Not all businesses fully prepared for VAT change, says Chamber CEO
Chief Executive Officer of the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC) Waldon Russell said he does not think some businesses are completely ready for the value-added tax (VAT) reduction from 12 to ten percent, that comes into effect on Saturday.
Russell, who made the remarks yesterday during an appearance on Morning Blend Business on Guardian Radio 96.9 FM, said some in the business community do not have a full understanding of the VAT changes. He said the business community has also not seen a gazetted copy of the VAT changes.
“People are uncertain of whether or not the bill had been passed,” said Russell.
“There were also questions about the rate changes and what they relate to. The business community requested the Department of Inland Revenue (DIR) to publish a fact sheet so people can understand the answers to these questions. So I think the business community is still getting ready for this change at this late hour.”
Russell said there has not been a lot of information disseminated by the government on the VAT changes, adding that the DIR has committed to publishing a fact sheet on the changes.
He explained that the BCCEC recently held a webinar with the DIR on the VAT changes and a video which has some answers to questions businesses may have is available on the Chamber’s website.
He said some of the most pressing questions were related to VAT payments on vacation rental properties, as there was no clarity on how the tax would be collected.
“If the renter is acting in the capacity of a marketplace, he is receiving funds for the rental of that place, he is responsible for paying the VAT,” said Russell.
“But if it’s just a connection arrangement where you’re kind of presenting the property and no cash is exchanged, that person is not the person responsible for collecting the VAT.”
According to Russell, businesses will be prepared to comply with the law when it comes into effect this weekend, but will certainly need a three-month grace period to change prices to reflect the VAT reduction.
“I believe the implementation of the law itself by businesses is not going to be a problem come January 1,” he said. “But it is going to take some time to get the prices on those goods changed. Hopefully businesses will be able to achieve that in the time allocated.”