The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government’s proposed Value Added Tax (VAT) is expected to generate an entirely new revenue stream for private sector accountants, the Bahamas Institute of Chartered Accountants (BICA) president yesterday telling Tribune Business the reforms may create jobs for Bahamian tax specialists.

Speaking with Tribune Business at a BICA seminar on VAT yesterday, Jasmine Davis said: “This definitely opens up a whole new revenue stream for accountants, and a speciality really, because here in the Bahamas we haven’t had anything outside of Customs duties and tariffs to be considered taxes. We may see the need for tax accountants now in this jurisdiction, which hasn’t happened before, and we look at that as an opportunity.”

Philip Galanis, managing partner of HLB Galanis, shared similar sentiments, telling Tribune Business: “I think just as the Business Licence back in the early 1990s created a lot of business for accountants, I think VAT, because it’s going to be a regulated situation, will create more work for accountants.

“I think that it’s going to be important for accountants to want to understand what’s going on. I think it’s also important for accountants to inform Government about what makes the most sense, what things will work and what won’t work.”

Mr Galanis added: “For example, most businesses operate on an accrual basis of accounting, which means that they reflect revenue when the revenue cycle is completed. In other words, when I’m finished doing work for a client, I bill a client, and I hope to get the fees within a reasonable period of time.

“Is the Government going to require persons who are conducting business on an actual basis to pay the cash upfront, even though the customer has not paid you? I think that’s very important, because it doesn’t seem fair to me that I should pay 15 per cent on a $100,000 engagement when I haven’t gotten paid ,and that’s going to be a detail that has to be worked out. It’s very commonplace in the Bahamas for business not to pay you for a substantial period of time. Those are the kinds of details that need to be worked out.”

Lawrence Lewis, partner at Deloitte & Touche (Bahamas) and chairman of the BICA taxation committee, said: “I suspect that in some cases it will bring new business to accountants. Some may have been doing things in-house before and not thought they were of sufficient size to need a professional accountant.

“I’m sure there will be some that now say that they want to make sure they get it right, and come to an accounting firm or professional accountant for that.

“I think it will also broaden the existing relationships accounts have, where we may have been doing audits or some other kind of work. They may now say they want to fully understand VAT, how they implement it and be sure they are complying.”