A prominent business trainer and consultant has stated that the government needs to "speed up" its value-added tax (VAT) education efforts for small and medium enterprises (SMEs), claiming efforts need to start no later than August if it expects small business owners to comply with the tax by January.
Business trainer and consultant Mark Turnquest described the impending tax as a "necessary evil", given the national debt, but urged the government to quickly establish specific training programs for what he described as the three main branches of SMEs ahead of VAT implementation.
"A concern I have for small businesses is that each small business model, in reference to service, manufacturing and merchandising, is different. We operate in different ways, and the training we need in reference to accounting procedures and how to report to the Central Revenue Agency [is different]. We need to determine exactly how to do that.
"We want to be trained by the government how to submit reports and how to deal with VAT based on the three different areas...instead of one big bulk training for everyone."
Both the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) and Bahamas Institute of Chartered Accountants (BICA) have expressed interest in providing comprehensive VAT training programs for small businesses and professionals leading up to January, but are awaiting the legislation before revealing further details.
The government will implement a VAT at a rate of 7.5 percent effective January 1, 2015. Turnquest insisted that VAT training for SMEs must begin by August to give small businesses owners time to restructure their businesses.
"Small business owners don't mind taking care of paying bills; we just want to be treated fairly and want well defined and well structured [systems]," stated Turnquest.
"We need the government to now start to train. It's taken a little long; there's no schedule of training...but let's face it, we're now only six months away, so we need some clearly defined, appropriate training.
The government has yet to release the proposed VAT legislation and regulations. Such details have been deemed key by organizations such as the Bahamas Institute of Chartered Accountants (BICA) to initiating meaningful education efforts.
Speaking on the implementation of the controversial tax, Turnquest said: "We know that the country is in severe debt, and we know that there are some critical measures in reference to tax reform that need to take place. We don't have a problem paying taxes; we just want information on when VAT is going to go up...so that we can plan properly."
However, Turnquest argued that SMEs should be allotted a three-year period to adjust to the tax: "We cannot adjust our business model as quickly as big businesses, and we have limited resources, so my recommendation is to make sure that the government has a well defined plan how (SME's) are going to deal with the VAT increases".
Turnquest also called for more extensive cuts on government spending to accompany VAT implementation, citing redundancies in civil service as a prime candidate for reform.
"We know that there are a lot of individuals who are not working at all because there's too much duplicate work, and the government is not organizing a performance review to determine people who should be retired honorably."
Turnquest felt that the government required substantial "restructuring to make sure that they run a highly oiled organization," and called on the government to reduce its number of civil servants from 25,000 to 18,000-20,000.
"Without government focus on cutting costs and actually collecting taxes, no other new taxes will be important because we still will be throwing good money down the hole."

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