Categorized | National News

Customs to Lose $200M When VAT Comes On Stream

When Value Added Tax (VAT) is introduced later this year, officials from the Customs Department say revenue for the country’s biggest tax collector will be cut by more than $200 million a year.

According to Assistant Customs Comptroller Tony Scriven, who appeared as a guest on Love 97 FM’s Sunday talk show Jones and Company the Customs Department will be responsible for collecting the lion’s share of monies derived from VAT, more specifically at the borders.

“Under the WTO (World Trade Organisation) and the EPA (Economic Partnership Agreement), in particular the WTO, our customs rates of duties are going to have to be reduced,” Mr. Scriven explained.

“The figures that I have been shown, as the person responsible for the carriage of VAT in the Customs Department, is that we’re going to lose something like $239 million in reduction of customs duty when VAT comes in. So the government has to recoup that in some form and VAT will be the form to recoup that.”

Asst. Comptroller Scriven added that based on the figures shown, at the original 15 per cent rate, VAT would have helped the country collect some $525 million a year.

However, Prime Minister Perry Christie recently announced that the actual introductory rate has not yet been finalised.

“Somewhere the government has to recoup the revenue that will be lost,” Mr. Scriven added. “You know that we’ve been running some serious deficits and the national debt is now about $5 billion and the present tax structure that we have cannot support The Bahamas anymore in its growth.

“Customs being responsible for 60 per cent of the government’s revenue, so with VAT now they will not only be taxing goods but you will be taxing services so the government has broadened its tax bases and ensured that we will have a greater tax flow for the running of the country.”

Customs Comptroller Charles Turner said the department is ready for the introduction of VAT and added that they are in the process of training their officers.

VAT is scheduled to be introduced in July.

Written by Jones Bahamas

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