NASSAU, The Bahamas -- Educating the consumer about the benefits of the new Value Added Tax legislation should ease the publics fear of the Governments needs to control its spending. Financial Secretary, John Rolle, led the discussion on the new legislation at a July 25, Ministry of Finance Meet the Press presentation at the Gladstone Road Freight Terminal. Mr. Rolle explained that VAT is a broad based consumption tax, applying a 7.5 percent rate in the price of most purchased goods and services. He said the tax would be collected by businesses and passed along to the Government to provide a stable source of revenue and support the broader strategy to reduce the Governments debt burden. FS Rolle said less debt would free up more resources to spend on basic services such as police protection, education, medical facilities and social services. Some services like school fees, residential rent, land purchases, home sales, interest payments on loans, and life insurance, for example, will be VAT-exempt. The impact on the cost of living is estimated at less than five percent, said FS Rolle. At the cash register, the VAT is the same as a sales tax. However, there are differences that make it less risky for the government to collect. The extra security for the government is that it is collected in stages, whenever businesses make purchases or sales. After the final sale, businesses pass the tax on to the government, after claiming credits for VAT paid earlier. With sales taxes consumers may be charged even higher prices instead so that businesses can recover these same charges. The Ministry of Finance wants the public to know the Government of The Bahamas introduced VAT to apply on goods and services imported into The Bahamas to be purchased locally. It will be implemented under the responsibility of the Ministry of Finances VAT Department and handed over to Central Revenue Administration (CRA), which will centralise collection of several other important domestic taxes including Business Licence and Real Property Tax.
Posted on: Wed, 30 Jul 2014 22:49:23 +0000
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