Draft legislation for the proposed value added tax (VAT) should be completed next week and brought to Parliament in the summer.
“We expect to have the draft legislation hopefully by next week and then we will have to go through the whole process of considering it. Our timetable is for it to be laid in Parliament before we break for the summer,” according to Michael Halkitis, minister of state for finance.
Halkitis confirmed the government’s plans to debate the proposed bill in the fall and have it in place before January 2014. Officials at the Ministry of Finance have already begun its consultation phase.
“We’ve gone to Andros and held a meeting there, so we have already begun consultations with professionals and business groups. We’ve also had meetings with Bahamas Hotel and Tourism Association (BHTA), Bahamas Institute of Chartered Accountants (BICA) and the manufacturers associations,” he shared following the weekly Cabinet meeting yesterday.
“So we are in the process of getting feedback from industry stakeholders, taking notes and making the necessary changes. The white paper
that we recently released is in fact a discussion paper.”
BICA President Jasmine Davis shared with Guardian Business last month after that association hosted a VAT conference that there are concerns when it comes to the implementation of VAT and how it will impact those in the accounting profession.
“Like anything else, there is a fear of the unknown because the white paper doesn’t specifically address any of the legislative issues. The legislation is being crafted now as we understand. There are a lot of unanswered questions,” she explained.
Other issues that have been raised by accountants are the country’s ability to implement VAT within the given deadlines and to enforce compliance in a timely manner.
The highly-anticipated white paper was tabled in the House of Assembly in February. Halkitis noted that the proposals in the white paper have a threefold objective: To secure an adequate revenue base in support of modern governance; to establish a tax structure that promotes economic efficiency and stronger economic growth, and to make the tax system more equitable.
The minister of state also noted the government’s plan to consult with various entities including the Inter-American Development Bank (IDB), the International Monetary Fund (IMF) and the Caribbean Regional Assistance (CARTAC) on how to progress with the implementation of VAT.
In March, Cuthbert John, a project consultant with Project & Business Management (PBM) Caribbean, insisted that the government’s July 2014 deadline is doable. But the key to its success will be based on how quickly the government identifies its policies and begins an aggressive awareness campaign.
“The timeline is reasonable and we are going to be aggressive in making sure that the public is educated on what it means for them. Business people need to be educated on what it means for them so that we have a proper buy-in and people are not resistant and understand what we are trying to do,” Halkitis echoed.
More than 150 countries around the world have implemented VAT.
The government is looking to introduce a 15 percent VAT, which would take effect on July 1, 2014.
The nassau Guardian
Published: May 8, 2013