By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A well-known Family Island resort owner believes there is “no point in crying over spilt milk” on Value-Added Tax (VAT), even though it will impose “onerous” administrative demands on small hotels such as his.

Jeff Birch, whose family have owned the 21-room Small Hope Bay Lodge since its inception in 1960, told Tribune Business he was “a pragmatist” despite the demands the new tax would impose.

Acknowledging that the country’s’ fiscal crisis meant that any government would have introduced a new tax, Mr Birch said Bahamians - both individuals and companies - needed to accept VAT “as long as the Government is patient with us” on compliance.

Agreeing that all businesses and consumers were facing “a big learning curve”, the Small Hope Bay owner/manager likened preparations for VAT to the run-up to the National Insurance Board’s (NIB) introduction in the 1970s.

“It is what it is,” Mr Birch told Tribune Business. “It’s a little bit late now, and there’s nothing we can do about it.

“The Government has introduced a system of VAT, and there’s no point crying about spilt milk.”

He conceded, though, that VAT’s record-keeping and filing demands would impose a heavy burden on small Family Island resorts such as his, as most fell inside the $100,000 annual turnover threshold that triggers mandatory registration.

And Mr Birch pointed out that, unlike businesses in Nassau and Freeport, those located in the Family Islands did not have the same support infrastucture to turn to for advice and help in meeting VAT’s demands.

“From an administrative perspective, it’s going to be really onerous,” he told Tribune Business of VAT. “We’ve got to keep all our records and fill out the form every month, three months or six months, whatever we fall under.

“We’ve got to figure out inputs and outputs, and figure out how we communicate with partners. That’ll be for when we bring things in from offshore [countries] that don’t deal with VAT, and they go through Customs. There’s going to be a whole lot of co-ordination and communication required.”

Mr Birch added: “I just think it’s going to be difficult to keep all the paperwork. It’s going to be a big learning curve, like when NIB first started.....

“I think there’s still a lot of grey areas, which is a bit concerning. It’s a work in progress, but I’m a pragmatist.

“The Government has decided it needs money, and decided to go with VAT. It’s a transition, it’s work in progress.

“I don’t care which government has done it,” the Small Hope manager added. “Either one would have done it, because they need the money, and citizens and corporate citizens need to say that as long as they’re [the Government] patient with us, we’re willing to work with it and adapt.

“VAT was their choice. I’m not going to say whether it was my choice or not. It’s immaterial. It’s a decision by the Government, and we have to figure out what the hell that means.

“That’s why I say it will be onerous initially, as no one knows what they’re doing and what to do.”

Mr Birch praised the Out Island Promotion Board for its efforts to educate members on VAT, and what they needed to do to prepare.

He himself has not been slow to prepare future guests for the likely unexpected increase in their bills and vacation costs post-January 1, 2015.

Mr Birch, in a message sent to Small Hope’s clients warned: “We need you to plan now a 7.5 per cent increase in your bill for the VAT.

“This is a tax that is basically on everything you pay for. So, it is a tax that will come at the bottom of your bill.

“The tax is nationwide. Although we wish it never happened, we are positive and hopeful it will help our nation to do well. If the nation does well, we do well. If we do well, we take care of you as family, as we have been doing for 54 years now. Please plan it in and come back.”