Tuesday, December 16, 2014
EDITOR, The Tribune.
Ref: Real Cost of VAT to consumers
I am a retired person with no business affiliation that requires me to pay VAT other than as a consumer.
I have made hypothetical assumptions which appear to indicate that the cost of an item to a consumer will increase by 15 per cent and not 7.5 per cent as officially stated eg.
Wholesaler
Landed cost before VAT
$100.00
+ $7.50 to Govt
Retailer
Pays Wholesaler
$150.00
+ 10.75 Vat @ 7 1/2% To Govt $4.25
Consumer Pays Retailer
$200.00
+ $15 Vat @ 7 1/2%
To Govt. $4.25
From the example, taking it as understood VAT is a new extra cost, the consumer obviously will pay 15% on the cost of a landed item above what was previously paid.
This is confirmed by the addition of the amount paid by the Wholesaler, Retailer and consumer to the government:-
Net $7.50
$3.25
$4.25
$15.00
Perhaps I have misunderstood the process but it is logical to suppose that if VAT is charged on an escalating value then the amount paid by the consumer will not be 71/2% more than pre-Vat but 15% and the government will surely receive 15% above the pre-Vat cost.
Can someone explain to me how this can be and will my concerns be addressed so that if my assumptions are correct, the Bahamian people are advised of the true additional cost to them of imported items.
ROGER CARPENTER
Nassau,
December 12, 2014.
Comments
asiseeit says...
Do not worry, Cuba is opening up. Therefore nobody will have any money to buy anything, period!
Posted 17 December 2014, 3:31 p.m. Suggest removal
watcher says...
I think that this bungling Government has inadvertently (or deliberately - you decide) given the retailers a huge windfall by insisting on VAT inclusive pricing. Take supermarket shopping - there are some items that I basically know the price of, but come January 1st there is no way I will be able to calculate 7.50% extra in my head for each item bought. If a food item goes up 10% or 11% overnight instead of 7.50% will I know....no way !!
If the check out had one VAT add-on as a separate line, I could still compare the cost of each grocery item. It almost makes me want to start a Facebook page asking friends to note those items that they know the cost of, then see what changes happen after January 1st, 2015
Posted 17 December 2014, 3:40 p.m. Suggest removal
ThisIsOurs says...
Food stores? Super value has been planning for this VAT implementation for a whole year. They have made sure they don't have to wait on any refund to maintain their current profit levels. Everything has gone up its ridiculous, cookies have gone from $5 to $8. Toilet paper has gone up $1+. His is it that an INDIVIDUAL item can increase by so much in so little time? VAT insurance.
Posted 17 December 2014, 7:57 p.m. Suggest removal
ohdrap4 says...
i did witness the other day a customer at super value ranting about the price of a drink.
for years, i tend to plan my menu around price controlled items and produxe which are seasonal or on sale.
i did stock a year's supply of certain items as toiletries, some health supplies, tea , coffee and bought some shoes and clothing.
the prices at lowe's have also gone up considerably.
Posted 17 December 2014, 8:17 p.m. Suggest removal
jackbnimble says...
Yes. All of the above comments are right. Super Value has been going crazy for the past few months. Every two weeks when I shop the price goes up on something. Recently Activia Yogurt jumped from $8.99 to $9.99 and now its $10.49. Organic Milk is now over $7.00 and so is Kellogg's Raisin Bran. I've decided to stop giving them most of my business and now shop "where my money can spend". Cost Rite has these items much cheaper. I just don't get it. And VAT 'een reach yet"!
As for Lowe's everything has doubled! Their prices are now insane as well.
Anyone ever visited Texaco/Ribus Independence Drive (near the Town Centre Mall) lately? All of the snacks have doubled.
Why is this happening... and why aren't these prices being regulated?!!!
Posted 19 December 2014, 11:31 a.m. Suggest removal
ohdrap4 says...
yes you are correct in this example. in many other examples you will pay much more than 15% of the wholesale price.
you will pay 15% of the ticket price.
So if you bring a washing machine valued at 400, you pay 45% duty and 7.5% , or $30 VAT
The merchant might sell the washing machine for $1000 after markup, you pay $75 vat.
Now suppose you have laundromat and it costs $5 to wash, the govt will collect 35c from you each time your customer comes in
Posted 17 December 2014, 4:01 p.m. Suggest removal
asiseeit says...
No matter how much you pay, as it stands, it will be wasted, mismanaged, or stolen.
Posted 17 December 2014, 5:46 p.m. Suggest removal
duppyVAT says...
VAT will not reduce the national debt or increase the growth rate of the economy. VAT will increase the cost of living for everyone and reduce the standard of living for the middle class ................... thats the real cost of VAT
Posted 17 December 2014, 8:02 p.m. Suggest removal
TheMadHatter says...
You are right about the cost, but you are not seeing the benefit. The benefit is that many people in this country who are now not paying a dime to attend free schools and free government clinics are now going to have to pay something.
No food items are VAT free - like they are duty free. There are segments of the population that only buy and consume price controlled items. They are now going to have to pay.
Free schools and free clinics ($10 actually) are NOT FREE. They have been costing Bahamians plenty of money for decades. At leat now, they are going to cost everybody money. Those building contractors who have been saving money by hiring certain persons? Time for them to pay up. Those Bahamians who won't hire a fellow Bahamian to mow their yard? Time for them to pay up.
It's time to pay the piper for our misdeeds. I am glad VAT is here. It will make everyone pay what they should, AND it will make people QUESTION more where that money (and duty money) is going.
**TheMadHatter**
Posted 18 December 2014, 1:07 p.m. Suggest removal
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