The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The revised 7.5 per cent Value-Added Tax (VAT) proposal is “not such a bad deal” if there is no alternative to it being the Government’s tax of choice, a well-known businessman has argued.

Dionisio D’Aguilar, Superwash’s president, said that while certain businesses and industries, such as the automotive sector, would still be unhappy and for good reason, the Christie administration had largely given the private sector what it was seeking.

“I think the Government has basically fulfilled the demands of most of the private sector,” Mr D’Aguilar told Tribune Business. “By and large the private sector should be happy with what has been proposed.

“There are obviously some sectors that are not happy, the automotive importers, and the Chamber of Commerce is trying to seek some relief for them, as they have to pay VAT upon an already-high Excise Tax rate.

“But I think by and large the Government did what we asked them to do..... If we’ve got to have a new tax, and it’s got to be VAT, it’s not such a bad deal. They’re not going to get it absolutely right first time, and will have to tweak it here and there.”

Mr D’Aguilar’s remarks may cause some controversy in sectors such as insurance and private healthcare, which have found themselves switched from the ‘exempt’ to the ‘VAT-able’ category of businesses, plus the auto industry and others that are already burdened by high taxes and price-conscious consumers.

Yet when it comes to VAT’s basic structure, there is little doubt that the Government has moved closer to the position advocated by the private sector and a bevy of consultants, including its own advisers and those from New Zealand.

“You’re never going to get everything you want, but they did reduce the rate from 15 per cent to 7.5 per cent, and removed the exemptions to make it simpler,” Mr D’Aguilar said.

“For those who run a business day to day, you can’t have too many rates for so many different people. It’s just too complicated. The Government was responsive in keeping exemptions to a minimum. I’m sure they were under a whole heap of pressure.”

Meanwhile, Robert Myers, the Tax Coalition’s co-chair, said he had received indirect feedback that the Government was unhappy about the language being used in the private sector’s advertising campaign, which emphasises that reform must go beyond taxes and embrace all fiscal indicators.

“It’s a little bit of push and pull, which is perfectly healthy,” Mr Myers told Tribune Business. “It’s not going to be a love fest. They want specific things, we want specific things, and we have to work together to address that.

“We’ve agreed on tax, and now we need to get agreement on fiscal reform. We need to get moving while pushing fiscal reform.

“We need tax reform, we need fiscal reform, we need energy reform, we need some movement on monetary policy and some movement in Immigration. “

Mr Myers added that the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) and its Tax Coalition subsidiary would get seats on both the VAT Advisory Committee and Education and Implementation Committee that will be created to oversee VAT’s implementation.