By DANA SMITH

Tribune Staff Reporter

dsmith@tribunemedia.net

ONE local businessman said he would rather close down his auto-shop than spend money complying with the proposed Value Added Tax system.

The businessman, who wanted to remain anonymous, was responding to a Nassau Institute commissioned report which found that VAT may force the Bahamian economy into further decline, causing the cost of doing business to rise through book-keeping and other expenses.

He called the government’s plan “ridiculous” and said it would invite corruption as businesses will attempt to escape the heavier obligations.

“The VAT, I don’t understand that at all. They need to have some kind of town hall meeting,” he said.

“I would just stop what I’m doing. I’m on the verge of doing that now with the kind of profit I’m getting, and the VAT hasn’t even come yet.

“With all these taxes that they’re imposing on the small businessman, they are encouraging corruption because people will find any way to get away with not paying all these taxes.”

Renee Moree, assistant manager at Cartwright’s Garage, echoed these sentiments – explaining that while they expect to be faced with compliance costs, no one at the company has any idea what VAT really means.

“No one has been here to say anything,” she said. “If they are going to implement this in July, God help us. No one in the Ministry of Finance has returned our calls to answer any questions.

“We don’t what’s going on and it’s really scary for all the business people I’ve talked to. The business community is up in arms.

“They promised to have town hall meetings, they promised to come around to different business houses - we haven’t seen anybody at all.”

A local contractor, who also asked to remain anonymous, said he’s unsure if his construction company will continue to get business once VAT comes into effect as he will have to raise prices for his customers.

He noted that VAT is not good for “service-oriented businesses” in particular and the Bahamas economy as a whole.

“It’s going to hurt me a whole lot,” he said. “When it comes into effect, I’m going to have to pass another 15 per cent onto my clients. I already mark up 15 per cent, so now it will be 30.”

Asked about the Nassau Institute’s report, the contractor adjusted his prediction.

“I was just going to mentioned that,” he said. “I will have to mark up 35 per cent – five per cent for accounting and book-keeping. Instead of me charging 15 per cent it’s going to be 35 per cent. I’m not sure if I will get any work. It’s going to affect us, as contractors, here in the Bahamas.”

For more information about the report, or to get a copy, call 324-2035.