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Community : Service Organizations : GB Chamber of Commerce Last Updated: Feb 13, 2017 - 1:45:37 AM

Grand Bahama Chamber Responds to local VAT concerns in the Business Community
By Sarah Kirkby / Leigh Termath
Sep 17, 2014 - 11:56:34 PM

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Freeport, Bahamas – After recent meetings in Freeport and after much local commentary about the upcoming implementation of VAT, the Grand Bahama Chamber of Commerce commented that while Government legislation to some extent recognizes Freeport’s “tax free” status under the Hawksbill Creek Agreement (HCA), it does not go all the way in addressing its members’ concerns.

While the GBCC appreciates the Government’s VAT Team’s meeting with its members, at a recent lunch and a following Town Meeting, the feedback to the Chamber from Freeport Licensees and Members is that the presentation raised more uncertainty than it clarified.  As a result, the Chamber will seek to gain clarification from the Government on various points raised in the meetings and in subsequent discussion and calls from members.  Some of their concerns were:

1.    The principle of charging Value Add Tax (VAT) at the border on value added external to The Bahamas.  This appears merely to be customs duty re-packaged under another name. 

2.    The intent to charge VAT at the border on costs that includes customs duty paid (which is simply a form of Government tax and clearly not a value added input). This viewed, purely and simply, to be taxation of taxation.

3.    The intent to require processing of VAT on business-to-business services between Grand Bahama Port Authority Licensees.  While the VAT paid may be credited back to the business, this appears to be an unnecessary exercise. It also produces an unnecessary but costly exchange between companies that nets Government no tax revenue. It subverts a core principle of Freeport’s operation as an international free trade zone.

4.    The definition of a "service" verses that of a "good", as it relates to the spirit of the Hawksbill Creek Agreement as far as the taxing of supplies used in the operation of businesses.  It would appear, for example, that the leasing or rental of a good, as opposed to the purchase of same, does not make it any less a supply utilized in the operation of a business, and thus exempt from taxation.

5.    The current VAT rollout process directs the national conversation around proposed details for the implementation and collection of new taxes, from businesses and ultimately the people. An equally important conversation to be had simultaneously must be around the detailed commitment and measures that will be implemented to curb and reduce public expenditure.  By force of law businesses are being compelled to contribution substantially to balancing the national budget. The Public Sector, as a logical and fair contribution this process should be compelled to do not less.  What we are hearing instead is “you contribute now…….and we will contribute later!’

The Grand Bahama Chamber is hopeful that Mr. Rolle, his team and the Government will clarify these concerns to the members and the wider business community of Grand Bahama.  The GBCC encourages those who are not members of the Chamber to join so that the collective voice of the Grand Bahama business community will be heard with strength.  
The Chamber is working actively to schedule a follow up meeting with its members before the board remits office at the end of October and hopes to encourage the Government to work in the best interest of those who do business in Grand Bahama.

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