Categorized | Featured, National News

DPM: VAT Delayed, Not Denied

The government has made the decision to delay its proposed implementation of Value Added Tax (VAT), however, Deputy Prime Minister Philip Davis said removing the highly controversial legislation from the table altogether is not an option.

Since the Christie Administration announced last year its intentions to introduce VAT by July of this year, reaction to the proposed tax has been strong with numerous business owners and residents alike raising concern about its impact on the economy and the rate at which the government intended to impose the tax.

Just last week, 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 delaying the enforcement date and lowering its proposed tax rate of 15 per cent.

Mr. Davis confirmed yesterday that all these factors weighed into the decision to delay implementing VAT.

“If the people whom these taxes would have impacted did not make the kind of comments they’ve made, make the kind of contributions they were making to this new tax regime, the debate may have been feasible,” Mr. Davis told reporters outside Cabinet Tuesday. “But having regard toward what they have said, good sense and prudence dictate that July 1 may not be a good date. The prime minister himself, if people were listening, was foreshadowing these eventualities.”

This move to delay VAT is being seen as a win for critics of the tax and some are suggesting that the delay signals the end of the proposition of tax, but Mr. Davis said those assertions are premature.

“I don’t know if taking it off the table is an option,” he added. “But what is on the table which is accepted by all is that something has to happen – there has to be some form of tax reformation and what form it takes is what’s being debated right now.”

It has also been suggested that the government raise the revenue it hoped to gain through VAT by taxing web shops and while legislation creating the framework to begin regulating and taxing these enterprises is expected to be introduced at some point this year, Mr. Davis insisted that as a sole measure to addressing the country’s financial woes, this option is woefully inadequate.

“That eventuality is not real,” he said. “The financial deficit that we find ourselves in, what the country needs for it to survive, I don’t think that just taxing web shops in and of itself, would be sufficient to answer the challenges we face.”

Mr. Davis said that even though VAT’s implementation is being delayed the government will forge ahead with completing its legislation.

The Christie Administration has not outlined a new timeframe for when it now expects for VAT to come on stream.

Written by Jones Bahamas

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