Categorized | Business, National News

VAT Will Reduce Fraud, Attorney Says

The government is confident that adopting Value Added Tax (VAT) will lead to a significant reduction in cases of tax fraud, according to a legal expert in the Ministry of Finance.

“VAT will reduce fraud because it creates more transparency at every stage from production, to importation, to point of sale,” attorney Renee Fisher told workers at the Department of Housing recently.

“Business will be split into various sectors and each will be given a single TIN (tax identification number), so fraud will be easier to spot.”

Experts have repeatedly demonstrated that in many countries where VAT is the accepted form of taxation it has served as a catalyst for the improvement and modernisation of national fiscal regimes because it forces the standardisation and computerisation of collection and oversight systems.

Ms. Fisher said among the many benefits of this would be a reduction in the fraudulent cases which undermine revenue collection.

“In the end, it will be better for the consumer, as it will lead to increased accountability,” she said.

“Most systems already have a tax option embedded that can be reconfigured to show the VAT automatically. Businesses already submit Customs forms, that will have to be modified to show the VAT percentage.”

The attorney told public servants that the revenue improvements now sought became necessary after successive Bahamian governments operated at deficits for years.

She also explained that remedial action must be taken before the country “goes off the cliff” of currency devaluation.

“A devalued Bahamian dollar would lead to a significant rapid rise in government debt, less capacity for the Bahamas to borrow money in an emergency, a credit downgrade and the eventual loss of access to credit markets,” she said.

“For the average Bahamian, this would mean even more new taxes, large reductions in spending to curtail public services, and large job cuts in the Public Service. Most importantly, a shrinking dollar would translate into higher prices for consumers.”

The seminar was the latest in an ongoing series of public education presentations hosted by the government as it continues to prepare for the implementation of VAT.

Written by Jones Bahamas

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