A week before the first reports are due for collection of the value-added tax (VAT), the Ministry of Finance has announced the formation of a VAT Appeal Commission, populated by a retired Supreme Court justice as chairman, a retired senior customs officer, a public accountant, and others, all to be named this week.

As the new tax takes hold, reports continue to surface of businesses engaging in practices that are at variance with the VAT laws and regulations. In some cases, fraud or intentional malfeasance may be suggested. And in fact, just prior to announcing the formation of the commission, the ministry issued a warning to consumers about businesses displaying counterfeit certificates on their premises, advising that guilty parties could face fines of up to $50,000.

The release also advised that tax identification number (TIN) certificates issued by the VAT Department have the Bahamas Coat of Arms watermark while VAT certificates have a VAT Bahamas watermark. Merchants with TIN certificates cannot charge VAT, while merchants with VAT certificates are permitted to charge and collect the tax.

The VAT Appeal Commission will operate independently of the VAT Department and the Ministry of Finance, according to the release.

"If a VAT registrant is unhappy with any decision made by the VAT comptroller, they may lodge an appeal with the commission. An appellant who is aggrieved by a decision of the commission may appeal the decision, but on matters of law only, to the Supreme Court," the Ministry of Finance said. "The timing of the appointment of the commission is critical at this juncture, as enforcement activities and rulings of the VAT Department become more entrenched."

The appointments are with effect from January 21, 2015.

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