Turnquest: Govt did not get VAT alternatives from private sector
Deputy Prime Minister and Minister of Finance Peter Turnquest told Guardian Business yesterday that the government received no recommendations from the private sector on alternative revenue generating methods outside of an increase in value-added tax (VAT), despite the insistence from the private sector that those suggestions occurred prior to the 2018/2019 budget debate, and that they existed since the implementation of VAT three years ago.
Turnquest said previously that government met with private sector representatives prior to the budget, but withheld its plan to increase VAT from 7.5 percent to 12 percent at the start of the budget cycle on July 1.
The private sector has been up in arms because of the government’s lack of consultation regarding the proposed increase in VAT. It has been even more taken aback by the short period of time to implement the change in the VAT rate.
Bahamas Chamber of Commerce and Employers’ Confederation CEO Edison Sumner said the Chamber has asked government for an extension of the VAT implementation date, especially as the short time frame could put a financial strain on businesses. It is also working on a report outlining the impact of the VAT hike.
“We have written to the DPM asking him to give us some time to allow the report to be written and once it is done, we will share the report in totality with the government in an effort to help the government and the private sector understand the real implications of this increase in VAT on the private sector, and how we can support the government’s revenue stream,” Sumner said.
Bahamas Institute of Chartered Accountants President Gowon Bowe explained that many alternatives to VAT increases have been offered, even at the time VAT was being implemented. Several economic watchdogs have offered input into alternative revenue generating methods for the Bahamas government.
Bowe pointed out, “How long was the government contemplating new tax initiatives, and how long did it give those wishing to contribute to actually make a contribution?
“When VAT was being first discussed, the government of the day demonstrated the same arrogance and proceeded to implement without real consultation until the groundswell became so large that it was made to pause and provide time for studies by independent parties. The minister of finance advised the general public of the changes on May 30, 2018, after presumably weeks and months of analyses, and then says alternatives have not been presented less than one week later.”