By NATARIO McKENZIE
Tribune Business Reporter
A co-chairman of the Bahamas Chamber of Commerce & Employers’ Confederation’s (BCCEC) ‘Tax Coalition’ says the Government must ensure the right systems are in place to prevent revenue leakage under its proposed Value-Added Tax (VAT), adding: “The one thing we cannot afford is a failure”.
Speaking during a panel discussion at a Bahamas Institute of Chartered Accountants (BICA) seminar, Gowon Bowe, a partner at PricewaterhouseCoopers (PwC) Bahamas, said that the among the concerns expressed by the Coalition was the issue of revenue leakages, noting that the Government was already challenged collecting taxes under the present system.
“We need to be satisfied they have the right systems and policies in place to avoid leakage,” said Mr Bowe.
Another concern expressed to the Government by the Coalition was over likely price increases and inflation.
“Let’s bear in mind that we are coming out of a recession. From a government perspective, it’s equally important that they keep the economy going,” said Mr Bowe.
He added that increased prices could push Bahamian consumers to shop in the US even more. “We are not foreign to shopping in the United States and abroad. If you have a lot more spending taking place outside of the economy because of VAT, then you have a negative impact,” Mr Bowe said.
He added that there was concern over VAT’s impact on the Family Islands. “It’s already more expensive to purchase goods and operate in the Family Islands,” said Mr Bowe.
He warned that an increase in the cost of living on the Family Islands could ultimately result in more individuals moving to an already-crowded New Providence.
Mr Bowe said there was also concern over the frequency of VAT filings and the timing of VAT remittances, as well as how VAT would factor into product warranties.
Speaking to the Coalition’s efforts, he said: “This is not with the hope of deferring indefinitely; it’s simply saying it’s not as straightforward as it may seem. The one thing we cannot afford is a failure.”