The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Value-Added Tax (VAT) Education Task Force co-chair yesterday said it would take at least six months post-implementation to “iron out all the bugs” with the new tax, adding: “It’s not a quick fix.”

Edison Sumner told Tribune Business that the Task Force had “done everything we can” in the time available to ready the private sector for VAT, but acknowledged that much work remained to be done.

Mr Sumner, who is also the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, said the Task Force had been able to “quiet some of the fears” surrounding VAT.

He suggested the fact VAT registration had exceeded the Government’s target by 30 per cent, in terms of number of firms, was at least partly due to the Task Force’s efforts.

Mr Sumner disclosed that the Task Force, which he co-chairs with immediate past Bahamas Institute of Chartered Accountants (BICA) president, Jasmine Davis, was now preparing to switch its focus from the private sector with the January launch of a “very aggressive” consumer education campaign.

And, while urging both companies and consumers to ensure they were “not taken advantage” of post-VAT implementation, Mr Sumner also pleaded with mandatory registrant ‘hold-outs’ to reverse course and comply with the law.

With less than two weeks left before the Bahamas implements arguably the biggest tax reform in its history, Mr Sumner agreed that the transition period - and next 12 days - would be “very interesting”.

Implying that work on VAT implementation would not stop come January 1, he told Tribune Business: “I imagine it’s going to take six months to iron itself out, in terms of getting implementation done, ironing out all the bugs in the system, working with the business community to get as easy a transition as possible.

“It’s not going to be a quick fix, it’s not a two-three month shot, and that’s why the Task Force has been charged over a nine-month period to provide education and training.

“I think it’s going to take at least that time to settle in properly, and businesses and consumers get a level of confidence in the system, so that it operates smoothly.”

The Government’s nine-month mandate to the Task Force, which takes its work through to June 2015, is a recognition of the fact that VAT-related education will not come to an immediate halt come New Year’s Day.

Mr Sumner acknowledged that the Task Force still had outstanding objectives, telling Tribune Business: “There’s still a lot of work to do....

“We’ve done everything we can, given the time we had coming into the holidays, paying a lot of attention to getting the business community ready, and giving them education and information they needed.”

The Task Force had worked with BICA, the Chamber Institute and Bahamas Hotel and Tourism Association (BHTA) on VAT educational workshops, which Mr Sumner said were at least partly responsible for a relatively successful registration process.

“The fact that registration was oversubscribed, we attribute a lot of that to the Task Force getting out to the business community and educating them on the need to register,” Mr Sumner said.

“We were able to quiet some of the fears, got some of the questions answered, and provided a lot of clarity. We feel the Task Force has done a pretty good job in terms of getting the information out there.”

He added that those businesses who had delayed preparing for VAT would “be in a very frustrating place” as they rushed to completion amid the busy Christmas sales season.

Mr Sumner said the Task Force’s focus will switch come the New Year, explaining: “We’re going to be starting off in earnest with a very aggressive consumer campaign in January.”

Calling on consumers to protect themselves from exploitation by unscrupulous businesses, he said Bahamians could refuse to pay VAT on good/services sold by firms that failed to properly display their registration certificate, and report them to the appropriate authorities.

And Mr Sumner said the Task Force would also be working with a “reinvigorated” Consumer Protection Agency (CPA), calling on both Bahamians and businesses to “make sure they are not being taken advantage of by a system that’s new to us”.

Yet he admitted that the Task Force was “very concerned”, after Michael Halkitis, minister of state for finance, said the VAT Unit knew that some businesses with an annual turnover exceeding $100,000, and who should have registered, have yet to do so with the deadline having passed.

“We’ve been speaking out very forcefully. All the mandatory registrants should be registered,” Mr Sumner told Tribune Business. “The business community should do the right thing, and comply with the law, not be complicit in breaking it.”

Pointing out that there were numerous avenues through which businesses could make their VAT concerns known, he added: “If there are companies that know they should have registered, and are simply refusing to do because they want to prove a point, we understand that, but it’s not the way to go about it.”

Mr Sumner appealed to companies that should have registered for VAT, but have yet to do so, to “be responsible” and submit their applications rather than expose themselves to substantial fines and other sanctions.