The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

THE movement of any Value Added Tax (VAT) legislation could be delayed as the government awaits a final report on alternative tax measures from Bahamian business owners.  

Sources close to the Christie administration’s VAT implementation team said that the government was advised that the legislation required a three-month window before the new tax can be brought on stream.

Given this new delay, if the government were to forge ahead with VAT, the implementation would be delayed to October or November this year.

Yesterday, Gowen Bowe, PricewaterhouseCoopers (PwC) Bahamas partner and co-chair of the Bahamas Chamber of Commerce’s tax coalition, confirmed that his group was expected to complete a quantitative analysis of several different tax alternatives in the coming weeks.

Their report is expected to be presented to the government in mid-May, Mr Bowe said.  

It is the direct result of Prime Minister Perry Christie’s constant declaration over the last few months that the government would be willing to consider suggestions from business owners if their options were viable enough to not only reform the taxation system, but spark fiscal growth in the country.

“The Prime Minister had communicated to us that the government would wait for our findings and the report is near completion,” Mr Bowe said. “We have gathered a lot of economic data that will be fed into a model to be used, and hopefully we get the raw results by Friday. Among the alternatives would be the payroll tax, VAT at different rates and compliance rate increases.

“So the report not only explores what the impact of VAT would be, but which one of several other taxation systems would be the lesser of the evils. So right now we have had conversations with New Zealand consultants and the Ministry of Finance. By Friday we will have the raw data.”

In addition, Mr Bowe insisted that in no way would the results of the final report alter VAT legislation. However, he said the report would cement which tax system the Coalition would support.

Speaking to The Tribune last night, State Finance Minister Michael Halkitis said he could not comment on whether the VAT implementation date would be delayed despite New Zealand VAT experts John Shewan’s declaration that a July 1, 2014 implementation would be “difficult” to meet.

As it stands, Mr Halkitis said the government is continuing with its public education initiatives in addition to the training of Customs and Finance personnel.