Despite the government officially releasing the draft bill and regulations that would govern the proposed value-added tax (VAT), stakeholders in the accounting industry are still anxiously waiting for the new tariff schedule to be released.
Until that is released, President of the Bahamas Institute of Chartered Accountants (BICA) Jasmine Davis said they are left to review concepts. She is calling the schedule a "key piece to the puzzle" for accountants.
"We have had calls from clients and the general public, asking if it is going to be released soon so that businesses can go ahead and do their budget forecasts," she explained yesterday.
"Of interest to everyone is the new schedule that would be released as a result of The Bahamas' accession to the World Trade Organization (WTO), where it is that the tariffs and the customs duties are going to be decreased and what the taxes are going to be on top of that. So without that schedule, we're really just looking at concepts per say."
During a luncheon at Luciano's of Chicago restaurant on Tuesday, BICA unveiled its VAT committee. While Davis maintains that the July 1, 2014 launch date for VAT is doable, she admits that it's very ambitious.
"There are still a lot of questions that need to be answered. The Ministry of Finance has about six months to educate the public and iron out all of the kinks," Davis pointed out.
"In the VAT legislation, we have looked at the accounting and penalty aspects of it. We have also looked at compliance and reporting, but we haven't really had an opportunity to benchmark it against other jurisdictions. We're going to be utilizing the resources available to us through the regional tax committee of the Institute of Chartered Accountants of the Caribbean, of which I am the vice president. We will able to report from there."
As a result of VAT, Davis said she has seen the evolution of the need for a tax specialist in this jurisdiction.
For Raymond Winder, managing partner at Deloitte and Touche, his main concern when it comes to VAT is the impact the tax will have on consumers.
"Hopefully there will be sufficient exemptions and those individuals that are on the bottom end will not feel the impact of the increase that is due to VAT," he said.
"We are going to have price controls to ensure that those in society who are at a lower level will not feel the increase of prices. The overall impact (on price levels) could be something like five percent, depending on what rate they want to peg VAT at."
The government plans to implement VAT at a rate of 15 percent, and 10 per cent for hotels and food and beverages sold in hotels, on July 1, 2014.
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