Don't mind paying the 12% as the country is in dire financial straights but what I really object to is paying VAT on Tax. Example with air freight imports you pay Customs handling $10, Brokerage fee, Import duty and freight. Then you pay 12% on the total-double taxation. Secondly if an individual is responsible for a substantial financial misdeed they are usually held accountable but we the public are paying all these extra taxes (and there are many more than VAT) to rectify the waste, corruption, and airy fairy spending on lousy expensive often never to be completed projects. Name the persons who put their names to sanctioning these projects etc and make them accountable.

Wonder what the IMF, IADB, EU et al think of the double taxation system in this country? Probably could care less!

I too object to this double taxation! You forgot to mention how the Vat is added at Every point in the transaction when handled by another vendor. So, at the end, you pay on the higher value plus the seller's markup. We cannot afford to live like this!

This was a predictable consequence! Wait until tourist arrivals and spending starts to decrease because people are going to have to pay 15% gratuity and 12% VAT! Who wants to pay 27% for anything WITH mediocre service to boot!

WTO and VAT are causing allot of uncertainty for Bahamian business and uncertainty in the private sector is a bigger job/economy killer than the taxes or policies themselves.

Who’s in charge of the numbers at AML? For a publicly listed company, this article is reckless. It seems like a throw of blame. There are too many mitigating factors in play for AML to make this assessment so soon after VAT implementation has taken place. They may very well see a sales decline because of VAT, but it is too soon to validate that.

[1] what are you comparing the 10% decline to? If you’re comparing it to a rolling weekly trend, then of course you would see a decline since the last few weeks before VAT was implemented there was an increased spending by everyone (whether it was warranted or not). Obviously more folks would spend less the first few weeks after VAT is implemented. Because they’re still stocked up from their last spending rush. You have to consider consumer behavior. So again....10% decline compared to what specific period?

[2] It’s hasn’t even been a full 3 weeks since VAT has been implemented. At least wait until the end of July is complete and compare this month to the same July period of last year. Use the full month since some consumers are paid monthly (which impacts their spending habits)

VAT has had an impact for sure on consumer spending, but we shouldn’t be reckless in sensationalizing its impact. Come On! The reporter should have pressed more on how 10% came to be a reasonable assessment for them to announce.

My guess is there are other reasons why AML is halting expansion...but the VAT increase presents some cover.

Pffffffff.....

You are so correct in your assessment. This is nothing but the blame and should be condemned. July and August usually see declines because quite a bit of persons travel and wait until they go away to stock up. And to suggest that a decline in sales for 2 weeks will scuttle your expansion plans really is a slap in the face of right thinking people.

Actually that's exactly what they said. "It's too soon and it's only been three weeks". They also mention that the exact same thing happened before the 7.5% implementation. I'll put my money on the slump being permanent, prices are outrageous.

One nteresting thing they mention is the same number of transactions but volume is down. So it's not like people have stopped shopping, they're buying less.

This VAT increase is insidious. Food and fuel prices are at the bottom of your pyramid. If they go up, all prices up the chain go up exponentially.

What is really funny is that expect the Tribune, particularly Neil Hartnell to "press more on how 10% came to be a reasonable assessment. Neil is a hack, always has been, and the Tribune is just a tiny notch above The Punch.

Neil needs to take more responsibility in informing the public.

He took exactly the responsibility he needed to. If you decide to just look at the headline, that's on you. Writing headlines is an art, they're designed to be provocative and to make you stop and read the article. In newspapers with bigger budgets, writing headlines is actually someone's full time job.

If you had read the details of the article you would have found

***"Watchorn said the sales peak immediately prior to the 12 percent VAT rate's implementation, as Bahamians stocked up on groceries and other products to beat the increase, MEANT IT WAS HARD TO DETERMINE when - and where - consumer spending will level off or 'bottom out'.***

Watchorn can pray all he likes for the situation to be normalized down the road, but that will not be happening. As the proverbial saying goes, 'blood can't be had from a stone', and the vast majority of Bahamians are tapped out. Bahamians are having to trim their weekly grocery costs and cut back on many other regular expenses previously considered necessary. And this is happening all because of the 60% increase in VAT on everything from groceries, gasoline, electricity (if BPL bill above $200, which is the case for many Bahamians), car insurance, doctors bills, and on and on and on.

The key point here is AML saw. FIFTY PERCENT increase in sales from continuing operations in the weeks prior to the VAT increase. So this is in line with the government’s claim that there was some growth in the economy in recent months. Mostly due to Bah Mar opening and creating new jobs and the tourist sector as a whole showing strong numbers. And so a 10% decline in spending after the increase in VAT should be expected because a portion of consumers disposable income must now towards the VAT increase. And based on Vatchorn’s touting of a 50% growth in sales, this may have been sufficient to cover the government’s shortfall in revenue had they continued to stimulate growth rather than creating doubt, reductions in disposable income by increased taxes and doubt to investors. In the US, over 2 million persons have come off food stamps this year, so far and there are 500 thousand more jobs available than there are workers. This government cannot expect to grow the economy by tightening the purse strings too much And squeezing more tax dollars out of businesses and consumers. There is natural growth happening in the economy, even now, and government must be careful not to stunt that.

This is a prime example of wreckless reporting. If sales increased the weeks prior to VAT implementation, due to the fact that persons wanted to stock up on a large volume of items to offset the increased taxation, common sense would tell you that the weeks subsequent to VAT’s implementation sales would be down because those same persons are utilizing that large volume of items that was purchased prior to VAT increasing.

This is the type of Fake News reporting I expect from Candia Dames and the Guardian, I try to hold the tribune to a higher standard.

Absolutely. Their number are from less than 18 days of sales and probably less if they took time to put them together. That is not representative of anything in business. Wait till they have had a full quarter and then report. This is irresponsible hand waving, only trying to stir up unrest without any actual facts.

**Did you read the article? Everything you point out as irresponsible for Harnell not to point out, is right there**

***"Watchorn said the sales peak immediately prior to the 12 percent VAT rate's implementation, as Bahamians stocked up on groceries and other products to beat the increase, meant it was hard to determine when - and where - consumer spending will level off or 'bottom out'.***

I knew this would hapoen, that's why I slammed Minnis. 7.5% was actually the maximum level our fragile economy can withstand at current sallary levels. I expect Minnis will get less than under the previous 7.5% regime. There only is so much people are willing to pay before they change their spending habits. Now I don't go out to eat. Before the VAT changed I went out all the time. Less is sometimes more.

Pundit, I expected that you would consider the numbers a little more closely and realize that this is some and mirrors. Wait till you can get actual number for a full quarter. This is a non story.

@BahamsPundit.... you’re clearly not thinking critically if you can’t see this is a non story and the tribune is just trying to sell papers. AML foods is operating in a surplus for this period to the fact that they experienced +50% increase in sales the week leading up to the VAT increase.

This is a slow news day and the tribune is trying to sell papers.

The week leading up to VAT was an anomaly and everyone knows it Rupert Roberts already tell y'all it was like a hurricane on June 30th, the people buy everything off the shelf trying to duck 12%

Bahamians can find a way to buy only bread baskets items in the Bahamas and
buy their groceries else where.

Honest Truth My statements don't have much to with AML and more to do with what I see on the streets. AML is just the tip of the iceberg. I anticipate hundreds of companies to see revenue drop by 10% (at least) over the next couple years. Baha Mar occupency is down to 30% occupency apparently. Who's going to come here? In a country in which eating out is the only night entertainment, it's bad business sense to think patrons will pay 27% on top of their bill.

I agree with you on this Pundit.

If you can afford to go out to eat i really doubt the additional 4.5% won't matter If you spend $100.00 before July 1st by your words the meal would have cost you $122.50 after July st $127.00. If that makes that much difference to you then you should not be eating out.

You're using the same Excel formula as Turnquest. Prices don't move linearly like that. For example a friend of mine told me they went out for dinner to a casual restaurant, nothing fancy, the bill for two the week before the VAT increase was $50, the week after the VAT increase it was $72, my calculator tells me that was a 44% increase in the price, not 4.5%. I suspect over time as more businesses realize how much prices have moved they will in turn move their prices higher. Water and sewerage is already asking for a rate increase , the gas dealers asked for permission to go above $5. All of this was predictable and predicted. You see they cover themselves, introduced a gas allowance so they don't feel it. My biweekly grocery bill is up from 180 to 240

Thisisours. That increase had nothing to do with vat. Your friend probably ate something different or he /she was scammed. The numbers don't add up.

NOPE. they went the week before and they ordered the exact same thing. In fact as they described to me they go to this restaurant specifically when they want that one meal. It had everything to do with VAT. I was watching fruit and vegetable prices like a hawk. My favorite apple went from 99c to 1.67 pre VAT. AND I completely agree with you the numbers don't add up, that's why it's called inflation. This is what Johnson and Turnquest forgot to factor in their excel model. "Economics" you do something with the money and the rates, there's an equal and sometimes exponential reaction.

One thing that was very clear in this article "retailer fear". We don't know what's going to happen. When people don't know what's going to happen they buy insurance. A retailers insurance is sometimes higher prices. I understand second home owners are expressing the same fear, "we don't know what's going to happen".

If AML can see fit to declare an extraordinary dividend (as they did) then the increase in sales had to have been more than 'a few weeks. ANd for sure it had to be more than the few weeks between the announcement of the VAT increase and the time it was implemented.

BTW did anyone else see the notices that banks are about to increase their fees again in August? RBC for sure!

no the price hike will not be linear.

Vat itself is not linear, it is a multiplication, so the increase will not be linear.

However, there is a chance that it will be linear for about three months, until new shipments come in, so you could engage in a second round of stocking until September.

I will be watching the base price of the breadbasket items, as i only stocked for one month.

Thanks for the semantic correction. But didn't you understand? The foodstores were hiking prices BEFORE VAT was implemented. I watched it. A box of cereal went up by one dollar, chicken went up 3 dollars. No that's not linear and no need to wait three months to figure that out. The total bill went up 50 dollars

the ground beef price went up even more that that.
in nassau, we get some respite if we wait for the cycle of the so-called 'weekly specials", so one doe not buy chicken at 3.99 a pound, but rather wait until it is 1.99 or 2.19.
Not in abaco, the local organic chicken is verry veyr expensive.

of the stuff i regularly buy, the bananas went up considerably.

there is competition in food stores.

where we really get jooked is in services, the plumber, the electrician, car mechanics and garages, doctors, all charge more to compensate their increased costs.

even in household goods the impact is not too bad, as the cost, inclusive of vat is spread out, a stove or refrigerator lasts years.

as for restaurants. i just cook my own food, cooking gas is oen of the cheapest energies , so i go to youtube and learn whatever recipe i want.