The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Bahamian economy is sputtering along and needs to to see “dynamic growth” as the effects of Value-Added Tax (VAT) are being felt by businesses and consumers throughout the country, according to Dionisio D’Aguilar, the Superwash president.

“I think that the effects of VAT are beginning to be felt in the economy. The economy is really sputtering along,” Mr D’Aguilar told The Tribune yesterday. He commended the government for taking what he called the “bold step” in introducing VAT but noted that other initiatives were necessary to bring about real economic growth.

“As VAT has begun to settle and hit people’s pocket books, I think there are many businesses that would say they have seen their sales go down in the double digits. VAT was a bold step - and it was necessary - but you really have to change the way our economy works and get some dynamic growth because sticking with the status quo and beating the old model to death isn’t working. The government was running such horrendous deficits that they had to do something. They could have done two things; they could have cut spending, which would have thrown more people out of work, or raise taxes and bring about slower growth,” said Mr D’Aguilar.

“The government elected to raise taxes and bring about slower growth. It was absolutely necessary to introduce VAT because they had to do something. One could have argued that the could have improved their collection methodology. By introducing VAT it has caused a lot more compliance but VAT has to be coupled with a loosing of the economy, incentives for people invest. The government needs to create the kind of environment that will bring about the needed growth.”