Kudos to the Tribune for publishing these articles on VAT.
I am sorry though, that no one talks or writes about the increased costs to the public, other than a letter from a Freeport business owner published a couple of weeks ago.

Do people realize that Wendy's and KFC food will be subject to VAT? No one says how much, although it has been announced that food and beverages at hotels will be subject to 10%.

What about groceries, are there going to be varying rates of VAT for items, just as there are price controls now?

The scripture display to the left of the honourable minister, is ominous, it is Luke:22-34

"Consider the ravens, for they neither sow nor reap, which have neither storehouse nor barn; and go feeds them."

When I die I will come back as a raven. Or as an MP.

Everything we buy/use/eat/drink has vat on.

**SMALL ISLAND DYNAMIC** by richard teether
According to Teather, no small island country had VAT until 1989, and it was long thought that they were unsuited to it.

He stated that this is because of a combination of two reasons.

Firstly in a small country, the costs of implementing a VAT system can be disproportionately high.

And in a small island economy, a high proportion of the economy is based on imports, which can be taxed by means of much simpler import duties, and with proportionately very little domestic value-added business that needs to be taxed by way of a VAT.

The tax expert said, "The natural and logical way to tax consumption in such economies would therefore be by way of import duties; they are easy to operate and relatively cheap to collect, and in a typical small island economy with relatively little domestic production a well-designed import duty combined with a few specific taxes will tax almost all consumption.”

The report noted that the biggest effect on consumers will be felt in the retail sector, as prices are increased by VAT.

It said, "It has been said that the effect will be minimal, because import duties will be reduced by a similar amount to the VAT rate.

"However this misses the crucial distinction between import duties and VAT; import duties are charged on the import value, whereas VAT is charged on the resale value. It is that difference that will make the cost to the consumer of VAT much higher than import duties.

"Retailers need to add an uplift to cover the costs of distribution and the various costs of operating, heating, lighting and staffing their stores, and so retail costs are typically a multiple of the raw cost of goods.

"There will also be VAT on locally produced goods, and on services. Although the overall effect on the economy and VAT revenues from these will not be great (see below), the impact on individual businesses and consumers will be greater.

"However the impact on locally produced goods and services will depend on which producers are large enough to be over the VAT threshold and so liable to charge VAT.

"Without that information, modelling the effect of VAT on different groups of consumers will be impossible.”

Con/td....

EFFICIENCY
Teather addressed the efficiency of the proposed new model, pointing out that it is not that a VAT cannot be implemented in a small island economy, but whether or not it would be efficient.

He said, "The main reason for the adoption of VAT by small island nations is external pressure to reduce import duties, rather than because VAT has advantages in itself for such islands.

"The growing trend in international trade is for compulsory reduction in import duties, whether via global trading groups such as the World Trade Organisation or regional bodies such as the European Union.

"In the case of small island countries, many have adopted or are considering adopting VAT because of regional international trade agreements such as the Pacific Islands Countries Trade Agreement (PICTA) and the Pacific Agreement on Closer Economic Relations (PACER).

"In other cases, the small island’s proximity to an international trading bloc has forced it
to adopt their import duty reduction programmes.”

However, the report noted too that even though some international agencies, like the International Monetary Fund (IMF) are wholly supportive of VAT, it is not necessarily in favour of VAT for small island nations.

Teather quoted the Deputy Director of the Fiscal Affairs Department of the IMF, Michael Keen, as saying, "The suitability of the VAT for small countries, and for small islands in particular, is an issue that arises with increasing frequency.”

The tax expert pointed out that whilst some Caribbean jurisdictions have indeed adopted a VAT, notably Grenada and Belize, have tried a VAT only to later abandon it.

Teather said, "Overall the expectation is that a VAT is likely to increase administrative costs for both government and business, because a few simple taxes will be replaced by a more complex one. On the revenue side, the analysis of the TCI economy suggests that additional revenues will be small.”

He made it clear that the existing taxes are few and simple.

The tax expert’s final report is expected to be made public soon.

About Richard Teather BA(Oxon) ACA
RICHARD Teather is Senior Lecturer in Taxation in the Bournemouth University Business School, UK.

In addition he is a Fellow of the Adam Smith Institute in London, and a member of the Editorial Advisory Board of the journal Economic Affairs.

He writes and speaks regularly on international taxation, particularly as it affects low-tax jurisdictions and international finance centres, and has been published and cited in five continents.

His book The Benefits of Tax Competition is the leading work on the subject.

All Governments need revenue to pay for Services and infrastructures, yes, but why spend tens of thousands of dollars on purchasing technology, human manpower, etc. when the Government can just charge an across the board income tax, say 5% from persons making more than 50,000 per year. Just how the Employer pays NIB contributions before the employee gets their check, same for income tax, all can be paid directly to National Insurance under "Income Tax" before employees get their checks. End of story. The VAT perception will destroy this country and send us deeper into poverty. That means persons who ate out, can just stay home and avoid Restaurants, spin-off, Restaurants will begin to see a decline in diners, and jobs will be lost, mark my words. Why should I go out and eat, and then end up causing me like 25% more in taxes {i.e, 15% Vat and Gratuity probably at 10 - 15%!). This Government needs to stop bending and save our sovereignty. All Tax Free Havens need to meet and take a stand on this. We can manage our Economy just fine by a mere reasonable income tax, otherwise we will not be the destination we once were, and that is exactly what they [UN and Allies] want. THEY WANT THE BAHAMAS TO FALL, BECAUSE AS A FOREIGN INVESTOR, I WILL NO LONGER HAVE AN INTEREST IN THE BAHAMAS, BECAUSE THE COST OF LIVING IS ALREADY TO HIGH HERE, AND THAT MEANS GOODBYE SECOND HOME OWNERS, GOODBYE FINANCIAL INSTITUTIONS, ETC. WAKE UP PLP....WAKE UP! LIKE LOP SAID "IF YOU DO NOT FIGHT FOR YOUR COUNTRY THEN YOU MIGHT AS WELL NOT BE HERE":

As a US citizen who has resided in the Bahamas for many years, I can only simply laugh at how foolish Bahamian voters are. It is well known that the IMF, WTO, World Bank, IDB, OECD, etc. are all agencies in the main of US foreign policy tasked with destabilizing other countries whenever it is considered to be in the best economic or security interest of the US. The destabilization is typically accomplished by getting the country hooked on more foreign debt than it can possibly ever service. It is also often accomplished by forcing a country to replace its more cost efficient and more easily monitored/enforced taxation systems (like import duties in the case of the Bahamas) with other taxation systems that are not suitable for the country due to their revenue raising ineffectiveness, excessive costliness to administer (for both the government and taxpayers alike) and inability to be cost effectively enforced.
It is really all too easy in countries like the Bahamas with a largely poorly educated voting citizenry to get dimwitted greedy influence peddling politicians and their crony supporters (whether they be on the PLP or FNM side of the table) to "sell out" their country by sucking on the "borrowing tit" placed at their lips by self-interested foreign interests.

Yeap...if VAT gets implemented in it's current form[,][1] can give you a 110% guarantee that we will be plunged into an even deeper recession than we are in now[.][2] The minimum wage employee at the moment cannot make ends meet as it is, businesses are running on razor thin margins at the moment, if they are making any money at all, VAT will drive prices for everything UP, businesses will pass along all those increased fees and taxes onto the consumer...it is a CONSUMER tax...not a business tax, and people have to get that through their heads...everyone just looks at it now as a tax on businesses making over 100K per year...businesses do not just ABSORB additional fees, they add it to their costing of merchandise and increase their mark up accordingly to cover the costs of doing business, driving the price of goods up and taking more money out of the pockets of consumers. What next...government will increase minimum wage? Guess what...that's added business expense...more markup to cover the new costs and no one is any further forward. NO VAT!!

[1]: http://allgamesallfree.com/?id=viewprof…
[2]: http://www.mahee.com/profiles/U1465168

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