When the time comes to pay gaming license fees, required capital contributions, compliance costs, audits, Gaming Board up front investigation costs, regularization of cross boarder copy right laws and and payment of back gaming taxes you will find that few will qualify or have the ready cash for licenses.
The question is will the administration have the moral authority to close down to close down the unlicensed houses seeing that the business is virtual in nature. The iconic "Numbers Man" will be back on the street, this time booking orders on his smat phone.
If only $152m of $735m of loans are OK then there is a gap of approx $600m. With Resolve Bahamas only taking $100m of BoB's books then that leaves a gap of $500m!
Someone needs to take a forward look at BoB's capital base to determine if the Bahamian public may need to inject further capital into the bank to secure depositors. National insurance can't do it alone as these monies are need for pension payments.
John are you sure VAT will be automatically pulled from your bank account by the government once your VAT returns are filed? That would be devastating.
I think you may have a point. Why else would they want such detailed banking information just to register for VAT?
I think businesses maybe too afraid to register due to the extremely intrusive level of banking information required. As I understand it the information required to register includes:
"Banking Information: Bank Name, Branch Location, Account Number, Account Type, and Credit Reference Letter.
Tax registrations in the US, Canada and the UK don't require banking details...hmm. Having reference to a leading businessman's unfortunate customs valuation "error" and subsequent leak and his related resignation as head of a leading trade organization, I hope that the bank information is kept strictly confidential. Especially for those that "protest too loudly".
Coupled with the accounting impossibility of implementing VAT inclusive inventory pricing and the level of theft levels against business the fear levels must be unbearable.
VAT will not work as you can't tax the national debt away nor can you cut government spending to the extent needed to reduce the debt. See storey below on Barbados. Barbados implemented VAT in 1997 at 15% and in the face of mounting debt increased it to 17.5% in 2010 and last year in a desperate attempt to stop the debt growth they cut the civil service by 3,000 persons. Now they are at the brink of default and are in need of an IMF bailout.
VAT will lead to lower business and consumer demand, lower government taxes, a slower economy, higher unemployment rates and growth in the unrecorded economy. As I chat casually to businesses they are considering cutting staff and outsourcing functions to make up for the VAT tax and to obtain VAT input credits.
Many small businesses are marginally unprofitable and don't even know how to keep financial records. What are they to do? The level of financial illiteracy is too high for VAT.
Economic growth will only occur through trade liberalization, privatization (not government partnerships), decentralization, laissez faire economics, education, healthcare and rehabilitation/opportunities for our people. However this is impossible to implement as there are too many special socio-economic-political interest benefiting from the status quo.
1.VAT registration is frightening as you are required to disclose your bank account numbers.
2. It is physically impossible for businesses collectively to change over a billion items of inventory to VAT Inclusive pricing.
3. Invoice software will also need to be amended to generate VATable invoices which show VAT Exclusive pricing for businesses wishing to recover VAT on inputs.
4. If we are challenged collecting centrally administered customs duties and real property taxes how on earth will we get a good compliance rate with 8,000 business collection points?
5. No country that has recently implemented VAT has been able to reduce government spending or debt. Look at Barbados, in 2010 they increased VAT to 17.5% and last year they cut the civil service by 3,000 people. Now they are in need of an IMF bailout.
6. Administration PPP (Public Private Partnerships) economic strategies will not provide growth. Look at Venezuela, Argentina and Equador for numerous examples of failed PPPs. Venezuela has the largest oil reserves in the world yet the county is teetering on default.
But all of this is irrelevant to the political-economic-social directorate (which crosses all political affiliations) as they are at the apex of the economic pyramid and benefit from the current economic system.
The oil cartel ownership structure with its deep business, political and financial connections will ensure that the residents of this polluted area will not be relocated regardless of any cancer cases or the results of any environmental studies.
This would never occur in a developed country as there are environmental laws to protect citizens.
Please see article below on Barbados. They recently implemented VAT and it didn't bring down the debt. The extra money from VAT can go to help the newly created poor.
We have a safety net. We can go to IMF for a loan if our debt gets up to 100% of GDP.
Barbados Seen Needing IMF Help Amid No Growth, High Debt 2014-10-14 14:06:47.684 GMT
By Aleem Khan Oct. 14 (Bloomberg) -- Barbados business leaders and economists say the Caribbean island should seek an accord with the International Monetary Fund as the government struggles to spur an economy with one of the world’s heaviest debt burdens. Efforts by the government to trim the public sector by firing 3,000 workers and reining in spending failed to spark growth in the first half of the year in a country with a debt load equal to 96 percent of gross domestic product. That prompted the Barbados Chamber of Commerce to say the government should consider talks with the IMF.
Excellent points John and well researched. However, the administration can't reduce expenditure as there are so many poor people that need jobs, money, healthcare and education. The administration can't increase transparency (e.g. BEC sale and how they tried to sell BTC during their last administration) for obvious reasons. It can't repay the nation debt because it is too big. It can't stop the waste and leakage for obvious reasons again.
We are still investment grade so we can continue to borrow at good rates. So the debt must and can keep growing. I think we will be OK through 2020. After that hopefully the oil revenues will kick in and we can pay off the debt altogether.
observer2 says...
Don't forget that an educated work force may reduce the numbers business.
On COB warns students of VAT on tuition
Posted 24 November 2014, 4:26 p.m. Suggest removal
observer2 says...
When the time comes to pay gaming license fees, required capital contributions, compliance costs, audits, Gaming Board up front investigation costs, regularization of cross boarder copy right laws and and payment of back gaming taxes you will find that few will qualify or have the ready cash for licenses.
The question is will the administration have the moral authority to close down to close down the unlicensed houses seeing that the business is virtual in nature. The iconic "Numbers Man" will be back on the street, this time booking orders on his smat phone.
On Web shop competition to spur bank lay-offs
Posted 14 November 2014, 12:51 p.m. Suggest removal
observer2 says...
If only $152m of $735m of loans are OK then there is a gap of approx $600m. With Resolve Bahamas only taking $100m of BoB's books then that leaves a gap of $500m!
Someone needs to take a forward look at BoB's capital base to determine if the Bahamian public may need to inject further capital into the bank to secure depositors. National insurance can't do it alone as these monies are need for pension payments.
BoB risk is bringing drip feed to the public.
On $100 million rescue plan for ailing BOB
Posted 3 November 2014, 8:39 a.m. Suggest removal
observer2 says...
John are you sure VAT will be automatically pulled from your bank account by the government once your VAT returns are filed? That would be devastating.
I think you may have a point. Why else would they want such detailed banking information just to register for VAT?
On Less than 10% of businesses register for VAT
Posted 1 November 2014, 1:04 p.m. Suggest removal
observer2 says...
Good point Oracle. I guess businesses who have the ability will get their money out before they give the government their bank account info.
On Less than 10% of businesses register for VAT
Posted 1 November 2014, 12:59 p.m. Suggest removal
observer2 says...
I think businesses maybe too afraid to register due to the extremely intrusive level of banking information required. As I understand it the information required to register includes:
"Banking Information: Bank Name, Branch Location, Account Number, Account Type, and Credit Reference Letter.
Tax registrations in the US, Canada and the UK don't require banking details...hmm. Having reference to a leading businessman's unfortunate customs valuation "error" and subsequent leak and his related resignation as head of a leading trade organization, I hope that the bank information is kept strictly confidential. Especially for those that "protest too loudly".
Coupled with the accounting impossibility of implementing VAT inclusive inventory pricing and the level of theft levels against business the fear levels must be unbearable.
VAT will not work as you can't tax the national debt away nor can you cut government spending to the extent needed to reduce the debt. See storey below on Barbados. Barbados implemented VAT in 1997 at 15% and in the face of mounting debt increased it to 17.5% in 2010 and last year in a desperate attempt to stop the debt growth they cut the civil service by 3,000 persons. Now they are at the brink of default and are in need of an IMF bailout.
http://www.bloomberg.com/news/2014-10-1…
VAT will lead to lower business and consumer demand, lower government taxes, a slower economy, higher unemployment rates and growth in the unrecorded economy. As I chat casually to businesses they are considering cutting staff and outsourcing functions to make up for the VAT tax and to obtain VAT input credits.
Many small businesses are marginally unprofitable and don't even know how to keep financial records. What are they to do? The level of financial illiteracy is too high for VAT.
Economic growth will only occur through trade liberalization, privatization (not government partnerships), decentralization, laissez faire economics, education, healthcare and rehabilitation/opportunities for our people. However this is impossible to implement as there are too many special socio-economic-political interest benefiting from the status quo.
On Less than 10% of businesses register for VAT
Posted 31 October 2014, 1:23 p.m. Suggest removal
observer2 says...
1.VAT registration is frightening as you are required to disclose your bank account numbers.
2. It is physically impossible for businesses collectively to change over a billion items of inventory to VAT Inclusive pricing.
3. Invoice software will also need to be amended to generate VATable invoices which show VAT Exclusive pricing for businesses wishing to recover VAT on inputs.
4. If we are challenged collecting centrally administered customs duties and real property taxes how on earth will we get a good compliance rate with 8,000 business collection points?
5. No country that has recently implemented VAT has been able to reduce government spending or debt. Look at Barbados, in 2010 they increased VAT to 17.5% and last year they cut the civil service by 3,000 people. Now they are in need of an IMF bailout.
http://www.bloomberg.com/news/2014-10-1…
6. Administration PPP (Public Private Partnerships) economic strategies will not provide growth. Look at Venezuela, Argentina and Equador for numerous examples of failed PPPs. Venezuela has the largest oil reserves in the world yet the county is teetering on default.
But all of this is irrelevant to the political-economic-social directorate (which crosses all political affiliations) as they are at the apex of the economic pyramid and benefit from the current economic system.
On Government to miss VAT registration goal
Posted 26 October 2014, 8:23 a.m. Suggest removal
observer2 says...
I agree, nothing will happen.
The oil cartel ownership structure with its deep business, political and financial connections will ensure that the residents of this polluted area will not be relocated regardless of any cancer cases or the results of any environmental studies.
This would never occur in a developed country as there are environmental laws to protect citizens.
On Health concerns of residents still unanswered
Posted 20 October 2014, 1:59 p.m. Suggest removal
observer2 says...
Hi John
Please see article below on Barbados. They recently implemented VAT and it didn't bring down the debt. The extra money from VAT can go to help the newly created poor.
We have a safety net. We can go to IMF for a loan if our debt gets up to 100% of GDP.
Barbados Seen Needing IMF Help Amid No Growth, High Debt
2014-10-14 14:06:47.684 GMT
By Aleem Khan
Oct. 14 (Bloomberg) -- Barbados business leaders and
economists say the Caribbean island should seek an accord with
the International Monetary Fund as the government struggles to
spur an economy with one of the world’s heaviest debt burdens.
Efforts by the government to trim the public sector by
firing 3,000 workers and reining in spending failed to spark
growth in the first half of the year in a country with a debt
load equal to 96 percent of gross domestic product. That
prompted the Barbados Chamber of Commerce to say the government
should consider talks with the IMF.
On Bran: Corruption costs Bahamians $200m a year
Posted 14 October 2014, 10:35 a.m. Suggest removal
observer2 says...
Excellent points John and well researched. However, the administration can't reduce expenditure as there are so many poor people that need jobs, money, healthcare and education. The administration can't increase transparency (e.g. BEC sale and how they tried to sell BTC during their last administration) for obvious reasons. It can't repay the nation debt because it is too big. It can't stop the waste and leakage for obvious reasons again.
We are still investment grade so we can continue to borrow at good rates.
So the debt must and can keep growing. I think we will be OK through 2020. After that hopefully the oil revenues will kick in and we can pay off the debt altogether.
On Bran: Corruption costs Bahamians $200m a year
Posted 14 October 2014, 10:18 a.m. Suggest removal