By NEIL HARTNELL
Tribune Business Editor
The Government is unlikely to release the revised Tariff Schedule before the beginning of March, as the private sector gears up to complete its Value-Added Tax (VAT) study “as quickly as humanly possible”.
Robert Myers, the Coalition for Responsible Taxation’s co-chair, yesterday said the proposed dynamic economic modelling would show whether concerns that a 15 per cent VAT rate is too high are correct.
Disclosing that replies to the Coalition’s Request for Proposal (RFP) for an economist were due back in seven to 10 days, Mr Myers said it was seeking “world-class type people, very even keeled” to conduct the study.
Industries that will be a prime focus of the economic impact study, he added, will include construction, the wholesale and retail sectors, tourism and the services economy.
The Coalition’s study is one half of the parallel track process that it has agreed to embark upon with the Government in determining the best option for fiscal and tax reform in the Bahamas.
While the economic model will project the likely impact that a 15 per cent VAT; VAT with a lower rate; and alternatives such as payroll taxes will have on the economy, the Coalition will also be working through VAT-related operational issues with the Government - such as inventory management - in case the proposal remains as is.
“The Tariff Schedule has significant impact over the cost [of VAT], but we’re not going to get that until the beginning of March,” Mr Myers revealed.
“That’s fine, as we have enough to go on, and can put the rates in as we get them. There’s still a lot of unknowns, and that’s part of the economic analysis - what does it potentially mean to inflation, what it might mean to economic growth.”
With just over four-and-a-half months to go before the Government’s proposed July 1 deadline for VAT implementation, Mr Myers indicated that the Coalition knew the clock is already against it in having the economic modelling completed in time.
He pledged that the project would be completed “as fast as humanly possible”, with the first priorities getting the right economist and the correct data.
“We’ve got a lot to do, and are going to have to really knuckle down and get the work don,” Mr Myers said. “We’ve just got to move as quickly as possible, and both sides are committed to doing that. We’ve just got to get our heads down and plough ahead.”
He added that the Government was being “responsible” in moving ahead with its VAT implementation plans, given that fiscal reform was a necessity and its “commitments” to the likes of the International Monetary Fund (IMF) and credit rating agencies.
“Whether that’s the right thing to do is another matter, but they need to show they’re making progress,” Mr Myers said.
While the Coalition’s economic modelling was unlikely to bear “100 per cent of the weight” when the Government makes its final tax/fiscal reform decision, Mr Myers hoped it would answer which option was the best and whether VAT was the right fit for the Bahamas.