time to get the application process sorted out. It's always been the plan to give us time to get the application process up so that we understand what we're doing."

Only retailers and merchants possessing a business license allowing them to sell clothes and shoes will have access to the duty exemptions, which are intended to make them more price competitive with online and south Florida rivals by eliminating the 25 per cent import tariff.

However, the Bahamas Chamber of Commerce has warned that the August 1 start date will do little for retailers looking to exploit the exemptions in time for Back to School, the second busiest shopping season of the year for many, given that they will have had to import inventory before this date.

Acknowledging this, Mr Johnson said the Government was trying to pull the implementation date forward as much as possible, and added that it would look to meet the needs of Back to School merchants ahead of time.

"We're trying to push it for earlier than that," he told Tribune Business of the August 1 implementation. "As the Chamber indicated, merchants and sellers of footwear and clothing want to take advantage of that.

"We are trying to push that further ahead than August 1, and will try and make accommodations for retailers selling Back to School items. We want to ensure we have a robust system for timely applications. We expect a significant number of applications from day one, so we want to make sure we deal with them appropriately."

Mr Johnson also confirmed that the VAT 'zero rating' for food breadbasket items and medicines will not take effect until August 1 to give retailers and pharmacists time to adjust their information technology (IT) systems.

Edison Sumner, the Bahamas Chamber of Commerce's chief executive, previously told Tribune Business that the date change was critical to enable uniform and footwear suppliers to enjoy the planned customs duty exemptions on footwear and clothing imports prior to the Back-to-School season's start.

"We're now coming upon the summer holidays, and people will be preparing for school even though it is two months away," Mr Sumner told Tribune Business.

"Those merchants in the business of selling school supplies, particularly those selling uniforms, we want to be sure they are in position to take advantage of the Customs reduction in clothing and shoes to bring in supplies entirely duty-free."

The tax waiver, announced by the Deputy Prime Minister in the Budget communication, was initially hailed for helping to preserve Bahamian businesses and jobs in a retail sector that has been hit hard by online and US-based rivals.

"We are providing for the waiver of duty on clothing and shoe imports upon application by importers and retailers of same," K P Turnquest said. "This will be extended to any merchant, large or small, who has a Business License for the sale of clothes or shoes.

"We are, at the same time, putting in place procedures to ensure that the savings are passed on to consumers. This will be a benefit to all Bahamians, but particularly to those who do not have the means to travel abroad to shop for their clothes like others are sometimes able to do."