Financial Secretary John Rolle has affirmed the government's commitment to "VAT-inclusive pricing" in the face of concerns voiced by retailers that the administrative costs of converting to this kind of system will be exorbitant and might even drive some of them out of business.
The Bahamas Federation of Retailers (BFR) issued a press statement calling on the government to move forward with a pricing system that allows retailers to charge value-added tax (VAT) at the register at the time of the transaction (VAT-exclusive pricing), rather than a system that requires VAT to be factored into the sticker price (VAT-inclusive pricing).
Rolle, while not responding directly to the BFR release, told Guardian Business that "the position on inclusive pricing is firm".
"The VAT department will allow retailers some leniency during the first two months of 2014 to complete the transition," he said, reiterating the government's most recent stance.
"We understand that there is an administrative effort required, but it would not be to the advantage of the system to justify a reversal in the approach to pricing display because of this. We continue to encourage businesses to use transparent approaches to inform consumers of the price adjustments that are forthcoming, even if businesses are unable to complete the labelling of individual shelved items in the short term."
The BFR charged that the "massive administrative cost" on businesses' of VAT inclusive pricing will necessitate the repricing, relabeling or retagging of millions of items across all of the retail stores and other businesses in The Bahamas.
The federation included comments from a number of unidentified retailers in its statement.
Said one individual identified only as a Bahamian retailer: "We believe that VAT-inclusive pricing would be so much more difficult for businesses like ours to implement, not to mention the additional cost for thousands of labels, printing, labor and time to re-price existing stock. Bahamians are fully aware and comfortable when dealing with sales tax in the U.S., [so] pricing should be VAT-exclusive, and the tax should be added at the time of check out on the sales receipt."
Another business, this one in construction supply, said: "VAT-exclusive pricing will be much easier for the consumer. If a business has to advertise VAT-inclusive prices, it will mean that the consumer will see two prices, one unit price on labels and a different unit price at the register. VAT receipts will show total VAT paid at the bottom and with a standard 7.5 percent VAT rate, it will be easier for customers to calculate their costs and compare prices with VAT-exclusive pricing. VAT-exclusive pricing also makes it easier for businesses to apply discounts and advertise sale prices. It will be a nightmare on businesses to have different VAT-inclusive labels every time they have a sale, especially if different discount rates apply to various items."

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