Value-Added Tax (VAT) Education Task Force member and Fidelity Bank President Gregory Bethel yesterday urged businesses to avoid "side deals" after reports that some businesses may plan on paying lump sums in order to avoid costly VAT preparations.
Business persons have reportedly tried to sidestep the exorbitant administrative costs associated with VAT compliance and implementation by offering to pay the government lump sums.
Speaking with Guardian Business, Bethel was blunt.
"Follow the act and follow the regulations. Forget about making side deals. Comply with the law," he stated.
Edison Sumner, task force co-chair, further urged full compliance while stating that the current timeline for VAT registration is still feasible.
Sumner, who is also the CEO of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), suggested last week that the number of registrants could significantly exceed the government's earlier estimates of 4,500 VAT-eligible businesses in the country.
"We are obviously making a very aggressive push for the registration deadline. I think that the timeline is still a reasonable timeline to get things done. The number of registrants, I think, is likely to exceed the amount of businesses that are registered on the business license register," said Sumner.
He encouraged service providers, including physicians and attorneys, to apply for VAT registration.
"Even though the numbers will likely balloon, I think the plans that are in place will certainly get most of them caught in the net and registered by that time. There will undoubtedly be companies and others who may not get registered by that deadline. Those who may have missed that deadline, they are likely to face some very stiff penalties from the government," he said.
Neither Sumner nor Bethel could provide updated successful registration numbers since the Ministry of Finance launched its online VAT registration platform on October 13.
The task force members added that they were also unclear as to the specific penalties incurred for businesses or service providers missing the November deadline.
VAT will be implemented at a rate of 7.5 percent effective January 1, 2015.
Some of the country's largest retailers, including grocers, hardware stores and automotive dealerships, have criticized the government's insistence that businesses provide VAT-inclusive pricing on all items by January 1.
The Bahamas Federation of Retailers (BFR) issued a press statement last week urging the government to allow retailers to charge VAT at the register rather than factoring VAT into the sticker price of retail items.
The BFR denounced the "massive administrative cost" of repricing and relabeling millions of items across the country's retail stores and other businesses.
Speaking with Guardian Business earlier this week, Financial Secretary John Rolle said that the government's commitment to inclusive pricing remains "firm".
Rolle addressed the pricing concerns earlier this month, stating that the government would allow some leniency when it comes to providing VAT-inclusive pricing.
A statement from the Ministry of Finance revealed that some retailers would have until the end of February 2015 to meet the government's VAT pricing requirements.
However, the task force members stressed the threat of looming penalties for businesses failing to meet the registration deadline.
"I urge businesses to register by November 30. Notwithstanding that you have issues or may be upset about any number of things. It's the law. Register and move forward," CEO Bethel said.
"Don't anticipate that this will go away and disappear over night -- it won't."

Click here to read more at The Nassau Guardian