The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A corporate income tax may be a simpler Value-Added Tax (VAT) alternative than the personal variety, an accountant said yesterday.

Pedro Delaney, a chartered accountant and industry representative on the Bahamas Financial Services Board (BFSB), said the Government could consider a flat rate corporate income tax as a VAT alternative.

“I think that the Government has invited the public to present alternatives to VAT,” Mr Delaney said, following a meeting of the Rotary Club of West Nassau.

“I’m not sure, from what I have seen or read, that many alternatives have been put forward. Persons have spoken about income taxes, but in a very superficial way. Something like income taxes would require a substantial amount of research and study.”

“My personal view is that the administration of income tax, at least on a personal level for individuals, would be a fairly expensive way to go,” he added.

“However, when you consider income tax, there are personal income taxes as well as corporate. Corporate income taxes may be an easier measure to implement if we’re going to address income taxes. The Government may, in considering that, want to consider simply a flat rate for corporations.”

Mr Delaney further said: “I think that from all of the discussions that have been going on, there is a definite need to increase government revenues.

“VAT has been identified as a means to assist; albeit VAT would not be the ideal solution to bridge the entire gap, but I think it will help.

“The July 1 deadline is very ambitious, and I think that the release of the draft legislation is now allowing persons to dig into the details, see how it would work and determine whether or not they would be prepared come July 1. I think that 15 per cent is the common percentage that has been used in most countries with respect to the introduction of VAT. For the hotel sector it is being proposed at 10 per cent.”

While the government is moving forward with its VAT campaign, Prime Minister Perry Christie has indicated he is open to a viable alternative, amid growing private sector concerns.

The Government is proposing to implement VAT on July 1, 2014, at a rate of 15 per cent, with the hotel sector to be subject to a 10 per cent rate.