By NATARIO McKENZIE
Tribune Business Reporter
THE Government should implement an “across the board” Value-Added Tax (VAT) rate of 10 per cent, a leading small business consultant suggesting the tax be implemented via a six-month pilot programme beginning in January 2015.
Mark Turnquest, principal of Mark A. Turnquest Consulting, called on the Government to “take a good look” at the New Zealand VAT model and implement the tax in January 2015, following the year-end payment of Business Licence fees.
“Seeing as how we have never had a tax of this nature before, it’s difficult to assess the positives and negatives of what one rate across the board will do,” Mr Turnquest said.
“What I urge the Government to do is take a good look at what New Zealand’s VAT model is and at least try that beginning next year, maybe in January after the Business Licence period. I have no problem with an across-the-board rate.”
A ‘one rate, no exemptions’ Value-Added Tax (VAT) framework has worked ‘extremely well’ in New Zealand, tax experts from that country recently said, noting that such a move would broaden the tax base and minimise compliance costs.
Mr Turnquest also suggested a six-month pilot VAT implementation programme. “I would recommend a pilot programme,” he added. “It has to be a pilot programme, say for six months, so that all kinks could be addressed.
“ We have to start somewhere. We need to have at least eight months, so after we have prepared for our Business Licence, in January we could move forward.”
Mr Turnquest said he would encourage all small and medium-sized businesses to register for VAT to “get a feel” for the regulations and requirements.
“Once they grow beyond the $100,000 threshold it would be a very easy transition. I would advise all businesses to seek advice from a consultant or accountant to explain how VAT will affect their business from an accounting and operations perspective. All businesses should be educated on how to account for VAT,” said Mr Turnquest.