By DANA SMITH
Tribune Staff Reporter
THE government is being irresponsible in seeking to impose Value Added Tax on the public, as the scheme will only cause local businesses to suffer, said businessman and former politician Paul Moss.
Agreeing with the findings of a Nassau Institute commissioned report, which suggests that VAT will contribute to economic decline, Mr Moss said the government’s plan will be hardest on the poor.
He urged the Christie administration to consider an income tax instead.
“We recognise for a very long time, many decades, that the present tax regime that we have is a regressive one that really puts the burden of tax paying on the poor. The implementation of VAT continues that mode,” Mr Moss said.
“It continues to put the burden of tax paying on the poor because that’s all who end up paying it, anyway. The fact is, in no other country in the world has VAT worked without income tax.
“The government has been derelict and in my view, irresponsible in seeking to put this on the Bahamian people without having the discussion or the implementation of supporting tax systems such as income tax that could really help and remediate the situation in the country. And so, I believe that Bahamian businesses will suffer.”
Mr Moss said he finds it “quite strange” the government did not provide provisions in the this past budget to aid businesses in preparing to comply with VAT. Such as, he explained, necessary computer software that will aid in VAT compliance.
He noted many businesses in New Providence – “not to talk about Family Islands” – are even lacking in cash registers and proper record keeping materials.
“It is absolute irresponsibility by the government to at this stage try to do this. If this is what they want to do, they should have a better time-line where to say, ‘we expect to introduce this in two years, three years’ - something like that. Give people the opportunity to ready themselves.
“Even in the budget, give a concession to allow people to have the funds to buy software, computers, et cetera, that would be necessary to really be the tax collector for the government because that is what VAT is saying, they want you to collect taxes for the government.”
More should be done, presently, to educate businesses on VAT and its consequences, Mr Moss said.
“So far, they are not doing it and they call themselves speaking to stakeholders. The stakeholders are the Bahamian people. You can’t go to Rotary, you can’t go to the Chamber of Commerce and believe that you are touching the lives of Bahamians.
“The every day man needs to know what’s going on. Because while you’re speaking to those forums there, it doesn’t mean that they are disseminating the information.”
Calling an implemented VAT system “a bad idea,” Mr Moss said he agrees with the conclusion of a Nassau Institute commissioned report on VAT.
The study’s author, David Godsell said it would cost the Bahamian private sector more than $100 million annually to comply with VAT and would “force the Bahamian economy into further decline.”
The report said: “VAT adoption, rather than restoring the economic foundation of the Bahamas through deficit and debt reduction, would only raise additional economic concerns.”