The Tribune

EDITOR, The Tribune.

The proposed implementation of Value Added Tax (VAT) on July 1, 2014, is not something that the Bahamian public or the Government is ready for.

The deadline is drawing near and the Government has yet to carry out what should have been one of the first steps in the implementation process; properly educating the public and holding training workshops for individuals who will be directly involved with VAT.

Generally, people object to things that they do not understand or what they feel is being forced upon them. VAT is fairly new to the Bahamas and only a few citizens are knowledgeable about this form of taxation, therefore, the objective behaviour that the Government is receiving from its citizens should have been foreseen and taken into consideration.

Many countries have expressed how VAT has negatively affected their country, with a few being our neighbouring Caribbean countries. Adverse affects varied from business closures due to the sudden rise in the cost of living, a decline in the quality of life and the elimination of all luxuries that were once affordable.

The Government should take an economist’s approach and use other countries affected by VAT as models to create assumptions that will help in determining the likely impact of VAT on the economy and the citizens of the Bahamas.

VAT will increase the price of almost every good and service, but our salaries will remain the same. Many citizens find it hard already to meet their obligations. VAT will only increase the burden.

If business owners sympathetically increase the salaries of their employees due to VAT, they would have to find other alternatives to compensate for that salary increase. The only available alternative would be an increase in the prices of goods and services or downsizing. This in addition to VAT would be detrimental to the quality of life for Bahamians.

With the implementation of VAT, devaluation of the Bahamian dollar is also a concern. VAT will result in inflation, which is the overall level of prices in the economy. Usually, inflation is associated with the government printing a larger quantity of the nation’s money. This then can result in a decrease in the dollar value.

VAT proves to be detrimental to economies and citizens who are subjected to this form of taxation; therefore, the government should not implement VAT in the Bahamas but rather find alternative sources of revenue.

CYNDERA PARKER

Nassau,

February 6, 2014.