Aid Blames Vat For 41% Drop In Sales Growth Rate


Tribune Business Reporter


A leading retailer is blaming Value-Added Tax (VAT) for a 41 per cent drop in the sales growth rate at its Nassau stores, while calling on the Government to extend ‘exclusive’ pricing beyond hotels and dine-in restaurants.

Jason Watson, Automotive Industrial Distributors’ (AID) vice-president of operations, told Tribune Business that while the company has met the VAT ‘inclusive’ pricing requirements, the effort was a “major waste of resources”.

Bahamian merchants had to complete the transition to VAT ‘inclusive’ pricing by Saturday, February 28, and the Government announced over the weekend that their “impressive compliance efforts” meant this deadline would not be extended.

Mr Watson, though, argued that ‘inclusive’ pricing compliance costs would not be a “one off” expense, but would continue to accumulate indefinitely while this is enforced.

He said the VAT ‘exclusive’ pricing policy should be “extended to all business types,” something he described as a more practical option. It is also a reference to the seemingly ‘discriminatory’ pricing treatment the Government is permitting in favour of hotels and sit-in restaurants.

“The pervasive role of government in our economy, and inherent political interference, are undermining our economic development. VAT inclusive pricing and price control are prime examples of policies based on political interests instead of economic principles,” said Mr Watson.

“The negative impact of the VAT tax has already resulted in a 41 per cent dip in AID’s Nassau sales growth rate, and several branch stores have had lower sales this January and February compared to the same periods last year.

“Considering that operating costs have risen dramatically, especially due to the increase in the Business License fee rate, a decline in sales growth is a major concern, especially so soon after VAT’s implementation.”

Super Value’s owner Rupert Roberts last week conceded that merchants had effectively “lost the battle” over Value-Added Tax (VAT) ‘inclusive’ pricing, with the supermarket chain having printed over one million new price tags to meet the Government’s demands.

Mr Roberts estimated that the software required to print the VAT ‘inclusive’ price tags, and the “thousands of man hours” involved in re-pricing store and warehouse inventory, had cost Super Value around $100,000.

Several observers have suggested that the Government has opted for VAT ‘inclusive’ pricing because it will camouflage, or disguise, the 7.5 per cent levy, thus ensuring consumers instead blame Bahamian merchants for any price increases.


Regardless 5 years, 7 months ago

Guess one would have factored in the potential effect of VAT in their sales projections knowing the inception date of the tax ahead of time.


Romrok 5 years, 7 months ago

Surely. Everyone waiting for family to bring it from the states now. So much for promoting Bahamian business. I'm glad it's the PLP doing this and the new tax, the beginning and the end from that name. Mind you I don't trust many that came from the Independence era, they all been in it together upto now.


ohdrap4 5 years, 6 months ago

i aint waiting, that is what the couriers are for.

i looked up and item at a hardware store that cost $26.95 plus vat.

amazon sells for 4.95, paying shippping and duty and vat it is still a lot cheaper


The_Oracle 5 years, 6 months ago

Sure it is cheaper, by importing you have cut out Bahamian Salaries, Power bills, Insurances, rent, all the overheads including theft/losses. The airfreight operations overheads are minimal by comparison. Why spend $2.11 billion/yr in Florida, go for broke and spend it all there!


John 5 years, 6 months ago

Retail stores, at least many of them, will go the way of the dinosaurs. It is just too expensive to operate on the retail level and compete with persons who are selling out of their garage or bedro by way of the Internet. Some of these people have no inventory and only purchase what you order after they have your money in hand.


John 5 years, 6 months ago

Even casinos are having to reconfigure their operations to accommodate the new generation and their technology. Young people are multitaskers. They don't want to sit for hours in a casino when they can gamble on their smart phone from a club, from their hotel room or even at the dinner table. So casinos have to design their operations to "catch them on the go."


duppyVAT 5 years, 6 months ago

I am sure the Watson boys have a well diversified portfolio of business interests in this country......... what they lose on AID, they will recoup somewhere else. Millionnaires do not lose, they just adjust.


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