Antigua and Barbuda's Ambassador to CARICOM Dr. Clarence Henry said yesterday the impact of value-added tax (VAT) in The Bahamas could be limited if introduced and offset properly.
"If properly introduced and offset with consultation from all stakeholders the impact could be less significant," Henry told The Nassau Guardian at the Third Caribbean Conference on International Financial Services at the British Colonial Hilton.
"Right now most of the countries in the CARICOM have adopted it and studies have been undertaken to show and justify its relevance at this time.
"And so, it would not run against the current in other jurisdictions. In fact, it would follow policy perspectives being taken by other member states."
He added, "At the end of the day whatever policy decision the government takes it is in the best interest of the nation and the people of The Bahamas."
Henry said there will always be "push back, and pessimism" to anything different from the norm.
However, he said if and when VAT is implemented in The Bahamas people will eventually get accustomed to the new tax.
When asked about the impact of value-added tax on Antigua and Barbuda, Henry said, "It has not really had a negative impact at all."
The Antigua and Barbuda Sales Tax (ABST) is modeled on the VAT-type consumption tax, according to its government's website.
ABST was introduced at a rate of 15 percent almost a decade ago on a range of goods and services, replacing consumption tax.
Services exempt from ABST include, but are not limited to, breadbasket items, medical services and educational services.
The basic charges for water and electricity are also not subject to ABST.
"There was a sort of push back from several stakeholders at the start," Henry said.
"There are some who thought it would have had a significant negative impact. That has not materialized.
"...Anything that is new tends to have a sort of a mixed reaction from stakeholders making up the population.
"But once the measure is thoroughly explained and efforts are made to bring on board the different stakeholders in a consultative process, I think that can only go well for democracy and of course the governance of a country.
"And I am sure it must have been done here in The Bahamas."
In recent months the government's public education campaign on VAT has received some criticism for not reaching the grassroots people, particularly on the Family Islands.
Prime Minister Perry Christie said recently the government will introduce VAT at a lower rate than the 15 percent previously announced.
Financial Services Minister Ryan Pinder said yesterday the government is still working to determine the introductory rate.
The government's considerations will be influenced by the Coalition for Responsible Taxation, which is conducting a study on VAT and other tax alternatives.
The coalition is expected to present an alternative that could be implemented by July 1, the government's target date for VAT.
However, Christie, who has said he can still be persuaded by the private sector to introduce an alternative if it proves to be viable, has hinted there might be a delay.

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