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'No More Taxation Pins And Needles'

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Jeffrey Beckles

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Chamber of Commerce executives have called for "substantive dialogue" with the government on the future of Bahamian taxation to avoid companies being left "sitting on pins and needles".

Jeffrey Beckles, the chamber's chief executive, told Tribune Business that it was unfair for the business community - the government's largest taxpayers and collectors - to be left "waiting for the hammer to fall" in the run-up to the annual budget.

While acknowledging that the Ministry of Finance cannot reveal its full fiscal hand publicly prior to the budget's unveiling, he added that the manner in which the 12 percent VAT hike was sprung on consumers and businesses at end-May 2018 had resulted in many drawing back ahead of this year's announcement.

Warning that "shocks don't help anyone", Mr Beckles said the private sector did not understand why the government has yet to embrace it in talks about how The Bahamas' future tax regime may look - especially given the external pressures from the likes of the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD).

"For the private sector, would it not be great if there was dialogue on the new tax regime?" Mr Beckles asked. "It cannot be a great surprise. We fully respect what the government does and that it cannot conduct its business in public, but businesses are key tax contributors and contribute the lion's share.

"It's not fair if your contributors aren't involved in the dialogue. And it can't be a trite dialogue. It has to be a substantive dialogue, and that's one of the issues we at the Chamber of Commerce feel very strongly is critical for the business community.

"When the business community is sitting on pins and needles, waiting for the hammer to fall, companies are less likely to spend on capital projects, are less likely to hire and undertake expansion activities," the Chamber chief added.

"We fully understand that the Government needs its revenues; we get that. What we don't get is that the lion's share of the contributors cannot participate in the discussion from the genesis of it. Shocks don't help anyone. Planning is more of a boost."

Mr Beckles' comments echo those of Chamber chairman, Michael Maura, who recently told Tribune Business that Bahamian businesses are "anxious and uneasy" over the lack of a "clearly defined tax strategy" from the government.

He said that while the private sector had been able to "take a breath" due to the absence of new or increased taxes in the 2019-2020 budget, many companies are "still unsettled" due to concerns over "what the future has in store".

Mr Maura added that the Chamber had also wanted to "see more" reforms targeting the ease and cost of doing business in last week's budget, particularly when it came to the domestic economy, and called for further improvements in this area to be "a precursor" to any future taxation increases.

Comments

Economist 1 year, 3 months ago

Mr. Beckles is correct. Business likes certainty and they plan purchases and sales projections based on the current market or on what they know is going to happen. If the Government is going to make changes then they must let business several months in advance.

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