The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Businesses are “getting it a lot more” in terms of how Value-Added Tax (VAT) works, the tax’s Comptroller praising the private sector for “tremendous progress” during the transition period.

John Rolle told Tribune Business that both the 6,000 VAT registrants and consumers had “done their part” on the new tax’s roll-out and implementation to-date.

He added that “getting each VAT registrant to concentrate on what’s happening inside their business reinforced’ how the tax was supposed to work, while the tendency of Bahamian consumers to ask questions “at the cash register” had also boosted the process.

“It has been tremendous progress in terms of the transition,” Mr Rolle, who is also the Ministry of Finance’s financial secretary, told Tribune Business.

“As we transition into next month, we will be more attentive on the compliance side to see what businesses are doing internally in terms of inclusive pricing.

“This is a time when consumer have to be more alert on the prices they’re being charged, and what’s being calculated at the cash register. That is part of the consumer education that has to take place.”

Mr Rolle said VAT registrants were now understanding more how the tax worked, especially the ‘netting off’ of ‘input’ payments versus ‘outputs’, and how credits worked.

This, he added, was making companies realise that the 7.5 per cent levy was a tax paid 100 per cent by the end-consumer, and that it should be a simple ‘pass through’ to them, thus making many of the price increases seen in January unnecessary.

“What I believe is happening is that businesses are getting it a lot more in terms of how credits work, and where the inputs work,” Mr Rolle told Tribune Business.

“Once they understand that, they will understand not to do anything unnecessary on the pricing side.

“At the end of the day, they are only collecting VAT on their sales and seeing how that is offset against the VAT on their inputs. Once businesses do the netting, then there’s the amount to be handed over to the Government.”

Mr Rolle said the VAT Department would now place “emphasis” on explaining to registered charities how the system would work for them, and the refunds they could request.

It was also looking to work with fund-raising events, determining whether these would attract VAT or not, and ensuring details were reported to the Department so they could make this determination before the event was held.

Mr Rolle added that the VAT Department was now starting to assess the January returns to ensure it was receiving the necessary information and payments.

“I’m sure there’ll be some accuracy issues, but we expect those will be where businesses need guidance to tweak their record keeping and reporting,” Mr Rolle said.

He added that “a lot of” the almost $11 million in VAT collected by the Customs Department in January would be “recycled as credits” by monthly filers.