By NEIL HARTNELL
Tribune Business Editor
The long-awaited Small Business Development Bill will be passed into law early in the New Year, a well-known consultant said yesterday, with the organisation key to its on-ground implementation established by mid-2014.
Mark A. Turnquest, who is intimately involved with the research process intended to underpin the Small and Medium-Sized Enterprises Bill, told Tribune Business he had urged the Ministry of Finance to forge ahead with the initiative and not let it become distracted by, or confused with, Value-Added Tax (VAT).
The Mark A. Turnquest Consulting head added that the Small and Medium Sized Development Agency (SMEDA), which will play the central role in giving effect to the legislation, would be created by June/July 2014.
And he yesterday became one of the few private sector representatives to openly support the Government’s proposed VAT, describing fiscal reform and the need for more revenues as “a necessary evil”.
Arguing that the business community, and wider Bahamian society, could “not have their cake and eat it”, Mr Turnquest said the only aspect of VAT that he opposed was the planned July 1, 2014, implementation deadline. He argued that it should be pushed back by between six months to a year.
“The SME Act is in the hands of the Government, and they’re doing some analysis,” said Mr Turnquest, who is working with EPS Consultants head, Don Demeritte, to develop research findings will underpin the legislation.
“We will be finished with the SME research for the entire Bahamas by December 31, and when we are finished that, we will start working on SMEDA.”
Mr Turnquest said the research findings would help to “structure” the legislation for maximum effect, and added that its passage through Parliament would happen before SMEDA - the key enabling agency - was established.
The small business consultant is set to visit Abaco on Tuesday to meet with entrepreneurs and sector representatives there as part of the process, with data collection set to conclude by year-end.
Mr Turnquest said analysis of the findings would take place in January, with a final report concluded by the following month.
Outlining the current legislative timetable, Mr Turnquest said: “It will be legislated by next year February, and SMEDA will be set up by July.”
The legislative reform/SMEDA package is intended to transform the institutional support structure for Bahamian small businesses and entrepreneurs, providing them with the technical support necessary to develop into sustainable, larger ventures.
It will consolidate the various government agencies involved in this area, and is intended to support increased Bahamian economic ownership and diversification.
Rather than act as a lending agency or guarantor, as many government bodies have in the past, SMEDA will be a “one-stop shop” for all technical and business support services, getting entrepreneurs and their businesses into a state where they would be able to access financing from other entities.
Both the Bill and SMEDA have patiently been awaited for several years by the small business community, the initiative having begun under the former Ingraham administration.
The current government had spoken about bringing the legislation to Parliament this year, but it now looks as if it will fall into 2014.
Mr Turnquest, meanwhile, told Tribune Business he had warned the Ministry of Finance not to allow the Bill to become confused with VAT.
“The two will be combined based on perception,” he said. “I told the Ministry of Finance not to let VAT get in the way of SMEDA because they are separate.
“We will be finalising the agency and VAT next year, but they ain’t similar; they’re just part of what is happening.”
Pledging that SMEDA would “restore” the Bahamian small business sector, Mr Turnquest added: “Everything is moving ahead. I’m personally involved in it, so I can attest that it is happening. It ain’t how we’d like it to be, but we have some progress.”
He said SMEDA would have a unit specifically created to educate small businesses and entrepreneurs on “how to deal with VAT”.
While most, if not all, SMEDA clients would start life below the mandatory $100,000 VAT registration threshold, the intention was to prepare them to deal with the tax in the expectation they would grow.
Becoming one of the few to back the planned VAT implementation, Mr Turnquest said: “VAT or some form of taxation is a necessary evil. The country is broke and we need that.
“Some type of tax has to be levied. Which one is up to the Government, and we can’t have our cake and eat it. We have to have some type of deficit reduction, and this is the way to go.
“I’m pro-VAT, but am not an advocate for it being introduced so soon. Maybe take another six months to a year. I just don’t like the timetable,” he added.
“But it has to be done. There’s too much misinformation out there about the impact of VAT to the overall health of the economy, and that’s what the Government needs to work on.”