> registrants will effectively act as
> vassal tax collectors for the Treasury

Excellent choice of words. The PLP attitude is that we are vassals anyway. prolly stupid vassals too.

> “For this reason, along with the
> implementation, the Government bodies
> responsible for price control should
> increase their monitoring of business
> prices to protect the final consumer
> from price gouging by the business
> community. “

Bad, bad reasoning, the list of price-controlled items is minuscule, and then you would have to live on a 99 cent breakfast menu.

Take deodorant, for example, it is duty - free, but not price-controlled. It was once dutiable, but i never saw the price of deodorant come down..

> And, while there would be an initial
> negative reaction, Mr Bain said that
> eventually Bahamian consumers will
> become used to paying VAT within the
> sales price, much like they have
> become accustomed to US/Florida sales
> taxes.

And again, another example of poor reasoning, pondering on 20 year old circumstances.
That was before Amazon came about.If i buy an elephant from Amazon, I pay no sales taxes.
The shipping and duty, costs turn out better than the travel costs and excess luggage charges, and I can beat the local prices by 30%-40%.
I shop while resting on my weary bottom. like that woman who drives the volvo.

Online purchases are in fact becoming taxable in the U.S.
State by state, and federal taxation is creeping in.
accepting 7% sales tax is also a little different than 15% ON TOP OF DUTY, FREIGHT and inland freight in some circumstances. (VAT is on top of C.I.F)
While Duty rates are supposed to come down to offset the additional tax, it is not an even swap.
How do you increase Government revenue (by $200 Mil/their figure) without costing someone else? (John Q public, retailers/merchants included)
What the public does not know is becoming increasingly evident, but it seems we are going from misinformation to bad assumption!
get your facts straight on the cost of doing business, and realize the costs that Government levies and takes right off the top.

Perrynomics ................ believe in Bahamians!!!!!!!!!!!!! Go John Bain!!!!!!!!!!!

Did this guy read the NG story by a well known PLP surrogate today??????? Perry cannot continue as Minister of Finance............ he gatta bite da bullet on dis

Mr. Bain suggests that cogent arguments based on fact have no been presented by those that oppose VAT. I think that this is rather the pot calling the kettle black. His arguments in favour of VAT are both flaccid and misconceived. Therefore it is as well to put the real technical reasons against VAT on record so he may refer to them in future.

The much touted C-Efficiency ratio is presented as an indicator of the benefits of VAT in Small Island Nations. However, this is simply a measure of yield that is high as a function of the fact that most things are imported. It does not take into account that a similar calculation, on Customs Duty, yields the same if not better results. Rather than speak on my own behalf, I will let the words of Ebrill the former chief economist at the IMF speak for me. (There is some added explanation in italics without quotation marks that I have added)


“This general strong performance does not imply, however, that the VAT is an especially appropriate tax for these economies.”

“These empirical results relate only to the yield of the VAT. It is also important to look to collection costs, again relative to those of other taxes.” … “It may be that other taxes would also prove good revenue raisers in these economies.”


“Both considerations point to the need to make comparisons with other taxes.”


“For many small economies, however, leading alternatives include a broad-based tariff”

“In practice, however, there are collection costs to be weighed against this gain.” “It is easy to show (see Appendix III) that there are three effects to consider:

• The change in public revenues. Since tax and tariff revenues are simply transfers from public to private sector, this revenue effect should be valued at the marginal efficiency cost of raising revenue; that is, the amount by which the social value of $1 of tax revenue exceeds $1.

• The change in the deadweight loss that arises from distorting the prices that consumers face away from those at which products must be traded on the world market.


• The gain in production efficiency from aligning the prices faced by producers with those on world markets. Tariffs on intermediate products, for example, will induce domestic manufacturers to substitute away from those intermediates, implying production techniques which, valued at the world prices that ultimately determine the opportunities open to the economy, are less efficient than they might be.”

In the Bahamas case, the gain in production efficiency, that forms the economic basis for the introduction of VAT, does not exist. In the Bahamas circumstances, where there is no significant home production and no potential to develop home production on a significant scale, the efficiency gains that offsets the gain in public revenue are not there. The effect therefore is simply a gain in revenue with natural consequence of shrinking the economy. It is all deadweight loss with no benefit. For this central VAT benefit, many stages of production or distribution are a necessary requirement.

“All else equal, the potential revenue gain in moving from a tariff to a VAT is thus likely to be greater the higher consumption is relative to imports.”

“On this account, the advantage of VAT over a broad-based tariff is indeed likely to be less in smaller economies.”

“Taking as a benchmark the case in which it is desirable to tax all goods at the same rate, one key consideration will be the breakdown of final consumption between imports and domestically produced items. If much final consumption is imported, then a broad-based tariff will function in large part as a broad-based consumption tax. In so far as small economies would be expected to be relatively undiversified in their production, much of their consumption is likely to be imported.”

“On balance, there are grounds for presuming that the gain in moving to a VAT from a broad-based tariff will be less in smaller economies, both because the probable widening of the tax base is likely to be less and because more consumption is likely to be caught, in any event, under the tariff.”

“Fixed collection costs may be a particular concern in small economies. As discussed in Chapter 5, there is strong evidence that there are substantial fixed elements in complying with the VAT, which consequently bears more heavily on smaller firms. Insofar as the average size of firms above the appropriate VAT threshold tends to be smaller in smaller economies—which one might expect to be the case—so collection costs will consequently be more burdensome. Presumably there are fixed components to tariff collection costs too.”

“When there are few stages in domestic production, the VAT may offer little gain over a retail sales tax or broad- based tariff.”

“It is appropriate to temper general support for the introduction of a VAT into smaller economies with a note of caution. The gain is likely to be lower in such countries than elsewhere. In some cases, there may be little gain, or even a loss, relative to a broad-based tariff”

“the point needs to be made that in the absence of domestic production there is no economic difference between a consumption tax and a tariff.”

“Less tangible arguments—such as the wisdom of building a tax system suited for a more sophisticated future— are important, but do not reduce the value of simple calculations.”