By DANA SMITH
Tribune Staff Reporter
dsmith@tribunemedia.net
ONE local businessman said he would rather close down his auto-shop than spend money complying with the proposed Value Added Tax system.
The businessman, who wanted to remain anonymous, was responding to a Nassau Institute commissioned report which found that VAT may force the Bahamian economy into further decline, causing the cost of doing business to rise through book-keeping and other expenses.
He called the government’s plan “ridiculous” and said it would invite corruption as businesses will attempt to escape the heavier obligations.
“The VAT, I don’t understand that at all. They need to have some kind of town hall meeting,” he said.
“I would just stop what I’m doing. I’m on the verge of doing that now with the kind of profit I’m getting, and the VAT hasn’t even come yet.
“With all these taxes that they’re imposing on the small businessman, they are encouraging corruption because people will find any way to get away with not paying all these taxes.”
Renee Moree, assistant manager at Cartwright’s Garage, echoed these sentiments – explaining that while they expect to be faced with compliance costs, no one at the company has any idea what VAT really means.
“No one has been here to say anything,” she said. “If they are going to implement this in July, God help us. No one in the Ministry of Finance has returned our calls to answer any questions.
“We don’t what’s going on and it’s really scary for all the business people I’ve talked to. The business community is up in arms.
“They promised to have town hall meetings, they promised to come around to different business houses - we haven’t seen anybody at all.”
A local contractor, who also asked to remain anonymous, said he’s unsure if his construction company will continue to get business once VAT comes into effect as he will have to raise prices for his customers.
He noted that VAT is not good for “service-oriented businesses” in particular and the Bahamas economy as a whole.
“It’s going to hurt me a whole lot,” he said. “When it comes into effect, I’m going to have to pass another 15 per cent onto my clients. I already mark up 15 per cent, so now it will be 30.”
Asked about the Nassau Institute’s report, the contractor adjusted his prediction.
“I was just going to mentioned that,” he said. “I will have to mark up 35 per cent – five per cent for accounting and book-keeping. Instead of me charging 15 per cent it’s going to be 35 per cent. I’m not sure if I will get any work. It’s going to affect us, as contractors, here in the Bahamas.”
For more information about the report, or to get a copy, call 324-2035.
Comments
TalRussell 10 years, 7 months ago
The businessman,who wanted to remain anonymous means they are not really "committed" to closing their business down over VAT.
My5Cents 10 years, 7 months ago
Lol you want the Ministry of Finance to explain what VAT is when they still trying to figure out. This legislation was coming from early summer.
The_Oracle 10 years, 7 months ago
No Tal, it equates to the spinelessness in the Business community, and the standard practice of staying quiet and making money, in the belief that nothing will ever change. 5cents, this has been coming for a decade! The deadline just got dropped on Perry, as both PLP and FNM did not want to be the one holding the bag/implementing.
banker 10 years, 7 months ago
This is going to be like watching a train wreck. I notice that the Central Bank (reported in the other fine daily paper) is saying that money is leaving the country at alarming rates. The Central Bank person said that it was because of Basel III compliance or other such nonsense. But no, according to the Central Bank, it ain't a flight of capital.
I am here to tell you that it is a flight of capital. Money is leaving the country at an alarming rate. Businessmen are transferring their money offshore to mitigate the risk of holding only Bahamian dollars when the devaluation comes. Many businessmen are implementing schemes to garner hard currency for the coming hard times.
Something has gotta give, and in my opinion, the first sign of the crack will be a decrease in government revenue. Then the Central Bank will close down all foreign currency outflows except for those with a bulletproof reason for paying out-of-country invoices. This will be followed by an increase in crime, and a further drop in the tourist industry.
As it is now, the financial services industry is not growing and in many cases it is receding. There are a few more like Julian Brown and Owen Bethel who are dipping into client money, and the roosters will come home to roost.
It een gern be pretty in the old Bahamaland.
TalRussell 10 years, 7 months ago
If readers are to believe this story, why would the businessman have a need to remain anonymous when he is saying that IF PM Christie goes ahead with VAT, he has already decided that there will NOT be a tomorrow for his business? Since he does plan on being around, why can't he speak he mind the reporter ... today! Not like he has to have any concerns about his business going out of business? You think he's a red shirts merchant?
Keiyo12 10 years, 7 months ago
Sigh.... as i sit back and anticipate the devaluing of our Bahamian Dollar (BSD). Only God can help our country.
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