Categorized | National News

Cooper Cautions Govt Over Possible 15% VAT Increase

The government’s proposal to reduce value-added tax (VAT) could later result in a possible 15 percent increase, according to the opposition’s Shadow Minister of Financial Services Chester Cooper.

During his contribution to the 2017/2018 Budget Communication debate last Thursday, Mr. Cooper admonished the Minnis led administration to use the current VAT system as an opportunity to prove itself.

He said time should be given for a comprehensive orientation on the complex triggers and a thorough examination of the impact of the proposed exemptions.

Mr. Cooper further charged that varying rates or exemptions would require system amendments.

Furthermore, he said it increases the complexity of the tax collecting and filing process which he noted is already a sore point for the business community.

Additionally, Mr. Cooper said a change would likely impact the level of system related costs and the compliance rates experienced with VAT.

“Who analyzed these campaign promises? They would have had access to the great body of work by the chamber and its Oxford economist the IMF, the IDB and the Compass Lexicon,” he said.

“Which I believe was the U.S consultant directly engaged by the government and others who directly rely on empirical analysis. Should the government start tinkering with VAT where it needs not, I foreshadow that it would likely result in the increase of VAT to as high as 15 percent.”

While he served as chairman of the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC,) Mr. Cooper had negotiations surrounding VAT with the then Progressive Liberal Party (PLP) administration.

If the government is determined to make a change in VAT, Mr. Cooper said fewer exemptions and more elimination of custom duties may be the way to go to create a more comprehensive VAT system.

He also suggested a simple filing and collection process.

Written by Jones Bahamas

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