While applauding the government's decision to exempt most breadbasket items under the proposed value-added tax (VAT), a prominent businessman believes proposals for how goods will be labelled under the new regime appear "cumbersome and annoying".
In the 160-page Value Added Tax Bill 2013 and the Value Added Tax Regulations 2013, obtained by The Nassau Guardian earlier this week, it is proposed that retailers will show both the price inclusive and exclusive of VAT on price labels.
They may also be required to identify which goods are exempted from tax - such as breadbasket, price-controlled items - or which attract VAT, by the use of color coding on labels.
The draft legislation states: "A (VAT) registrant offering goods for retail sale must show the price on the goods exclusive of VAT and, where VAT is charged on such goods, show the amount of VAT charged on a VAT sales receipt or VAT invoice issued to the purchaser.
"The VAT commissioner may approve methods of identification by a registrant of taxable goods using color coding price tickets for taxable, zero-rated, special-rated, exempt and other supplies or asterisking taxable supplies and provide a clear explanation of the method used, displayed prominently at such places as are necessary to enable customers to identify, before they enter into a transaction, whether VAT has been included in the price of the goods."
But Dionisio D'Aguilar, chairman of AML Foods, which owns food retailers Solomon's Fresh Market and Solomon's Supercenter, called the move "very old fashioned and unnecessary".
He said it seems that the government is trying to operate VAT similar to a sales tax and that can't work.
"I believe that shopkeepers should be able to display it however they want to display it. I think that's unnecessary meddling in the day-to-day operations of their stores and I don't think it really makes a difference to the consumer," he told Guardian Business.
"It's very old fashioned the way that we do things here, putting the price on every good. Most stores have a price display but the price is not on every item. This insistence to display everything is quite annoying and is really not necessary. Doing that is going to be incredibly cumbersome.
"In most places in the world where VAT is charged, it's included in the price. If the price of an item is $15, then the VAT charged is included in that price."
"They want VAT, but they want to run it like a sales tax. And in countries where you have a VAT, it's included in the price and it's simpler for people to manage it that way."
Exempt products
And it came as no surprise when the VAT bill outlined that a variety of breadbasket items and many basic food items will be exempt.
"A lot of those items are price controlled anyway and we don't make much money on them because they are price controlled. In fact, I think we sell them at a loss. That part of the proposed bill, it's good to see that they have lived up to that promise," D'Aguilar pointed out.
"We were always under the impression that the government would exempt a lot of the breadbasket items and that seems to have come to fruition. So as a chairman of AML Foods, we're glad to see there's not going to be additional costs, at least not from those items."
Super Value owner Rupert Roberts had expressed concern, saying that VAT's implementation would result in a five percent increase in the cost of operations. He added that customers would feel the brunt of that increase.

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