The increase Value Added Tax by 60 per cent came into effect yesterday with some businesses saying that they are still not prepared.
The decision to increase VAT to 12 per cent came during the Deputy Prime Minister and Minister of Finance’s budget communication on May 30th.
Perfume Bar Manager, Sandy Martinez is one of those who said that her company isn’t ready at all and it all boils down to the government not giving them enough time.
She said, “my business as well as many other businesses I feel are not prepared for the VAT increase. I think the time and notice is too short and I think generally we are going to lose in the long run.
“We are already feeling it; customers are already coming in saying they want to try and buy early to defray the VAT cost, so it’s not looking good according to what I’m hearing out there on the streets.”
Midtown Gifts Owner, Calvin Johnson is a little more optimistic. He expects his sales to stay afloat if the tourism market thrives.
“Personally I’m prepared to make any adjustments in my personal life to mitigate any loss in income, but as a business, I think us downtown will continue to well as long as tourism arrivals are up,” Mr. Johnson said.
Furniture Plus Chief Financial Officer Enie Blues said that they too expect to see a decline in sales at the beginning of the initial rise in VAT.
He said it happened when VAT was introduced initially at 7.5 per cent and shortly after sales picked up again and as a result, he anticipates the same will happen with the VAT increase.
However, he assured the Bahama Journal that they are prepared, and for his business it will only take the flick of a switch.
Finance Minister Peter Turnquest in his budget communication on May 30th said the 60 per cent increase in VAT is necessary to help get the country’s fiscal house in order.
