PM says: ‘Make best of bad situation’ on VAT

Gowon Bowe

Gowon Bowe


Tribune Business Editor


A “very conciliatory” Prime Minister Perry Christie has urged the private sector to “make the most of a bad situation” on Value-Added Tax (VAT) and its implementation, Tribune Business can reveal.

Gowon Bowe, the Tax Coalition’s chairman, said this was the message delivered by the Prime Minister during their recent meeting, in which he promised to instruct government officials to work closely with the private sector and ensure critical VAT implementation issues did not “bubble up”.

Mr Bowe told Tribune Business that Mr Christie was “reassuring” in his collaboration promises, but it was now a question of how much could be accomplished over the next three weeks before VAT’s January 1 implementation.

Many businesses are likely to be distracted by the peak Christmas sales season, and the Tax Coalition chairman agreed that it was “safe to say” VAT implementation will “not be smooth or seamless”.

Mr Bowe, a PricewaterhouseCoopers (PwC) partner and accountant, said the Government’s VAT education efforts had suffered from a “lack of clarity” and communication with both businesses and the Bahamian people.

He cited the lack of publicity surrounding the Prime Minister’s November 21 final sign-off of the VAT regulations as one example, noting that there were many changes from the initial draft.

However, given the Bahamas’ fiscal realities, Mr Bowe said the country simply could not afford an 11th hour “Mexican stand-off” between the Government and private sector over VAT, with all parties needing to adopt the Prime Minister’s stance.

Recalling their recent meeting, Mr Bowe told Tribune Business: “He was very conciliatory from the perspective of saying we are where we are, let’s make the most of the bad situation we’re in.”

The Tax Coalition chair said Mr Christie had “taken a very active and leading role in requiring his people to work very closely with us, so it doesn’t bubble up” in terms of key issues that could frustrate VAT implementation.

Mr Bowe added that the Prime Minister had “given directions” for the VAT Department to work with the Coalition in drawing up the listing of outstanding VAT issues, “so all matters are on the table”.

And, if proposed solutions to these issues were “totally unpalatable” to the Bahamian private sector, Mr Christie had ordered his officials to “work through” the problems to see if a compromise could be reached.

“Government has a mandate to govern, but it’s very clear that is done in dialogue with the private sector,” Mr Bowe said of the implications of the Prime Minister’s remarks.

“It may not end where it’s most favourable for us, but he was very eager to make sure this was done.”

Mr Bowe added that the third, and final, strand of the Prime Minister’s VAT collaboration plan was for the Government to ensure the private sector knew the solutions for matters deemed resolved.

The Tax Coalition chairman, though, said previous communication woes had damaged the Government’s VAT roll-out.

“He [Mr Christie] signed the final regulations into law on November 21, and they were published on the Government’s website on December 2,” Mr Bowe said.

“There wasn’t much publicity around that. They have changed quite a bit, in a bid to clarify matters that came up.

“They [the Government] really suffered from a lack of clear communication with the community. They could have done a much greater service by a better communication plan, and communicating with on how these matters are being addressed.

Still, Mr Bowe suggested there was now little point in the private sector ‘crying over spilt milk’,.

“Everyone is aware of the reality that’s upon us. We don’t have the luxury of time,” he told Tribune Business. “It’s a matter of saying how much we can get done before now and the end of the year.”

Mr Bowe called for the Government to set “very clear transition rules”, setting out the areas open for discussion/resolution, and how they would be dealt with in VAT’s early months.

He said this was preferable to the Government’s suggested “light touch” regulatory approach to VAT, as it would ensure fair treatment for all and eliminate the possibility of discrimination.

“The light touch approach is too risky because of uneven application,” Mr Bowe told Tribune Business. “If we have very clear transition rules that clarify how matters are dealt with, in a manner that allows all parties to air their grievances, that is better than a light touch approach because it runs the risk of unfavourable treatment.”

He added that training personnel, and readying IT systems, for VAT was “a massive logistical” undertaking for companies already preoccupied in dealing with Christmas sales.

The task was far more complex than simply “flipping a switch” come January 1, Mr Bowe said, adding: “It’s safe to say it’s not going to be smooth or seamless.

“Businesses are not going to be jolly this Christmas season, although they may have higher sales as people rush to buy before implementation.”

Mr Bowe also said businesses had yet to be fully educated on how to file, and remit, their first VAT payments to the Government. Yet he also called on the private sector to make the best of a bad job.

“The time for a Mexican stand-off has long gone,” he told Tribune Business. “There’s certainly going to be apprehension and uncertainty in the business community on January 1, but we’re at the point where we have to make the best of the situation we’re in.

“I don’t expect it to be seamless. Implementation could have been a lot smoother than it currently is. It’s not ideal, but we have to remember this is for us, so it will only be as good or bad as we make it.”


proudloudandfnm 9 years, 7 months ago

Prime Minister can kiss my ass. Fight VAT do everything you can to make it fail. Our government t does not need nor deserve more revenue. Make them do their job first then we can talk about new taxes. Customs is collecting VAT?!?!?!? The same Customs that can't collect duty? The same customs that lets their friends get whatever they want? Fight this stupid idea...

duppyVAT 9 years, 7 months ago

This is a sad situation ................. it tells us that Perry doesnt have our back ........ he is just making political decisions not decisions in the best interest of the citizens or the future of the country

B_I_D___ 9 years, 7 months ago

January is going to be an epic failure. I got my pantry stocked to the brim with shelf stable foods.

asiseeit 9 years, 7 months ago

This country is F#@%ed! VAT has not been implemented and they are already talking about using it to implement NHI. We where told that we had to have VAT in order to pay off our DEBT. These idiots will waste, mismanage, and steal the money no matter how much they tax the people. Listen up you A$$holes, I AM AT THE EDGE, I HAVE NO MORE TO GIVE. The government has put us in this position yet it refuses to cut back, right size, or do ANYTHING to stop the bleeding of public funds. For the P.M. to say "this is what it is, deal with it" is a complete and utter slap in the face. The failure and corruption of GOVERNMENT is the cause of this mess and they have/will not changed in the slightest. The only thing they do is whip the taxpayers with more taxes! F#@K YOU!

duppyVAT 9 years, 7 months ago

This is a clue that this stupid experiment will fail .............. who will be the fall guy??????

B_I_D___ 9 years, 7 months ago

Not Ryan Pinder...he gone!!

realfreethinker 9 years, 7 months ago

Not perry he was not there for the vote

Regardless 9 years, 7 months ago

The real question is will government use VAT as a sinking fund for the nation's outstanding debt and reduce spending in the public sector. Or will the government use this as a new stream of revenue to spend like drunken sailors prior to the next election?

duppyVAT 9 years, 7 months ago

The latter ........... more spending, more gravy train, more contracts & kickbacks to the political "friends, family and lovers"

asiseeit 9 years, 7 months ago

You don't follow the news hey? They are ALREADY spending the money that they DO NOT HAVE!

Well_mudda_take_sic 9 years, 7 months ago

Bahamian schmucks deserve Christie and those who continue to kiss his arse, like Bowe, who persist in supporting the implementation of a most unfair and highly regressive VAT. Down the road, you will see imbeciles like Christie and Bowe finding any means possible to distance themselves from the dire economic consequences that will undoubtedly flow from VAT!

The_Oracle 9 years, 7 months ago

Easy to be conciliatory while holding a big stick! Power to seize assets, power to empty bank accounts, seize passports, shut down businesses, If they conduct themselves like Immigration it will get ugly. As for customs collecting, you're gonna need a Government issued cut sheet to keep them from introducing their own rules at every level! Added to their own insufficient training it will be rough. Public confusion will be a big issue also, and the merchants and stores will take the heat for Government. Mark my words, when the inevitable inflation kicks in, Government will waste no time in blaming "greedy merchants" Ironic but with major ramifications. Thank Ingraham and Laing when you see them. Perry just holding the IMF instructions.

John 9 years, 7 months ago

VAT is a big rat trap with an oversize piece of cheeze that will snare the unexpected. More than half the companies that registered for VAT are living from hand to mouth or on borrowed funds. They have to scrap to pay operating expenses from day to day and many have signed payment agreements with BEC, National Insurance, property tax and even for extended or delinquent bank loans. Now the government is telling them to collect VAT and turn it in in 30, 90 or 180 days. What do you think will happen to those funds when BEC comes to shut off the power or some other bill needs to be paid? Many business will fall into the trap of not having the funds to submit to government when the time comes and will not make it through the first year of VAT!

B_I_D___ 9 years, 7 months ago

Yeap...expect many many businesses forced to close up shop.

duppyVAT 9 years, 7 months ago

2015 will be the beginning of the end of our present economy ............ VAT will lead to more fiscal problems in our country ............ the Employers' Confederation should not have supported this VAT ............. now we are all screwed ............ they had their chance to stand up .......... TOO LATE

TheMadHatter 9 years, 7 months ago

And the stupid website people would not put the Dec 2nd addition in the News/Press Release section of the website - nor on the main page.

The final rules that have been long awaited - and are now here - are being kept a secret. Why not let people know that they are now available on the website?

Also, the Govt still refuses to list specifically what items of info need to be on a sales receipt. They are concentrating on invoices entirely.

There are a lot of sales receipts printed daily in this country. I guess there won't be any sales after Jan 1st - cause nobody wants to go to jail just to sell a soda or a candy bar.

Publius 9 years, 7 months ago

The Prime Minister has called VAT a "bad situation"? Ha!!

duppyVAT 9 years, 7 months ago

Is that why he didn't take the lead in Parliament on this?????? So he can have Halkitis as the fall guy????????? Why did Ryan Pinder resign for real????

The_Messenger 9 years, 7 months ago

With only a few weeks to go before VAT the PM has called the VAT situation BAD yet HE is responsible for this BAD situation. Remember this is the same PM who went to Las Vegas after he convinced the rest of his blind followers to rush the VAT bill through at the eleventh hour.

The owners of this big mess is the PM, the PLP and no one else.

kairosmatt 9 years, 7 months ago

My favourite is the light touch approach. That's specifically for Brave Davis and Co and the like, so they don't have to spend they're easily stolen money on taxes.

duppyVAT 9 years, 7 months ago

I trust that ALL of the VAT registrants be posted in the newspapers and Gazette prior to January 1st 2015 and every month after that. This is going to be one mess !!!!!!! You must ONLY pay VAT if you see a VAT registration certificate posted in the business!!!!!! And they can print it off the VAT website!!!!! Jokes. They dont know Bahamians hey????????

bandit 9 years, 7 months ago

What the prime is not saying, is that although he may not agree with VAT. It is probably a stipulation that was place on the country by the IMF in order to pay down the huge debt that this country is sinking under.

The_Oracle 9 years, 7 months ago

Bandit it is exactly the IMF who is driving VAT, and awaiting the data that VAT reporting will provide. Data that up to this point has ben shielded from the Ministry of finance et al. Wonder what they need that data for? Not much of an imagination needed to figure that out.

B_I_D___ 9 years, 7 months ago

Sadly while this whole VAT thing has been 'earmarked' for debt reduction, it will never be used to pay down debt...just fund more politically motivated schemes and pockets.

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