The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A senior Ministry of Finance official yesterday said an increase to the 7.5 per cent Value-Added Tax (VAT) rate was unlikely in the near term, suggesting that even more revenue can be extracted from the existing tax base with further administrative “tightening”.

John Rolle, the financial secretary, while addressing a Bahamas Institute of Chartered Accountants (BICA) seminar, said: “In my view, I don’t see a reason why anytime in the near term one has to be talking about whether the VAT rate should be adjusted.

“There is nothing in terms of what we are experiencing now that would speak to increasing the VAT rate. At some point, I guess, if the Government has to deal with the issue of the reforms for the accession to WTO, we can look at revising, but it is not a question now. I know that it’s one of the suspicions that people always have.”

Mr Rolle said that strengthening VAT administration and increased efficiency could lead to even greater revenue collection for the Government.

“We think that once we tighten up the administration and compliance, there is more revenue in the existing base that can be collected,” he added.

Mr Rolle said the number of businesses who have registered for VAT has exceeded the Ministry of Finance’s initial projections, with more than 6,000 registrants.

Mr Rolle added that the Government’s VAT revenue intake has reduced its need to borrow.

He said roughly half the Government’s VAT revenue is collected at the border through Customs, with the remainder collected when businesses file their returns and make payments.