Dear Editor,
I see our Ministry of Finance is still insisting that we Bahamians should be cursed with a Value Added Tax (VAT), apparently for no better reason than "everybody else has one." "There are none so blind as those who will not see" VAT basically started in Europe in the '50's and '60's where that continent was moving towards a more "federalised" entity and the national Customs and Excise departments, in those member states, were drastically cut back as no duties were levied between member states, thereby making a substantial number of public employees potentially jobless, and, in European states, like many countries, it is very difficult to "fire" public employees. The upshot was a new tax on consumption was envisioned to absorb those displaced customs employees. A "sales tax" charged at the retail point of sale was deemed too simple, so this very complex and exceedingly expensive value added tax was concocted, initially by the French, whereby at each stage of "production" the tax is charged "piece piece" with the ultimate retail buyer paying the full tax.
The only plus I can see from this is there will be no unemployed accountants in the Commonwealth of the Bahamas, this last because EVERY corporate entity involved in the "production" process would be well advised to employ somebody with accounting experience just to handle the "VAT" situation on behalf of that company.
Before we get too far down this slippery, rocky VAT road, please, Mr. Minister can we go with a simple Sales Tax, then John Doe's cashier will simply add the necessary percentage to the bill at the point of sale and his book-keeper just adds up the sales tax ledger and cuts a cheque to the Treasury for the tax due?
H. Armbrister
May 15, 2013
It is going to be very interesting, to be sure,
I have no doubt Bahamian “innovation” will rise to the occasion, quickly becoming expert at VAT Avoidance.
We already have the mechanism for it: The Cash Economy.
Also, while Taxes have been and are still somewhat hidden in the Bahamas, either outright at retail, or masquerading as “Fees” from various Government Departments and Financial institutions, this should no longer be the case.
Vat should be shown at point of sale as a line item, as sales tax is in the U.S. for example.
Government will not push for this, only that collection and remittance is being done on the books internal and audit-able by them.
Retailers should, as a matter of self defense, show it on each and every invoice or receipt.
Otherwise, the public, to the Politicos delight, will take the heat and be demonized as the cost of living rises sharply for each and every one of us.
Lay the blame at the feet of the Man who owns the shoes.
As for the accountants, yes, I do suppose they are salivating at guaranteed employment, which will also add to the costs of doing business.
Keeping track of the VAT Value Credit one has with the Government is going to prove interesting, as most Government accounting staff cannot fathom simple account statements, and lose documentation routinely.
Yes, the Same Government which resides in 90 days or beyond with the Private sector if allowed, and Gives no credit to anyone itself!
I need to add, as per your last line,
The treasury does not accept Checks unless certified!
Cash only!!
Oracle, your comment concerning VAT being shown as a line item, unfortunately can’t work here, don’t forget the price displayed for an article for sale (retail anyway) must show the full price charged, no additional fees or taxes can be added. This happened in the UK when VAT was first introduced there, retail establishments continued to display the actual price of the good and added the VAT at the check-out; retailers were taken to court and lost