The Tribune

By NATARIO 
McKENZIE

Tribune Business 
Reporter

nmckenzie@
tribunemedia.net

Several businesses said yesterday they were bracing for a sales slowdown and increased costs as a result of Value-Added Tax (VAT), with one auto dealer telling this newspaper he anticipated an increase in used car sales.

Fred Albury, president of Executive Motors and Omega Motors, respectively the Toyota and BMW dealers, and head of the Bahamas Motor Dealers Association (BMDA), said used car sales were expected to increase.

“The impact that we are bracing ourselves for is going to be a tremendous price increase, even though there is going to be some allowance for recalculation on imports from CIF to FOB,” he added.

“It’s still going to have an impact. The used cars will get cheaper and the new cars will get more expensive. We’re expecting, because of the price increase, for there to be a slow down. We are trying to liquidate as much as possible and run lean inventory for the first half of 2015 to see where the consumer psyche is at.

“We feel there will be resistance. People will hold off. That’s the fear that we have.

Mr Albury did not rule out the possibility of having to lay-off staff, but said: “I will have to deal with that when I get to it”.

Peter Bates, general manager of the Sign Man, told Tribune Business: “There will definitely be an increase in my overheard costs. I was unaware of the point at which VAT was payable on a sale.

“For instance, if you get a deposit and won’t get the rest of the payment for a few months, you actually have to pay the VAT on the deposit. You have to keep track of that. Thera are some issues that were a negative surprise. I think there will be some initial confusion and mistakes but, all in all, I think it will work out. I’m optimistic about it working out.”

Dennis Lightbourne, head of the Abaco Chamber of Commerce, said businesses on that island were ready for VAT in the sense that they were willing to learn and determine what they need to do to prepare for January 1.

“The Chamber’s focus is to gets as many businesses on board as we can. We are shooting for the highest level of compliance that we can. We need as many business involved as we can get to do this thing properly,” said Mr Lightbourne.