Categorized | National News

“Business Sector Over-Taxed”

Some argue that the business community is already overtaxed, and a panel of financial experts agreed.

Edison Sumner, Chief Executive Officer  of The Bahamas Chamber of Commerce, said that the general sentiments from the business sector is that they didn’t expect Value Added Tax (VAT) to increase to 12 percent, which now requires them to have to make adjustments and at this point, the timing was bad for many businesses.

However, he said the business sector does not mind paying taxes once they can see the benefits of paying taxes in their business.

“They don’t mind supporting the government’s fiscal policies and budgets if they can see that what they’re supporting is also supporting their business,” he said. 

“The challenge is that when we introduced VAT back in 2015, you know it took us a year and then a few months to really implement it properly.

“That public education we went through extensively throughout the country talking about it, had extensive discussions with governments leading up to it.

“But it gave everyone an opportunity to get themselves prepared, get themselves ready for that imminent introduction of VAT.

“And even though it was a bitter pill to swallow, the majority of persons then, people are still complaining about it mind you but they’ve gotten used to the system of VAT, and it has become a very efficient system of operations in the country.”

As for the impact of increased taxation on the overall economy, Accountant, Phillip Galanis of HLB Galanis and CO, said people are just focusing on their survival. 

“Bahamians are looking askance at the increase of VAT, wondering one, whether or not they’ll be able to survive and how they are going to be able to recalibrate their businesses to adjust to the increase,” he said.

“And secondly, whether or not they’re going to see value for their money. It’s going to also place an enormous demand or pressure on businesses to manage their cash flow better.

“Because you’ve got to, if you are businesses of a certain level report quarterly and if you’re at a higher level you have to report monthly to the government.

“It means that your cash flow then needs to be monitored, calibrated in a way that you’re able to pay the tax man when the tax man cometh,” said Galanis.

As for the fear of the VAT  increase, Gowon Bowe, Chief Financial Officer  of Fidelity Bank, said had the government presented the appropriate analysis, persons reactions would not have been as emotive.

“There is this continuing concern and which is more critical the lack of confidence that these initiatives will achieve the objective,” he said.

“And I think those two elements compiled with one, uncertainty as to what it is projected to do to my cost of living and my buying power and secondly, is it going to achieve the objective for which it was announced to be put in place.

“If there is not confidence in that, it becomes somewhat self-prophesying because people’s natural reaction is going to be before I even understand the impact, I’m going to pull back because I’m not sure that I can buy everything, I’m not sure that I can do the same things. 

“So it’s not too late, I think government has a responsibility, not only would it be to their benefit but I believe a responsibility to demonstrate to the community that this was analyzed not on the back of an envelope but analyzed in an actual economic study that allowed them to say we considered 10, 12, exemptions all elements, ” said Mr. Bowe.

The men all appeared as guests on the  Love 97 Radio and Television  talk show, Jones and Company. 

Written by Jones Bahamas

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