The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Visiting duty-free shoppers will be refunded 85 per cent of their Value-Added Tax (VAT) payments from July 1 this year, when the Government’s private sector contractor takes over management of the process.

John Rolle, the acting VAT comptroller, said visitors would suffer a 5 percentage point decline to their current 90 per cent refunds when Global Blue, a Swiss company specialising in duty-free shopping tax refunds, takes over management of the scheme.

Addressing a small group of retailers at SuperClubs Breezes yesterday, Mr Rolle said the Government was looking to implement the scheme on July 1, adding that the refund system was a fully electronic process.

He explained that tourists would receive an 85 per cent refund, as opposed to the current 90 per cent, to their credit cards within five working days.

The 15 per cent balance, Mr Rolle said, would go to the refund agent, Global Blue, in effect as a commission. No refunds will be issued to Bahamian dollar-denominated credit cards.

“Right now, it’s 90 per cent, but it’s a manual system operating at the level of each store, so effectively  with the new system it will be 85 per cent of the VAT that goes directly back to the visitor,” Mr Rolle said.

“The remainder goes into the operations of the refund system. What is very important with the transition is that we broaden the participation without any limit. Any store that wants to participate, that is providing sales to tourists, can enroll in the system.”

Mr Rolle explained that Global Blue will provide participating retailers with the necessary software and training. “They will all get the equipment to capture the information of the shoppers,” he added.

“The shoppers, when they purchase from those establishments, will get the refund. What we have now is only for the limited number of retailers who qualified for the over-the-counter refund. That is not universal on Bay Street, and that is not universal on all of the products that they provide.”

Mr Rolle told Tribune Business: “The system will allow all of the stores that have business with the tourists, if they decide, to be able to sign up and be a part of it. The technology will be provided to them. You just plug it in and everything is connected over the existing Internet infrastructure. It is secure.”

It has not yet been determined how visitors who do not have credit cards will be facilitated with respect to the VAT refund scheme.

Mr Rolle said that while any visitor purchase of goods valued at $25 or more would qualify for a VAT refund, a decision has not yet been made on the threshold for automatic scrutiny by the Customs Department.

“There is no question as to the threshold for when the visitor qualifies for a refund. Whenever the tourist  spends at least $25 in the store on goods that they can take out of the country, that purchase qualifies for a VAT refund. The other decision that we have to make is from the point of view of Customs monitoring of the system,” said Mr Rolle.

“What we are saying is that for transactions below a certain value, but above $25, there won’t be the automatic scrutiny of those, so the visitors would enjoy the convenience of having those transactions approved automatically for refunds. That threshold would be set at a level where we would estimate that more than 95 per cent of visitor transactions will not get a second level of scrutiny.

“If your set the threshold at a few hundred dollars, that is more than the average spending for cruise passengers. You have automatically captured the average expenditure per passenger.”