The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

THE Government remains “confident” that it will hit its July 1 target date for Value-Added Tax (VAT) implementation, a Cabinet Minister yesterday disclosing that the draft law and regulations for the new tax should be released by end-September.

Michael Halkitis, minister of state for finance, was not able to give an exact date for when VAT’s public consultation would begin, but he said the process would be very thorough.

And he confirmed that the Government was leaning towards increasing the registration threshold, above which businesses must register to pay VAT, from the $50,000 stipulated in the ‘White Paper’ to around $100,000 in annual turnover.

When asked if officials believed that nine months was sufficient time to ready Bahamians for VAT, Mr Halkitis said he was confident it would not be an issue.

“We are well advanced and there is a lot of work to be done in the next 10 months, but we are confident that we will be able to meet our implementation dead line,” the Minister added.

“We are in the final stages of the preparation of the legislation. Having said that, when it is released for public consultation and we get feedback from the public, there might be instances with additional tweaking because of the feedback that we get. But that’s going to be, I can say, by early next month. You should see a real ramping up of the public education. And a goal of ours is to have it released around the end of the month.”

Addressing the concerns of key players in the business community, who believe that VAT may squeeze small businesses, Mr Halkitis told reporters it was not the Government’s intention to over-tax the private sector.

He said the Government was taking into considerations how it could assist small and medium-sized businesses with VAT preparation.

“The business community understands that the Government needs to do something about the public finances. I think by and large everybody understands that the Government needs to broaden its tax base,” Mr Halkitis said.

“When year after year you are spending more to run the country than you are taking in, that is clearly an unsustainable position. Where you are just borrowing money to do things like pay salaries and just pay expenses, even before you build the first road. So clearly that is unsustainable.

“We are proposing a registration threshold that exempts businesses under a certain size, so that very small businesses don’t have to wory about making a huge investment in technology, among other things.”