By NATARIO McKENZIE
Tribune Business Reporter
Food retailers have echoed calls for the Government to revert to Value-Added Tax (VAT) ‘exclusive pricing’, the Retail Grocers Association’s president yesterday agreeing that this would provide greater accountability and transparency.
Philip Beneby told Tribune Business: “The Government had decided to have the VAT prices inclusive. Some of them are still saying it would have been better if the prices were exclusive of VAT, and it would have been easier for them for the change over. We will wait and see if the Government finally settles on inclusive pricing.”
The Government’s original VAT legislation, released in November 2013, had opted for ‘exclusive pricing’ where the product price and amount of due tax were shown separately on the label sticker. It, howeve, reversed this position in the legislation that passed through the House of Assembly.
“There are some retailers who no doubt would like to see that issue be addressed. They are saying it would have been better if the prices were exclusive. It would give better and more transparency, so that customers can see exactly what their VAT total was. It would make for greater accountability if it was price exclusive rather than inclusive,” said Mr Beneby.
He added: “The reason why they were agitating at first for the inclusive pricing was because of the number of exempt items in the store.
“When the Government initially came out with the list of exempt items you would have had to indicate on your register tape what was VAT-able and what was not VAT-able.
“That was why we were saying that for the most part the VAT should be inclusive, and you would not have had to differentiate between exempt and non-exempt. After they lowered the VAT rate and cancelled all the exempt items and said everything is now VAT-able, it should be exclusive.”
Kendrick Christie, president of the Association of Fraud Examiners’ (ACFE) Bahamas chapter, told Tribune Business in a recent interview that showing product prices without the VAT included would let local consumers know their exact landed cost post-January 1.
This, he suggested, would provide Bahamians with some safeguards against any “unscrupulous businesses” looking to exploit VAT for ‘price gouging’ purposes.
Mr Christie warned that “lumping everything in together”, as the Government’s VAT legislation and regulations now propose to do via ‘inclusive pricing’, could ‘camouflage’ unethical practices and allow the business to blame it on the new tax.
Mr Christie, a Grant Thornton (Bahamas) partner, instead called for store shelf prices not to include VAT. He recommended that retailers and other providers of physical goods instead display prominent signage informing consumers that products were subject to a 7.5 per cent levy, and also indicate which were ‘exempt’ and attracted no tax.
The well-known accountant called for the due VAT to instead be broken out, as a separate line item, on the customer’s receipt or invoice when they went to the cash till/payment point.
Besides consumers, Mr Christie said switching back to VAT ‘exclusive pricing’ would also benefit the private sector, saving retailers the time and expense associated with re-pricing thousands of goods in their Point of Sale (PoS) system.
He also expressed concern about the potential harm VAT ‘inclusive pricing’ could do to the tourism/restaurant industry’s competitiveness, warning that it could further fuel visitor perceptions that this nation was an overly-expensive destination.