Businesses upping pressure against VAT

Wed, Feb 5th 2014, 11:34 AM

With the implementation of value-added tax (VAT) just five months away, more businesses are joining the anti-VAT campaign and are petitioning their customers to do the same.
One business owner referred to VAT as "crazy", while another said the implementation of VAT could push poor people "over the edge".
Several business owners have erected posters throughout their stores, highlighting the impact that VAT would have on the price of food, entertainment, shopping, travel, electricity, phone, cable and water.
One such poster features the smiling faces of a family of four. The poster indicates that a family vacation before the implementation of VAT would cost $5,000. The cost after VAT is tagged at $5,750.
Another poster highlights the weekly cost of groceries going from $165 to $182.
The business owners are also asking their customers to sign petitions against VAT.
Many people have signed the petitions featured in JBR Building Supplies store on Wulff Road.
The company's CEO Charles Albury said he hopes the government will reconsider VAT.
Albury said the government has to look at a more comprehensive approach to taxation and should seek to collect the hundreds of millions of dollars in outstanding taxes.
"They are just trying to add more taxes to already taxed out businesses," Albury said.
"And the problem that we have fundamentally is that it's going to hurt the poor people because that's who VAT is going to hit. The government has already admitted it."
With many Bahamians already struggling to make ends meet, Albury maintained that VAT is going to "push them over the edge".
"Everyone realizes that we have to do something, but this is not a fix-all," he said.
"There are a lot of other alternatives."
Faced with revenue challenges, the government intends to implement VAT at a rate of 15 percent on July 1.
VAT is expected to generate an additional $200 million in revenue, according to officials.
But Albury said a simple payroll tax would be a better alternative.
Dionisio D'Aguilar, president of Superwash, is also a part of the coalition against VAT.
"The reason I don't support VAT is simple," D'Aguilar said. "It will cause prices to go up 10 to 15 percent, salaries will remain the same, and most people will get poorer.
"You will be able to purchase less goods with your pay checks."
D'Aguilar said the government must find a more responsible way to raise revenue.
He said VAT will cause "too much of a shock to the economy".
The coalition, of which D'Aguilar and Albury are a part, is calling on Bahamians to "wake up", and demand the government delay VAT.
According to co-chair of the Coalition for Responsible Tax Robert Meyers, it represents about 700 businesses with about 65,000 to 70,000 employees.
The coalition has sent the government several alternative forms of tax.
Up to yesterday, more than 2,200 people had signed the coalition's petition on its website www.wakeupbahamas.com.
Meyers said he hopes for about 30,000 signatures.
Last month, Prime Minister Perry Christie revealed a group of American economists will undertake a final study on VAT to address concerns related to the tax regime.
This is one of several studies the government has commissioned in the last few months.
"So as to clearly demonstrate to all those who are speaking strongly, stridently, emotionally and even sometimes hysterically -- and to address every concern, my government has commissioned a final study by a team of internationally renowned economists," said Christie at the Bahamas Business Outlook at the Melia Nassau Beach Resort.
However, the coalition wants to conduct its own study on the impact VAT would have on the cost of living.
Meyers said previous studies had some "misgivings" in their projections. The coalition has therefore called on the government to provide it with the necessary data to carry out the study.
"The intent of the coalition and the intent of the petition is to demand a delay, to demand the facts, and to demand a look at the alternatives," Meyers said.
"Our primary concern is because of the level of consumer debt and because of the average wage, we are very concerned that it would have a damaging effect on the economy overall," he said.
"And if it slows the economy or puts us back into a recession, the inevitable is that there would be layoffs, cuts, and...if consumers fail then businesses will fail."
Meyers said the coalition will deliver the petition to the government at the end of February or March.
"This is a pivotal issue," he said. "If we don't get it right it could sink us."
Super Value owner Rupert Roberts also has several anti-VAT posters in his stores.
Roberts has been particularly vocal about the issue.
"VAT will kill the economy," he said.
Roberts said the government should consider income tax or some other alternative forms of taxation.
Asked how it will affect his business, he said, "It would hardly affect our business at all.
"We'll survive but we'll have to pass it on to the public. Our government is talking about introducing it in a recession...it's crazy."
The government has steadily spent more than it has collected.
Christie said previously the pace that the country is on is unsustainable.

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