VAT 'is the most complex of taxes'

THE Baker Tilly accounting firm’s global head yesterday described Value-Added Tax as “the most complex of taxes”, mandating that its Bahamian affiliate become “an expert” on the issue.

Geoff Barnes, Baker Tilly International’s president and chief executive, said it was vital that Bahamian companies be “very clear” on cash flow management and financing in a VAT environment, especially those businesses that sell a mix of taxable and “exempt” goods.

Speaking to Tribune Business during a visit to Nassau to meet with the network’s Baker Tilly Gomez affiliate, the London-based Mr Barnes also described the costs associated with collecting VAT in the UK as “enormous”.

“VAT historically has been the most complex of taxes,” Mr Barnes told this newspaper, noting that it involved far more than simply paying 15 per cent on an invoice.

“Our tax partners believe VAT is the most complex of taxes, with the exception of inheritance tax.”

The Baker Tilly chief’s comments will likely add to private sector concerns that VAT is not the best tax reform solution for the Bahamas, given its complexities and associated administrative costs.

The Coalition for Responsible Taxation has repeatedly argued that the Bahamas should opt for a payroll tax, citing as advantages its relative simplicity, the likelihood it will be better understood, and the ease of collecting it through the National Insurance Board’s (NIB) existing infrastructure.

• See today’s Tribune Business for the full story.

Comments

MarkTa says...

A payroll tax would only work if the minimum wage was increased. The minimum wage for 40 hours is $160.00 and NIB is taken out of that. To add another tax onto that will really hurt the poor people.

Vat will have the same effect in the end but for workers to see the government taking money from them before it even touches their hands will have a stronger negative impact on people in my opinion.

Posted 15 January 2014, 2:32 p.m. Suggest removal

justthefactsplease says...

A payroll/income tax can be structured to protect the most vulnerable among us ... for example, persons who make below a preset salary pay no income tax and then prorate the taxation level as salaries increase ... like this ... below 10,000 pa - no tax; 10,001 to 15,000 - 15%; 15,001 to 20,000 - 16%; 20,001 to 25000 - 17% etc up to a predetermined percentage (say 25%). This will negate the impact of higher percentage increase at areas where the threshold exists I bet it would bring in more money and would be easier and cheaper to administer as we could the existing NIB structure or something similar.

Posted 16 January 2014, 11:16 a.m. Suggest removal

sheeprunner12 says...

WE HAVE ENOUGH TAXES.

WE DONT COLLECT THEM NOW!!!!!!!!!!!!

SAY NO TO VAT..................

SAY NO TO "WELFARE STATE" POLICIES

SAY YES TO BETTER INSTITUTIONAL ENFORCEMENT OF OUR TAX REGIME

IS THIS A PIPE DREAM ?????????????????????????????

Posted 15 January 2014, 4:19 p.m. Suggest removal

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