A delay in the Value Added Tax (VAT) implementation date will minimise the expense and challenges of converting to a VAT scheme particularly for small businesses, according to Hotel and Tourism Association (BHTA) President Stuart Bowe.
“BHTA welcomes the delay in implementing a VAT which will allow adequate time for the public and private sectors to do the planning, training, and operational conversions necessary for the transition,” Mr. Bowe said.
“We have reached out to the Ministry of Finance in recent months and expressed our desire to work together towards the tourism industry’s VAT implementation. This will be particularly important for our Family Island and small and medium sized businesses. Failure to plan will place an added financial and operational burden on businesses and could prevent the government from realising its anticipated revenue.”
He added that BHTA conducted a survey earlier this year which revealed that only 22 per cent of the respondents indicated that they had a full understanding of how a VAT works.
“Beyond their desire to understand new legislation, accompanying regulations, and reporting requirements, businesses cited the need for understanding the necessary changes to accounting and inventory systems, installing new point-of-sales systems, revising contracts and menus, and training staff well in advance of VAT’s effective implementation date,” he added.
“Businesses also expressed concerns about transition matters affecting purchasing, inventory management, and existing business contracts. Not being prepared for the transition could place a much higher financial burden on businesses. We are moving quickly to prevent an ineffective conversion process.”
Last month, two New Zealand-based VAT experts visited The Bahamas to consult the government on the proposed tax; however, those experts reportedly advised the administration to consider pushing the enforcement date to 2015 and lowering its proposed tax rate of 15 per cent.
Since then, the government announced its decision to delay its proposed implementation of VAT; however, Deputy Prime Minister Philip Davis has since said that removing the highly controversial legislation from the table altogether is not an option.
Mr. Davis said that even though VAT’s implementation is being delayed the government will forge ahead with completing its legislation.
Mr. Bowe said that it is essential to mobilise forces with the Ministry of Finance and other private sector organisations to put in place a collaborative readiness plan.
“We were impressed by the approach undertaken by New Zealand where the private sector was well-engaged in the readiness process, helping to write the plan and facilitating its delivery. We look forward to a similar engagement with the Ministry,” he said.
The Christie Administration has not outlined a new timeframe for when it now expects for VAT to come on stream.
