Tourism industry leaders intend to present a five-point 'smart tax plan' to the government, which will include a recommendation that the government tax web shops as part of efforts to improve its revenue.
Specifically, the plan will call for legislation to "regulate and tax web shop numbers".
The Nassau Guardian confirmed that tourism industry leaders also intend to recommend to the government that it institute a shared payroll tax of five percent -- that is, both employers and employees pay.
"Tourism is the goose that lays the golden egg," said veteran hotelier Robert 'Sandy' Sands, the group's spokesman.
"We protect tourism. We protect every industry in this country."
The measures will be proposed as an alternative to a 15 percent value-added tax (VAT) rate, which the government has said it intends to introduce on July 1.
It is the position of industry leaders that VAT at 15 percent would be harmful.
"Tourism is the lifeblood of the Bahamian economy and tourism leaders in The Bahamas are proposing a smart tax plan that will support, strengthen tourism and raise needed government revenues," Sands said.
"As the Bahamian economy continues its slow climb out of the great recession, our tourism industry once again leads the way.
"Public and private projects have made significant investments in the destination but this progress is being shattered by the government's pending plan to implement a value-added tax at 15 percent, which in its current form threatens to affect the more than 97,000 direct and indirect Bahamian jobs created by a growing Bahamian industry."
Sands said without question, the government needs to cut costs, increase revenues and address the country's national debt.
"We believe that our plan will stimulate the economy, not stifle it, as the current VAT proposal does," he told The Nassau Guardian yesterday.
"The government's current value-added tax proposal, we believe, would be damaging to tourism, the lifeblood of the Bahamian economy. The government's current proposal, has failed to position tourism, our most important industry for global competition."
Sands noted that tourism accounts for more than half of Bahamian jobs.
In 2012, the industry represented an aggregate 48.4 percent of GDP through direct and indirect measures.
Sands said the industry has been working with internationally-recognized tax experts and will soon present its alternative five-point plan to the government.
He said the group believes taxing web shops and instituting pay roll tax constitute the best option for The Bahamas at this time.
"These steps, combined with the efficient enforcement, management of government tax regulations would help to reduce the government's budget deficit, address the country's debt burden and support our tourism-driven economy in the longer term," Sands said.
The tourism industry leaders are but one group strongly opposed to a 15 percent VAT.
Prime Minister Perry Christie recently advised that he met with representatives of the Coalition for Responsible Taxation and agreed to give the group all the data it needs from the Ministry of Finance to complete a study on tax reform and produce a proposal on a suitable form of taxation.
The coalition has been pushing for the government to delay VAT's implementation.
The government has said it will introduce VAT at a rate of 15 percent in most cases and 10 percent for the hotel sector.
The government has not yet tabled the final VAT legislation and the accompanying tariff schedule in the House of Assembly.
VAT is expected to generate an additional $200 million in revenue, according to government officials.

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