There is no incentive to spend money in this country. Goods and services are generally super expensive and sub par.

**“I wonder if people were doing cash business and not invoicing, or if people had stopped buying locally to buy more from Amazon and things like that? People buying online would indicate an increase in Customs collections. There’s any number of issues that impact that.”**

Is Rick Lowe suggesting that there is a sizeable increase in the black/informal/underground economy of The Bahamas???????

If that is the case, it will only get worst as the inflation rate and cost of living for the lower and middle class Bahamians continue to rise as compared to wage increases. The Covid19 and supply chain whammy have tag teamed ordinary Bahamians to make household expenditure explode and disposable income to all but disappear.

The Auditor General dept as professional as they may be, may just be a little bit over their heads to come up with a figure of $2bn Consumption slash because of the rate hike. Mr Gowon Bowe explanations are more creditable. The Gov would do well to let a private sector independent accounting firm do an analysis or many would tend to conclude that this is simply one government trying to make a previous government look bad. Something that happens after every election.

It may sound crazy, but I don't believe that this number is far off the mark. You don't just nearly double your tax rate and expect consumer spending not to be impacted by it. Think about it carefully, to run a basic store in this country, you will have to pay VAT on shipping, duties on the imported goods + VAT, VAT on delivery to your store if you don't have your own transportation, and then you have to mark up your product in addition to compensating for increased VAT on electricity, water, services (call a plumber, electrician, HVAC, attorneys) and so on., Long story short, VAT gets shoved on every thing imaginable, and is ultimately passed on to the consumer. As the euphemism goes, feces flows downhill.

Remember those dreams about WTO accession and dropping duties in exchange for VAT? Remember Minnis saying that duty rates were going to be lowered following it being raised to 12% (despite promises otherwise), and then having the rates for washing machines lowered (wonder who owns laundromats here) while most other items remained the same? This guy remembers very clearly.

I wish to God that we could get a group of politicians that could understand that you can't get blood out of a stone. Robbing Peter to pay Paul doesn't work, and most Bahamians soon won't have anything left to rob at this rate. There is no way to tax ourselves out of this mess, we have no choice but to stop pissing away money or become Jamaica 2.0.

Frustrated ....I guess we can say to you "He who feles it Knows it" I still think the auditor general conclusion is simply to justify the vat increase on bread basket items. He is showing his true political colors.

Why would a business care about the increase in VAT.

YOU GET THE MONEY BACK.

You do not even have to wait. If you pay the plumber VAT 100, you might collect the same from your customers this afternoon.

The prices would be more reasonable if the goods were marked up excluding VAT.
Then, the local merchants might compete with amazon.

As it is, even paying the high courier charges, one can beat the retail price.

Try car parts , for example.

I don't know a single person that has ever gotten VAT credits. The government only takes but does not give.

Just coming back to your comment, because I think that the car example can be used to show the point that I was trying to make.

Firstly, most car parts are extraordinarily expensive/take a long time to ship because they are Japanese or Korean in origin. Who knew that shipping half way around the world costs a fortune and takes a long time? This leads to the question of why do Bahamians purchase Japanese and Korean junk vehicles that fold if you lean on them too hard, especially when we live right next door to the US, where you can go to the junkyard or part store and get it same day? Because of the asinine costs involved with getting an American vehicle here.

Go buy a car in the US for 20k, pay shipping fees + VAT, pay 65% duty rate + customs fees + VAT, and then if you are unfortunate enough to live on the Family Islands, shipping + VAT again. You do the math, you have bought yourself another car. Hence why Bahamians buy junk that would never legally be on the roads in the US or Canada.

The Bahamian government still is funded in large part from tariffs. Tariffs are not meant to be funding a government, they are supposed to be used to protect your domestic industries (protectionism), of which we do not have much. You tell me why the COL is so high in this country when we literally import every blessed thing in, and then mark it up + collect VAT the minute it gets to the port.

Bahamians think in terms of paying 12% at the cashier and that is it. The economy is lot bigger than that when you don't produce a single thing in your borders. Most people think in terms of micro and not macro, which is very important as we are completely dependent on other nations for literally every aspect of our economy.

um, you might be missing something. the consumer pays all the vat while the buisness pays zero VAT but collects it. It seems that you are not a very good businessman? the prices at the shelf should only increase 12%. if the business has to increase prices it would only be to cover the cost of salary for accountant. that is all

I think many do not understand the way VAT works. They think of it like duty which is a cost to business.

1.) I was primarily speaking from my position as a consumer. Believe it or not, we buy food, pay for services, and otherwise live in this country as well.

2.) Please let me know where this wormhole is to teleport goods from one side of the world to another. The Bahamas is 100% import based economy that is one of the few to feature double taxation. You are paying VAT (plus duty, which was supposed to disappear) every step of the way to bring something in, not just in getting it off the shelves.

I will tell you what I do.

I go to amazon and look at the price of the item, the shipping weight, the shipping volume and estimate the landed cost by courier, vat, duty, etc...
I slao look at the shipping or delivery time.

Then I go to a local store, or these days, look at the local online stores and compare. If the difference is negligible, I buy locally.

I have noticed that some merchants do not appear to markup on VAT, and those are winners and I usually buy from them.

Businesses which are expanding usually get VAT credits. Like when you purchase new equipment ahead of opening a new venture or while renovating a venue.

bunch of jokers. this entire written piece is all contradiction and hogwash. can we get a real person in the office please?

This doesn't make sense as otherwise the economy would have had a massive decline during this period. Yes there would have been a decrease in consumer spending but not by the amount showing.