The Tribune

By TANYA SMITH-CARTWRIGHT

tsmith-cartwright@tribunemedia.net

THE government’s announcement of a VAT holiday for school supplies ahead of the new term was welcomed by parents yesterday, however one department store owner does not expect the tax break to bring an increase in sales.

Yesterday, while giving his budget communication, Minister of Finance Peter Turnquest said a two-week VAT holiday will be applied on school items for the first time this year.

“For the first time, the government of the Bahamas will provide for a back-to-school VAT holiday on school supplies, clothing and select food items for the two weeks leading to the reopening of schools thereby providing millions of dollars in savings in aggregate for parents across the country as they prepare students to return to school,” he said.

The tax exemption will only apply to items that are bought locally and not those that are imported directly into the country. Mr Turnquest noted that just as the government wants to support Bahamian parents in this costly annual undertaking, it also wants to support local businesses so the emphasis is on encouraging everyone to shop at home.

Kim Gibson, proprietor of Carey’s Department Store on Mackey Street, said even though the tax holiday will bring relief to consumers, she does not expect an increase in sales.

“As individuals and businesses throughout our country have been hit hard by the coronavirus shutdown, I feel that the relaxation of VAT on school uniforms and school supplies will bring some much needed relief,” Ms Gibson told The Tribune.

“However, we do not expect this (tax reduction) to result in increased sales because many persons have lost their job or are experiencing reduced hours (and pay). We are optimistic though that this downturn in the economy is short lived and the country will eventually experience a rebound.”

Wife and mother of two school aged children, Shantia McPhee-Simon, is happy for the VAT holiday.

“Relaxed VAT on school supplies and uniforms would be a tremendous relief,” she said. “With the impact of COVID-19 on our economy any and every form of relief is greatly appreciated. “Many jobs have been lost and though I anticipate for us to be at a new normal by September, many persons particularly in the tourism industry won’t bounce back as quickly. The VAT exemption period should not be last minute when much needed items are sold out or would send shoppers into a frenzy.”

Accountant Derek Smith Jr is also feeling optimistic about the VAT holiday, but hopes merchants don’t hike prices.

“It’s helpful and thoughtful,” he said. “It has eased the tax burden during a time of uncertainty, while encouraging spending in the economy.

“The decision benefits several stakeholders – merchants and consumers. It also is only applicable locally, so it keeps dollars circulating here. My hope is that merchants do not hike the prices since they are in protected economic space.”

Make-up artist and mother of one Patricia Seymour-Bowleg said the tax holiday is a great plan.

“A financial break is not just a break in the pockets but the mind and emotion as well. Especially considering school fee money that I have to accumulate as well.

“With the VAT waived, it hurts less to shop at home when I would usually shop in the US, especially how travel is basically at a standstill.”