By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
CONSUMERS are now beginning to feel the true impact of Value-Added Tax (VAT) on the cost of living, a local businessman said yesterday.
Ben Albury, the Bahamas Bus and Truck general manager, described the introduction of the tax, the Baha Mar delay and limited access to credit as the “trifecta” of sorts which was contributing to a slow down in consumer spending.
Mr Albury noted that new car dealerships were witnessing a near 31 per cent year-over-year sales decline, which he attributed to a combination of VAT and limited consumer access to credit.
“I think in the beginning, the effect of VAT wasn’t as bad as it is now,” he said. “In my opinion, people may not have felt it as much initially but as the months have passed and they pay on their electricity bills, water bills, telephone and now insurance among other things, it’s affecting them more and more and more. “People are coming to the realisation of how much the cost of living has increased, the fact that the job market is very soft and that banks, while they may have cash, are sceptical and cautious about lending,” said Mr Albury.
“What we have seen through our statistics is that the market is down almost 31 per cent over already depressed numbers. Pre-recession things were good and then the numbers went down drastically. We are 31 per cent behind last year which was definitely not a banner year.
“We are seeing a sharp decline on the decline. Some of that can be attributed to VAT and that is applied to insurance policies as well, which is an additional concern for customers. Credit is very difficult for consumers. It’s very challenging for people to access funds. I think that with Baha Mar now being delayed it’s a trifecta of sorts.”
Mr Albury said that the industry was still concerned about paying extremely high business licence fees among other taxes. “It’s definitely driving business down. How much longer are we going to be able to sustain it is the question. Some of us, I think, are just treading water.
“Hopefully something will change in the near future. It’s difficult to know that the government gets a part of your annual turnover without even knowing if you have even made a net profit.”
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