The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

MARCO City member of parliament Greg Moss said he will participate in an initiative to repeal value added tax (VAT) at the earliest opportunity possible as he accused the government of “double taxing” Bahamians.

Mr Moss said the Christie administration had wrongly handled its execution of VAT.

At the heart of his argument was the Customs Department and its duty rates. He said VAT had been set up to not only tax goods, but to tax the tax on those goods.

He was speaking during the third day of debate on the 2014-2015 mid-year budget when he chastised his own party for taxing a class of people in the country who were least able to afford it.

Mr Moss explained: “Now we have redefined total landed cost as included tax, including customs tax, excise tax, processing fees and environmental levies. Then you charge VAT. So the effect had been that you do not have a 7.5 per cent tax on landed goods anymore. Now you have a 7.5 per cent tax on those goods and a 7.5 per cent tax on the tax, which you are paying on those goods. That is where the double taxation comes in.

“Take something that is now 35 per cent taxable such as cement, windows and PVC pipes things that everyone buys. You would think that VAT is 7.5 per cent of the cost of buying, transporting and insuring it when you transport it.

“But it is not. It is 7.5 per cent plus, 7.5 per cent of the 35 per cent customs duty. So VAT on those goods on this day, at this moment in time is 10.125 per cent because you are taxing the goods and you are taxing the tax on the goods.”

The MP said for most people today, VAT on a wide range of products, is between 10.1 per cent and 13.875 per cent despite the government’s promised rate of 7.5 per cent across the board on all goods and services.

He said Bahamians would not have had to face such a regressive taxation system had successive administrations exercised fiscal restraint.

“Both governments ran up the national debt even though they come in this House and claim that it was the Free National Movement who ran up the national debt. They didn’t. The PLP and the FNM ran up the national debt from 1973. They ran deficits for every single year (since) independence. But it is true that the FNM in last administration accelerated the accumulation of the national debt,” Mr Moss said.

Disagreeing with the Marco City MP’s position, Elizabeth MP Ryan Pinder said VAT was the right tax for the Christie administration to implement.

He said VAT was a system that had a reputation of expanding the tax base of countries.

Mr Pinder told parliamentarians that VAT was implemented in over 140 countries worldwide as it has been found to be less harmful than other taxes regarding economic growth.