The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Super Value’s owner says he is “more satisfied” heading into Value-Added Tax (VAT) implementation following last week’s meeting between the Government and private sector, but suggested there was too little time to repair the “disunity”.

Rupert Roberts, the supermarket chain’s president, said previous VAT communications that he and other retailers branded as ‘misleading’ had undermined efforts to create a “united” Bahamas going into the new tax regime.

However, he acknowledged that the Ministry of Finance’s agreement, at the December 23 meeting with the private sector, to “improve communications” with consumers had buoyed his mood with just hours left before VAT implementation.

And Mr Roberts said he and other businesses were getting the impression that the Government’s VAT Unit would adopt the promised ‘light touch’ regulatory approach in the tax’s early days, and work with the private sector until it operated smoothly.

“I’m more satisfied going in after Gowon [Bowe, Tax Coalition chairman] and myself had a good lunch, and from talking to other friends we’re getting a feeling they’ll leave us alone,” Mr Roberts told Tribune Business in a recent interview.

“It seems to me, from what I understand before and what I understand now, and all around, is to go ahead and do VAT the way we think we should. They’ll [the VAT Unit] come around, and if you’re not doing it right, they’ll correct you.

“It seems they’re going to be reasonable, and they will teach us and we will teach them,” he added. “They’ll accept help, and everyone will do what they ought to do and we’ll work it out in the end.”

Mr Roberts and Philip Beneby, the Retail Grocers Association’s president, previously slammed the Government for ‘misleading’ Bahamians into thinking food prices would go down as a result of Customs duty cuts, and switching from the Cost, Insurance Freight (CIF) method to Freight on Board (FOB), for their calculation.

These moves were designed to mitigate VAT’s impact. But Messrs Roberts and Beneby told Tribune Business that the combined impact of the tariff cuts, and calculation method switch, would lower food prices by a mere 0.5 per cent - not enough to compensate for 7.5 per cent VAT.

They said then: “In the industry, 20 per cent of items represent 80 per cent of the volume. The majority of the items....., their tweaking does not amount to anything in bringing down the cost of food.

“They also removed the duty on freight. Well, 60 per cent of food store sales are bread basket, which is already duty free. On the other, 40 per cent of items - from 10 per cent duty to 30 per cent duty - it only amounts to minimum deductions of duty, and when you get up to 45 per cent duty there is a savings of 2.67 per cent, which are very slow items.”

Mr Roberts told Tribune Business he understood that the VAT Unit blamed the communications issues on another Ministry of Finance department at the December 23 meeting.

Describing his understanding of the meeting as “a hell raising session”, the Super Value owner said it might not be easy to undo the wrong expectations already created in the minds of Bahamian consumers when it came to food prices.

Suggesting it had caused “a great misconception for them [the Government] with the public, the merchants and VAT”, Mr Roberts told Tribune Business: “We needed to go into VAT united. That was the goal.

“Then these Ministry of Finance communications started. It really was a mistake and disappointment. There’s no time to clear up anything now.”

Mr Roberts added that his hope that VAT implementation could be pushed back by one day to January 2 had not been accepted by the Ministry of Finance.