The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The first-ever Value-Added Tax (VAT) quarterly filings are “the last piece of the puzzle” for the Government in determining whether it will meet annual revenue projections for its new tax, a top official believes.

John Rolle, the acting VAT Comptroller, speaking ahead of yesterday’s quarterly filing deadline, emphasised that it was critical to the success of the Government’s fiscal reform plans that the “revenue materialises” from the new tax.

Implying that the first two monthly VAT returns had met projections, Mr Rolle added that March’s returns/collections would play a key role in the Government’s deliberations over the upcoming May Budget, and help determine if “further tweaking here and there” is necessary.

Declining to give figures, the VAT Comptroller said: “I would say that we have not been disappointed relative to what have been our level of expectation for the collections. The returns have lived up to expectations.

“Once we see the quarterly filers, we will have the last piece of the puzzle in terms of knowing what is likely to happen for the Government, on a reasonable basis, over a tax year.”

This is because March’s filings represent the first time that 5,600 quarterly VAT registrants, businesses with annual turnovers between $400,000 to $5 million, have submitted their tax returns and payments.

Mr Rolle acknowledged that this category accounts for more than 80 per cent of VAT registrants, and “a substantial amount of the revenue”. Their combination with the several hundred monthly filers, companies with annual turnovers exceeding $5 million, means that March’s returns are key to predicting VAT’s future trends and success.

“It’s very critical in terms of being able to deliver on the [fiscal] consolidation plan,” Mr Rolle, who is also the Ministry of Finance’s financial secretary, told Tribune Business.

“We need to see the revenue materialise. I think the opportunity is very much within our reach.”

The March returns also coincide with the Government’s budgeting process reaching its last, intense stages as there are just four weeks (one month) to go before it unveils its plans for the 2015-2016 fiscal year to Parliament.

“The timing is helpful,” Mr Rolle said. “It gives us a basis on which to make recommendations to the Government in terms of its overall fiscal plans, and whether it needs further tweaking here and there.”

The acting VAT Comptroller conceded that it was “all hands on deck” for his team in dealing with the quarterly filers, and answering their queries, disclosing that they had to assist several businesses who had forgotten their passwords for accessing the Government’s electronic filing system.

Mr Rolle’s assessment of the importance of the first-ever VAT quarterly filings was echoed by the private sector.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business it represented “the true barometer” of whether VAT implementation would succeed.

And Edison Sumner, the BCCEC’s chief executive, described the March/first quarter returns as “the true litmus test” of the Government’s electronic filing system and revenue projections.

Mr Sumner, who is also a co-chair of the Government-appointed VAT Education Task Force, said of its work: “We believe we’ve done all we can do in assisting those [quarterly] businesses to file their returns by yesterday.

“We’re very confident in the process, and very positive about the outcome. We’ve been doing a lot of work talking to the business community, talking to those quarterly filers.

“The VAT Unit has a team standing by, ready to provide assistance. We’ve fielded a number of calls from businesses asking how to get into the website, and we’re satisfied that the process is relatively simple.”

Mr Sumner then added: “I don’t think everyone waited until Tuesday to get this done. We were expecting a significant amount of entries to go through on Friday and Monday.

“This month is going to be a huge test of the Government’s system and the kind of revenues the Government projects will come through. I believe the quarterly filing period now is going to be the true litmus test.”