EDITOR, The Tribune.
The following letter, written by businessman Godfrey Thomas to Prime Minister Perry Christie on February 21, is published below at the urging of several Bahamian businessmen who think that it should be shared with Tribune readers.
Hon Perry G Christie,
Prime Minister & Minister of Finance, Commonwealth of The Bahamas.
Dear Mr Prime Minister,
I am taking the liberty of writing this letter on the present issue of Value Added Tax which now confronts the government, the people and the business operators of The Bahamas.
Approximately six months ago, in a meeting which you requested with the wholesalers, I voiced my strong opinion on government’s ability to be successful in the implementation of a highly complex credit system of revenue collection.
Now, six months later, and just returning from Barbados (a country very badly damaged by VAT), I am even more concerned as a front line businessman. I have 40 years’ of experience in The Bahamian market, having over 170 Bahamian employees of all levels, and 40+ shareholders who hold me accountable for their livelihood, my mind will not rest until I express my gut feelings as to the onerous consequences if your government persists in its quest to enforce this regressive form of taxation on the Bahamian marketplace.
In my many and varied positions, from bank teller in Harbour Island, to commercial fishing in South Andros, to selling fish at Potters Cay Dock, as a wholesale salesman, manager of Nassau Agencies Ltd, and President of Island Site Development (a prime contractor), never in my 47 years of earning a living in this beautiful country have I experienced more concern for the future of our island nation. I want you to know that I wholeheartedly support the coalition against VAT.
There is a silver lining to this very dark cloud of VAT in that it has united the ethical and good businessmen of The Bahamas to push for change and assist your Government to increase the revenue collection in a better and far more effective way. It is obvious as the ocean is deep, that government has failed to effectively administer even the most basic revenue collections systems. There is no way of improving that record of failure with a credit system like VAT, which requires forensic accounting plus compliancy.
You and your government alone have one golden short lived opportunity to save for future generations, this damaged leaky ship of state on which we all depend for our livelihoods.
VAT will erode your stable tax revenue of organised and paying businesses to a sub-culture of non-paying non-contributing businesses analogous of the webshop culture we have now, eating at the very fabric of our economic stability. This tax will fall heaviest on the already struggling poor and will without question intensify the storm of crime in which we now live. I must further add, that the implementation of VAT will only benefit the government and people of the Dominican Republic, as it will enhance their tourism package as being one of the last non-VAT tourist destinations.
I humbly ask you and your Ministers to join with us in the coalition which wants to help restore a stable and viable future for all Bahamians and the future of those to come.
GODFREY THOMAS
Nassau,
February 12, 2014.
cc: Mr Michael Halkitis, Minister of State for Finance, Mr Kaalis Rolle, Minister of State for Investment Mr Ryan Pinder, Minister of Financial Services.
Comments
B_I_D___ 10 years, 1 month ago
Well said and to the point. There will be smaller businesses out there that are on that threshold of who qualifies for VAT and who doesn't that simply do not have the technology in place to deal with this. Heck, even the established businesses with full blown accounting systems are going to be hard pressed to make the adjustments necessary in the time frame they have given us. We have software programmers that we need to consult and modifications to our systems that need to be done and tested, we have not seen the first shred of paperwork on how the reporting is going to be handled...what reports need to be generated, how those reports are going to be handed in...or transmitted electronically, how exactly the interface on the banking side will take place...all this takes TIME and they have not giving us the first piece of hard requirements to work from. I can guarantee that there are companies out there that have a gross income over the required threshold that have NO systems in place to handle this...how are they going to be held accountable and how is this going to work...is the government going to force them into buying all sorts of expensive software to make it work? Far too complicated and almost impossible to fully enforce and monitor.
dahasamo 10 years, 1 month ago
Did Mr. Thomas get a response from the PM or someone in his office or even from the surrogates, i.e.Wilson or McWeeney.
ohdrap4 10 years, 1 month ago
Of course not. The way to handle dissenters is not to entertain them/
I can almost hear it said: "I will not entertain that".
If the press calls, tell them they are hysteric.
TheMadHatter 10 years, 1 month ago
I hate to keep posting this - but just want to be sure it is heard by somebody "up there". VAT should be implemented ON July 1st at a rate of 1/10 of a percent (0.1%) instead of 15%. That will place the focus on PROCEDURES instead of money. The article is right, the procedures are not in place.
Make the fine for non-compliance (ie. those businesses that earn enough to be required to register) be ONLY $1000 / month. ALL will have to pay that fine at the end of July and probably August - but that will help to keep the forward momentum on getting the system properly in place.
Once everything is setup - THEN consideration can be given to how to increase the VAT rate in conjunction with a decrease in customs duties. Again, that should be done in stages. In Sept vat can go to 5% and duties can drop 10% points (45 to 35, 35 to 25, 25 to 15 only). In nov Vat up to 10% and duties another 10% point drop.
VAT should not go any higher than 10%, and luxury items like Escalades etc should remain high just as they are now.
Exempt food items however should NOT be exempt. VAT should be charged on ALL food items, even so-called bread basket items and baby food. There are too many people in this country that do not pay gasoline tax (cause they don't have a car) - don't pay much BEC and only live off of bread-basket items. They need to pay to be a part of society or get the h*** out.
TheMadHatter
Thinker 10 years, 1 month ago
No way!!! Once they implement VAT, what do you think is going to happen? They will raise taxes even more! This is much about a growth of a government that is not working for the people but rather for the sake of government and government control.
proudloudandfnm 10 years, 1 month ago
I have a better idea Madhatter. Clean up current taxes. Stop the wasteful spending. Find a way to get bahamasair and zns off our books forever. Establish term limits for all MPs and Cabinet Ministers. Raise the salaries of MP's and cabinet ministers so we can get some actual talent in our government instead of these message pushers. Put impeachment procedures on the books so we can hold our MP's and cabinet minister's feet to the fire.
Then sit back and watch the country change drastically...
Ishmael Lightbourn proved one thing for certain. We do not have an issue with revenue. We have an issue with spending and collecting. Period...
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