The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemeda.net

The Bahamas Federation of Retailers (BFR) yesterday accused the Government of “dropping the ball” on the Value-Added Tax (VAT) pricing, adding that it was “out of touch” with the reality of doing business in the Bahamas.

The BFR, in a statement, accused the Christie administration of deliberately choosing VAT ‘inclusive’ to hide the increased tax burden on Bahamian consumers.

“This is not the way to do things in the 21st century. In fact, this is a colonialist approach to governance,” it argued.

“Modern and progressive democracies in the 21st century favour policies that are built on the principles of transparency and accountability. Exclusive pricing is the enlightened, forward thinking policy approach; inclusive pricing is going backwards. That is why the US and Canada favour exclusively priced tax structures.”

February 28 was the deadline for Bahamian retailers to complete the transition to VAT ‘inclusive’ pricing, which the BFR has long opposed.

“The Government’s insistence on VAT inclusive pricing is a travesty for the Bahamian people, and reveals that the Government of the Bahamas does not care about keeping the country competitively priced vis-a-vis other destinations,” the Federation said.

“Competition is a word that the Government only pays lip service to, despite the fact that high prices due to high import duties and VAT are the number one complaint of Bahamians, ex-pats and tourists alike.

“Choosing exclusive pricing over inclusive pricing was a very obvious and easy way for the Government to actually do something that would help with the country’s perception as a high-priced destination,” it added.

“The Government has dropped the ball on this issue to the detriment of the Bahamian people’s ability to compete in an ever-more globalised economy.

“On-line prices and US shelf prices will now always look ‘better’ than local Bahamian prices because the Government has forced every business in the country to price itself 7.5 per cent higher than necessary. The US, Canada and on-line shopping are all done with exclusively priced taxation, after the transaction has taken place.”

The Federation said the VAT ‘inclusive’ pricing structure is completely foreign to 99 per cent of tourists who visit this nation, as well as the vast majority of Bahamians.

“They had the opportunity to strengthen the ability of Bahamian companies to compete in a globalised economy when they lowered duties, but they have now destroyed that potential by forcing VAT ‘inclusive’ pricing on every business,” the BFR said.

“The country needs to wake up and understand that this was not necessary. This could have been done better, and it can still be fixed if the Government would simply listen to the business community on this issue. 

“The Federation said that any action by government that enables Bahamian companies to be priced more competitively would lead to increased sales in the Bahamas, which would ultimately lead to increased employment and increased tax revenue for the Government.

“It’s a classic win-win, but the Government, once again, has failed to listen to the people and has demonstrated that they are out of touch with the reality of doing business in the Bahamas,” the BFR added.

“VAT exclusive pricing was also the more transparent and accountable option, as it would have made it very clear to the Bahamian people which portion of a transaction was the ‘business cost’, and which portion of the transaction was the ‘Government cost’.

“The Government deliberately chose inclusive pricing because they continue to favour policies that hide from the sunshine of transparency and accountability. Government prefers to hide its tax burden on the Bahamian people from the Bahamian people, and this is not the way to do things in the 21st century. “

    The BFR added that the Government is favouring a policy that will push Bahamians, expats and tourists alike to shop abroad, or online, without being able to do accurate price comparisons.

“This policy is bad for Bahamian businesses, bad for employment, bad for Bahamians and bad for government tax revenue,” the Federation said.

“Ultimately, VAT inclusive pricing can be summed up as ‘Bad for the Bahamas’. It is very sad that our government has chosen to ignore the Bahamian business community on this issue. We hope that they will reconsider and implement exclusive pricing as soon as possible so that we can be as competitively priced a destination as possible.”