The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government plans to have the legislation required to implement a Value Added Tax (VAT) system in place before January 2014, a Cabinet Minister yesterday saying the draft law might be ready as early as next week.

Michael Halkitis, minister of state for finance, said: “We expect to have the draft legislation hopefully by next week. Then we will have to go through the process of considering it. Our timetable is to have it laid in Parliament before we break before summer. Our plan is to do the debate in the fall and have it in place before January of next year.”

The Government has produced a ‘White Paper on tax reform’ outlining its plans to implement VAT.

Mr Halkitis said the Government has already met with various key private sector groups, including The Bahamas Hotel & Tourism Association (BHTA), the Bahamas Light Industries Developmemnt Council (Manufacturers Association) and the Bahamas Institute of Chartered Accountants (BICA).

“We have already began the consultation with the professional and business groups, and we are getting some feedback,” said Mr Halkitis.

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

The Government plans to eliminate the 10 per cent hotel occupancy tax rate, replacing it with VAT at the same rate. A 10 per cent VAT rate will also be applied to all hotel food and beverage sales.

Addressing thee Government’s Mortgage Relief Plan once again, Mr Halkitis rejected the suggestion that it had merely been an election ploy.

“The plan has been characterised in some quarters as a failure,” he added.

“Unfortunately we were not as successful with the programme so far. I’m happy to say we have had some approvals trickle in, though not as many as we would like.

“We would go back and see where we could improve. The ultimate objective is to make people stay in their homes.

“I reject those arguments that this was an election ploy. This was a genuine effort. Other issues have surfaced, including the matter of income verification and also the widespread issue of excessive consumer debt that has really been a millstone around the neck of a lot of Bahamians.”