The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

“Hundreds of letters” have been issued to offending businesses by the Ministry of Finance’s Value-Added Tax (VAT) Unit, it was revealed yesterday, with the private sector urged to not blame price increases solely on the new tax.

VAT Education Task Force co-chair, Jasmine Davis, confirmed the VAT Department has issued multiple letters for VAT infractions.

“As we have been informed, there have been hundreds of letters disseminated for infractions,” she said. “Infractions can range from minor to very serious, but we can’t necessarily say what that number is. It just speaks to the fact that the Government is trying to move in real time as it relates to any infractions and any persons found in contravention of the law,”

Her fellow Education Task Force co-chair said it was an “error” for businesses to attribute price increases solely to VAT’s introduction, adding that while there are other costs associated with doing business, “we cannot put the entire blame on just VAT”.

    Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief executive, said that since the January 1 implementation, many consumers have accused merchants of what they believe to be price gouging.

Speaking at a press conference, Mr Sumner said: “It’s a common thing that we’ve heard in the last couple of weeks since VAT was implemented.

“Let me say that while we expect and hope that the merchants who are benefiting from the reductions in Customs duties on a number of items, and who are also benefiting from the fact that they no longer have to pay Customs duties on their freight payments and insurance costs, that they would be able to pass those savings on to their customers,  I would like to also say that the merchants who have adjusted their prices would’ve made adjustments to include VAT now, which is not a cost to their business operations but is an ancillary cost that’s being passed to the consumer

“We also want to make note that there are some merchants who have had to apply for a Business License or they had to renew the Business License that was delinquent. That represented costs to them that really should’ve been paid all along. It was allowed to accumulate and now they find themselves having to pay back costs.”

    Mr Sumner added: “There are other costs of doing business that would’ve caused some businesses to marginally increase their prices in line with the generally increased cost of doing business.

“The merchants who are raising their prices and saying that the prices are being raised just because of VAT, I think, is an error. There are maybe other costs affiliated with businesses having to raise their prices but we cannot put the entire blame on just VAT. We want to be sure that the consumer understands that VAT is not the sole cost of businesses having to raise their prices.”

   Ms Davis, meanwhile, said VAT registration was still ongoing. “Registration will be ongoing for the duration of the tax. Any new business coming on stream, any persons who felt that they missed the November 30 deadline, just to provide some clarity, that was the deadline without being exposed to penalties because there are persons out there who think registration is closed so they can’t register any more, but that’s not the case,” she said.

Mr Sumner emphasised that businesses must display their VAT certificates. “There are some persons calling, saying they have not seen a certificate or the tax ID number was not represented on the receipts,” he said.

“We want to say it’s important to see the certificate that’s mounted on the wall, and there are some distinguishing features that you should be aware of.”

    Mr Sumner said the Task Force plans to do further outreach in the Family Islands, where inquiries about adding VAT to the cost of goods shipped to the islands have arisen.

“There was some concern raised about the mail-boat service and charging VAT on mail-boat services to carry items to the Family Islands, but we know that traditionally the Family Islands have always had this challenge where, in many instances, the costs of their goods are higher than the cost of goods in New Providence,” Mr Sumner said.

“We have a plan to have outreach into the Family Islands. We’ve been to the Family Islands, and we do have plans to go back to have discussions with residents of these islands, and to work with some of the private sector organisations of the islands, the Government offices, such as the administrator’s office, to ensure we get information out to the Family Islands.

“Nassau is the centre of where information is being emitted from, but we certainly want to make sure that Family Island residents feel as involved.”