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Downtown merchants yesterday expressed great concern over the implications of value added tax for the competitiveness of their products, as the Downtown Nassau Partnership revealed that a study has been commissioned to determine the potential impact of VAT on this sector which to a large extent relies on its "duty free" status for profitability.
Guardian Business understands some of the larger retailers may be proposing the creation of a "tourist zone" downtown that would not
be subject to VAT in the hope of avoiding the completiveness-reducing implications of VAT on the products they sell primarily to cruise ship visitors who have the choice of buying in other ports, or back at home.
While recognizing that it is not clear precisely how the sector will be treated under the forthcoming VAT regime, luxury and other duty free retailers downtown yesterday suggested dire consequences for downtown from the imposition of VAT, both on the cost of items sold, and costs to businesses, who will see VAT added to their already costly commercial leases in the downtown area.
At the Perfume Shop, Marsha, who declined to offer her surname, said that she sees the potential for VAT to "absolutely make us less competitive" in the eyes of visitors.
"It's just one more thing that they're going to put on our backs that will affect the downtown area again. If their intention is to destroy downtown this is a good way to go about it."
Noting that buyers are already extremely price conscious, Marsha said she anticipates the potential for VAT to wipe out any edge The Bahamas may have on items such as perfume.
"Right now there's a very small margin between US prices and our prices. They have their iphones in here all the time and if Macy's has something for $82 and I can only offer it for $79, they're not going to buy it to carry it around."
Meanwhile, another downtown merchant who declined to be named, said they also believe VAT would make their jewelry and watches unattractive to purchasers.
"First of all I have to say it's been very unclear what would happen, but if I were to assume 15 percent would be placed on top of prices we have now, I think we would become extremely uncompetitive.
"The reason we are so popular in terms of other cruise ports is that we can claim we are 'duty free', and have no tax like some of our neighbors. We know in Aruba where the tax is extremely low in terms of duty they do tremendously well.
"When you go up in terms of VAT and other taxes we see where it is a challenge, and I know for sure that we would have a challenge. It would adversely impact this business, to say the least."
Gevon Moss, Executive Administrator at the Downtown Nassau Partnership, told Guardian Business that a small group of downtown luxury retailers have come together to commission a study by Deloitte on the potential impact of VAT on their businesses.
"It's going to look at how we effectively work around VAT and 'duty free' and how it will all come together. It will address what has happened in other jurisdictions with duty free products when VAT was implemented," said Moss.
Yesterday one of the major downtown merchants, John Bull, declined to comment on VAT's potential to challenge the sector, as Inga Bowleg, the company's director of business development said not enough was known.
Another major downtown luxury retailer with whom Guardian Business spoke expressed a similar sentiment, adding: "The whole problem is no one knows anything, and businesses want to know."
He went on to note that besides the effect of VAT on competitiveness of luxury goods in the eyes of visitors, concern may also be warranted with respect to the impact of VAT on Bahamian's demand for these items, noting that around "fifty percent" of such retailers' market is Bahamian.
"After you go to your hairdresser in nine months and they tack 15 percent, and you go somewhere else and they tack on 15 percent, are you going to have a bit of change in your wallet to go and buy another pair of shoes? We depend on local customers too."
Scalp psoriasis and Seborrheic dermatitis of the scalp remain relatively uncommon around the world. However, in recent years, there appears to be some increase in Seborrheic dermatitis cases in The Bahamas, according to specialist dermatologist Dr. Herbert Olander.
Scalp psoriasis can cause red patches to form on the skin; white scales to attach to the hair shaft; patchy scaling or thick crusting of the scalp that may bleed when removed; itching or soreness and patches that may extend beyond the hairline.
Seborrheic dermatitis of the scalp can cause itching in severe cases; yellow or white scales to form and attach to the hair shaft; red, oily skin covered with greasy white or yellow scales and patches that are usually confined to the hairline.
Olander, a specialist dermatologist at St Luke's Diagnostic Centre on Collins Avenue, said patients who display signs of psoriasis on the scalp tend to have symptoms of the disease elsewhere on their bodies, such as the elbows and knees.
Though both men and women are prone to both scalp psoriasis and Seborrheic dermatitis, Olander said St. Luke's mostly treats women when it comes to Seborrheic dermatitis.
"People tend to get the Seborrheic dermatitis, particularly women, quite frequently, simply because of the fact that they don't wash their hair frequently enough," he said.
"There is a tendency not to wash their hair frequently because of the fact that you have now permed the hair, and you do not wish to more or less cause the perm to wear off quickly.
"You tend to wash your hair once every three or four weeks and you would eventually end up with Seborrheic dermatitis, heavy dandruff and scaling of the scalp.
"That is common too because woman tend to put their hair in these styles, including gluing their hair to their scalps and therefore you cannot treat or clean the scalp."
Seborrheic dermatitis does not affect your overall health and is not contagious, though, as Olander pointed out, it can be embarrassing and, if left untreated, become quite severe.
In some cases, hair loss can occur when the disease becomes severe or the abuse of the scalp is extensive.
According to the European Academy of Dermatology and Venereology Journal compilation of 2009, the estimated population prevalence of psoriasis in Western Europe is two percent - and up to 80 percent of patients with psoriasis report some degree of scalp involvement.
According to the National Institutes of Health, as many as 7.5 million Americans have psoriasis.
A brush with scalp psoriasis
Just a couple of months back, Sam Davis (named changed) said she noticed her forehead, especially around her hairline, becoming increasingly dry.
Despite attempts to moisturize and use grease, the condition became worse; and after several weeks her skin around her hairline began to discolor and scale.
Upon scratching, the skin would flake, Davis said, adding that there was not much itching but the skin was quite irritated.
Friends and family assured her the symptoms were the result of dry skin, and it was not until some dry scaled patches appeared around her face that Davis decided to visit a specialist.
Her diagnosis was scalp psoriasis.
"Everyone told me it was dandruff in my family, and I kept saying I don't have dandruff, I have never had dandruff, so I don't understand why would I have dandruff now," Davis said.
"The reason why I checked into it is because I originally thought it was dry scalp. I went to the hairdresser, and I was told to maybe use this, and use that, but it didn't work, and I kept self-medicating.
"The only reason I paid attention to it is because one of my friends had similar symptoms and her whole forehead was basically white and flaky, but I guess she had dermatitis.
"I said, maybe I have that. She told me it was because she really doesn't wash her hair a lot. Her hair is natural and she puts it in braids and stuff like that.
"I said maybe I have something different because I wash my hair all the time."
Noting that her condition was not severe, Davis said she was placed on a three-tiered treatment program, inclusive of a shampoo, cream and prescription medication.
Davis said some people referred to her scaled forehead as "growing dandruff", leading her to believe that many Bahamians with the condition go untreated or they self-medicate unsuccessfully.
"When I combined my dry skin treatment and my perm, I ended up burning my forehead," she said.
"It was not that serious but it was a little red, and it hurt a good bit."
Asked if there was a concern about a recurrence, Davis said she was advised that it could persist in years to come, but it can be contained with treatments.
Scalp psoriasis and Seborrheic dermatitis solutions
"You should shampoo your hair at least once a week, and if you can shampoo more than once a week, that is good," Olander said.
No special blood tests or diagnostic tools exist to diagnose psoriasis, but a dermatologist or other healthcare provider can diagnose psoriasis from the signs and symptoms by examining the entire skin surface.
A skin biopsy can also be taken and examined under the microscope to help differentiate between psoriasis and other disorders.
According to the World Health Organization, topical treatments, medications applied to the skin, are usually the first line of defense in treatment, slowing down or normalizing excessive cell reproduction and reducing psoriasis inflammation.
Steroids, being the most common treatment for psoriasis, are referred to as anti-inflammatory because they reduce the swelling and redness of lesions.
However, anthralin, synthetic vitamin D3 and vitamin A are also used in prescription topical treatments to control psoriasis lesions, according to WHO.
More moderate or severe psoriasis can be treated with prescribed drugs that work throughout the body, WHO says.
This route is the next step when patients do not respond or are unable to take topical medications.
Olander said in moderate cases, shampoos with tar components and salicylic acid work well, although those shampoos can be challenging to find.
The National Institutes of Health says sometimes scalp psoriasis will clear on its own, or it can remain on the scalp for long periods.
Scalp psoriasis can get worse if the scalp becomes infected with bacteria or yeast.
If crusting of the scalp along with scaling occurs and the lymph nodes in the neck become enlarged, antimicrobial treatment may be prescribed.
Barber Shops,Beauty Salons
- Tyler Street & Boyd Opposite Polemus Drug Store
- Nassau / Paradise Island, Bahamas
The legislation and regulations the government drafted to guide its value-added tax (VAT) regime when it takes effect next July would tax over 80 different professions, cable bills and phone bills for all consumers, and electricity and water bills for businesses.
The Value Added Tax Bill 2013, and the Value Added Tax Regulations 2013, obtained by The Nassau Guardian, propose a flat tax rate of 15 percent on a long list of professional services, utilities and imported goods.
Financial services carried out for a specific fee, many financial transactions and insurance transactions and premiums, except for health and life insurance, will also be subject to VAT.
As has been widely reported, hotel rooms and food and beverage transactions would be taxed at a rate of 10 percent.
Condominiums that are part of a hotel complex, even if they're part of a rental pool, would be taxed as well.
However, some services and goods will be exempt from the new tax.
A variety of breadbasket items, educational institutions, daycare, after school, retirement, medical, and disabled facilities, religious institutions, charitable organizations and the sale or rental of a dwelling not part of a hotel complex would be exempt.
Games of chance, gambling and lotteries would also be exempt.
While the government has drafted over 160 pages of legislation and regulations, there are still a few things that have yet to be set in stone.
For example, the regulations propose a threshold for VAT being applied to electricity and water bills for commercial consumers.
This means that if a business consumes less than a certain amount of electricity per month to be determined by the government, it would pay no VAT; everything exceeding that as yet undetermined level would be subject to VAT.
The same is being proposed for businesses that consume public water.
While the draft legislation does not propose to impose VAT on these services for residential consumers, The Guardian understands that the prime minister will soon decide whether this will change, bearing in mind his party's pledge to lower the cost of electricity.
The government has also not decided on what the threshold will be for professional services to become VAT registrants.
The Guardian understands that currently the government is considering $100,000 or $150,000 as the threshold at which VAT will apply to those services.
The legislation also exempts professional services that are conducted for people who are not in The Bahamas in many instances.
Domestic transportation by land or water, other than in connection with a tour, would also be exempt.
VAT registrants who will be required to impose the new tax on retail transactions will be those businesses whose revenue exceeds $100,000 per year.
The VAT legislation and regulations are quite detailed and complex, but there are many areas that are quite straightforward.
What will you pay more for?
Expect financial transactions to impact your bottom line.
Financial services and transactions are not exempt from VAT if they levy a fee.
This includes, short-term insurance contracts; legal, accounting, record packaging services, and tax agency services, including advisory services; the provision of insurance, other than life or medical insurance; safe custody for money or documents; brokerage services; debt collection or factoring services and trustee services.
Also taxable would be the transmission of money or monetary value in any form; the issuance, sale or redemption of money orders or traveler's checks; check cashing; currency exchange issuance, sale or redemption of money orders and traveler's checks and currency exchange and pay day advances.
Loans to consolidate finances from bank to bank will be subject to VAT if the repayment terms are in installments.
However, financial services provided to a person treated as a non-resident for purposes of the Exchange Control Regulations are exempt.
Accounting and record packaging services rendered to these institutions would also be exempt.
What won't cost more
Many basic food items will be exempt from VAT.
Beef, chicken, pork, sheep meat, horse meat, smoked meat, dried meat, salted meat, sausage, sandwich meat, corned beef and fish will be exempt.
Fresh milk, milk products, concentrated and evaporated milk, cream, cheese, dairy spreads and butter will also be exempt.
VAT will not apply to fresh and frozen vegetables and fruit.
Rice, fonio, quinoa, triticale, flour, cereal, cereal grains, cereal groats (like oat, wheat, barley and rye), meal and pellets will be exempt.
Soybean oil, ground nut oil, olive oil, sesame oil, castor oil, other oils used for cooking and vegetable fats will also be exempt.
Margarine, imitation lard and shortening will be exempt.
Cane sugar, beet sugar and white sugar will be exempt.
VAT will not apply to bread, noodles, couscous, bulger wheat or foods for infant use.
Mustard and mayonnaise, soups and broth will also be exempt.
Mineral water for infant use will have no VAT applied to it.
Laundry detergent, dishwashing liquid, soaps and domestic utility goods will also be exempt.
Licenses issued by the government will be exempt from VAT as well.
Government agencies, ministries, departments, statutory bodies, local government councils, or other government entities that provide services that are usually taxable will be exempt from VAT if the services are of a nominal amount or they are not intended to recover the cost of those goods and services.
The Ministry of Finance will begin a series of intensive VAT workshops for the public starting tomorrow, Financial Secretary John Rolle said recently.
The workshops will come amid criticism over the proposed implementation date and questions about its impact.
The government has said VAT is necessary to bring down the government's massive deficit and get the country's spiraling debt situation under control.
Ministry of Finance officials estimate that VAT can generate about $200 million in annual revenue.Professions subject to VAT under draft bill1. Accountants
10. Athletic Trainers
21. Custodial engineers
22. Custom brokers
23. Dental Assistants
24. Dental Hygienists
32. Financial Analysts
34. Funeral Practitioners
36. Hair Dressers
38. Health Care Providers
39. Home Repair Service Providers
40. Interior Designers
42. Land Sales Developer
43. Landscape Architecture
46. Massage therapists
48. Naturopathic Doctors
49. Nurse Practitioners
51. Nursing Home Administrators
52. Occupational therapists
53. Occupational therapy Assistants
59. Physical Therapists
61. Physicians (MD)
65. Professional fundraisers
66. Professional Planner
70. Radiologic technicians
71. Real Estate Appraisers
72. Real Estate Professionals
73. Respiratory Care Practitioners
76. Social Workers
77. Speech-Language Pathologists
78. Stock Brokers
82. Timeshare Developers
83. Timeshare Sales Agent
84. Transient Sellers
87. Such other professions that the minister may add