|
|
|
|
Last Updated: Feb 13, 2017 - 1:45:37 AM |
|
Nassau, The Bahamas - Educating the consumer about the benefits of the new Value Added Tax legislation should ease the public's fear of the Government's needs to control its spending.
Financial Secretary, John Rolle, led the discussion on the new legislation at a July 25, Ministry of Finance "Meet the Press" presentation at the Gladstone Road Freight Terminal.
Mr. Rolle explained that VAT is a broad based consumption tax, applying a 7.5 percent rate in the price of most purchased goods and services. He said the tax would be collected by businesses and passed along to the Government to provide a stable source of revenue and support the broader strategy to reduce the Government's debt burden. FS Rolle said less debt would free up more resources to spend on basic services such as police protection, education, medical facilities and social services.
"Some services like school fees, residential rent, land purchases, home sales, interest payments on loans, and life insurance, for example, will be VAT-exempt. The impact on the cost of living is estimated at less than five percent," said FS Rolle.
"At the cash register, the VAT is the same as a sales tax. However, there are differences that make it less risky for the government to collect. The extra security for the government is that it is collected in stages, whenever businesses make purchases or sales. After the final sale, businesses pass the tax on to the government, after claiming credits for VAT paid earlier. With sales taxes consumers may be charged even higher prices instead so that businesses can recover these same charges."
The Ministry of Finance wants the public to know the Government of The Bahamas introduced VAT to apply on goods and services imported into The Bahamas to be purchased locally. It will be implemented under the responsibility of the Ministry of Finance's VAT Department and handed over to Central Revenue Administration (CRA), which will centralise collection of several other important domestic taxes including Business Licence and Real Property Tax.
"Only businesses that are registered with the VAT Department would be able to charge VAT. Registrants would be issued a VAT registration certificate and VAT registration number. Any company not registered would not be able to charge VAT," said FS Rolle.
He said the tax is being implemented by the VAT Unit of the Ministry of Finance, after which the Unit will transform into the VAT Department and begin a process of merger with the Department of Inland Revenue to become the Central Revenue Administration (CRA)."
It was noted that the Ministry also wants the public to know VAT is only one element in the reform plan, as some $100 million in new revenue measures were introduced in the 2013 / 14 budget. Finance also stated that the real property tax administration system is being revamped to introduce modern legislation and modern computer information systems, to strengthen collections and introduce a fairer method of appraising property values. Finance has also planned an aggressive programme to collect unpaid taxes.
"The VAT, along with other broad reforms to control spending and improve revenue collection, will immediately reduce the amount of borrowing needed to finance the government's operations. Sticking to this plan would help to eliminate the deficit and allow us to begin to reduce our debt," said FS Rolle.
© Copyright 2014 by thebahamasweekly.com
Top of Page
|
|
|
|
