The Coalition for Responsible Taxation has urged the government to reduce the business license fee to 0.5 percent as it represents a "serious disincentive" to investment, gross domestic product (GDP) growth and employment.
While the prime minister made no mention of the business license fee in his budget presentation on Wednesday, a position paper presented to the government by the coalition late last week on tax and fiscal reform made it clear that the private sector is severely challenged by the present rate structure.
The coalition recommended that business license fees should be reduced to 0.5 percent for all VAT registrants and one percent for non-VAT registrants.
"This tax at current levels based on gross sales is a serious disincentive for businesses to reinvest, which serves to slow domestic investments, GDP growth and employment. It is evident that businesses have already commenced retrenching efforts and ceased investments and have been cutting back on employment due to losses sustained from massive business licence fee increases imposed in the last budget cycle. Reducing this tax will indicate that the government is concurrently enacting measures to stimulate business development and the economy, and hence increase confidence among businesses," said the position paper.
In addition, the group called for the Bahamas Chamber of Commerce and Employers Confederation to become the entity responsible for registering businesses, seemingly pointing to the failure to address the web shop industry as among one of the reasons why this would be beneficial.
Specifically, the coalition proposed that the government give "genuine consideration (to) having the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) be responsible for the registration of all businesses in The Bahamas, with precedents set in other jurisdictions. This will have the advantage of removing the government from the unpopular position of closing businesses, despite them operating illegally."
Most of the coalition's recommendations to government in the position paper related to issues of tax and fiscal reform.
Among the key themes: Tax reform must be accompanied by fiscal reform; payroll tax can only provide short-term relief; VAT should be implemented at a lower rate with limited exemptions, and the government should broaden the tax base and increase compliance.
As previously reported by Guardian Business, the report, which was presented subsequent to the release of the findings of the study on VAT and possible alternatives commissioned by the coalition, does not suggest a "hard and fast" VAT rate to government, but simply calls for VAT to be implemented at "the lowest possible rate with proportionate reductions to duty".
"Under these circumstances, the tax has the potential to be broadly accepted and therefore have greater compliance and generate greater revenue than many other inefficient existing taxes such as business license fees, duty or property tax," said the position paper.
The coalition came out against one of its earlier possible tax alternatives - payroll tax - saying it would not facilitate the necessary revenues when the reductions in duty rates are required.
Pointing to VAT at five percent and 7.5 percent, the coalition noted that both have narrow exemptions, which allows the tax to be far simpler to administer and therefore "significantly widens the tax base and revenue potential".
It said that such scenarios, however, are only viable if the government commits to expenditure control and improved collection rates in other taxes. Doing so will "demonstrate that all sectors, private and public and the wider citizenry, must work together to make this happen. The burden cannot fall to any one sector."
The government ultimately decided it will implement VAT at 7.5 percent in January 2015.
Pointing to the findings of the study conducted by the Bahamas Hotel and Tourism Association (BHTA), the coalition's paper pointed out that a VAT at 10 percent and 15 percent - different portions of the tourism sector were to be taxed at different rates - would have increased tourism-related prices by nine percent and resulted in an 11 percent reduction in tourism consumption.
However, in an indication that undoubtedly factored into the government's decision to impose a 7.5 percent VAT, the study - which did anticipate duty reductions - showed that a lower rate of VAT combined with additional revenue and fiscal compliance measures would raise additional revenue for the government from the tourism sector and have a "minimal impact on price competitiveness" in the sector.
Turning to implementation, the coalition called for private sector leadership on a VAT steering committee to assist with the development of regulations, guidelines and the review of systems and procedures being put in place to support implementation, and private sector leadership on a VAT implementation committee in order "to help develop and implement the roll-out and readiness efforts, focused on education, training and technology interfaces".
In his budget communication, Christie indicated that a task force will be established which will be staffed by three individuals from the private sector and given a budget of $150,000 to help to educate the public on VAT. None of those who will sit on the task force have yet been announced.

The Islands Of The Bahamas hosted key travel partners at a Bahamas-themed night Miami Heat home game earlier this month at the American Airlines Arena.
The Bahamas' branding was prominently placed in the arena, amidst 15,000 cheering fans.
Tickets for the recently-held IAAF world relays were given away during the Heat's Bahamas-themed night.
Heat fans were encouraged to sign-up to win a four day/three night package at Baha Mar and tickets for air travel for two was provided by Bahamasair. Sign ups took place at Bahamas booths located on the 100 level and 300 level of the arena.
"The Bahamas' close proximity to Florida has made it a go-to destination for South Florida residents for many years. We are using our presence at the arena to bring Bahamian culture directly to consumers highlighting all of our new developments and providing a taste of what a real getaway in paradise is like," said Greg Rolle, director of sports tourism for the Bahamas Ministry of Tourism.
"The Bahamas is honored and privileged to be partnering with the Miami Heat who are enjoying a dynamic season," he added.

FOUR men must wait a few more days before they learn when they will stand trial in connection with a seizure of $900,000 worth of marijuana in southern New Providence.

Bahamian Delino Moss took the top spot of valedictorian a Sandals’ Management Trainee Programme (MTP) Graduation this week.

Mr. Moss said he was grateful and humbled to be given the opportunity to be the voice of the graduating class – a group he described as his brothers and sisters. And he commended the company for “seeing our hunger and determination to be better than we were and giving us an opportunity to prove it.”

Two years ago, 20 young persons desirous of securing coveted management positions within the Sandals Group signed up for the Sandals MTP. On Monday night, having completed the rigorous programme which took them across the region, through almost every hotel department and thousands of hours of training, they celebrated their success at the programme’s official graduation ceremony.

In giving the evening’s main address, Adam Stewart, Chief Executive Officer at Sandals Resorts International urged the graduating group to remember that life is an attitude. He said, “You can choose to be positive, to be successful and to look at the glass half full. We are trying to be a part of that attitude and to help you become the best that you can be.”

He said the company remained firm in its commitment to human resource development and commented on the important link between training, service delivery and guest satisfaction. He added, “We made a decision that we could cut many things but we couldn’t cut training and development one iota.”

The intensive two-year training and development programme gives promising young leaders from across the Caribbean an opportunity to train within the company with the ultimate goal being to prepare them to make active and positive contributions to regional tourism.

Director of Business Processes and Administration, Wayne Cummings said, “The Management Trainee Programme has been the centerpiece of SRI’s management succession planning strategy with the ‘best of the best’ from within the resorts along with new hires, continuing to display exceptional growth. This talent will take not just Sandals but the tourism industry on the whole, to the next level.”
/br> The graduates were honoured and presented with scrolls and certificates in an elegant ceremony and dinner held at Sandals Whitehouse European Village & Spa. A walk down memory lane was also in order as video messages from all 20 graduates sharing their personal experiences were played much to the delight of those in attendance.

The 20 graduates are now set to take up management and assistant management posts in various departments at Sandals and Beaches resorts across the Caribbean.

As the graduates settle into their management roles in the company, a new batch of 26 aspirants has been recruited for the 2014 cohort. The 26 trainees, 14 of whom are new to the Sandals Group, were selected from over 1,500 applicants and after 700 interviews. . The diverse group consists of individuals from Antigua, The Bahamas, Barbados, Grenada, Jamaica, St. Lucia, Trinidad and Tobago and the Turks and Caicos Islands. The new recruits will begin orientation as early as early June.

The Management Trainee Programme was originally introduced in the mid 1980’s and is an integral component of the company’s overall training thrust. Other training initiatives include the Hospitality Training Programme which provides unattached high school graduates with an introduction to various departments in the resorts. Continuous on the job training sessions, scholarship opportunities, workshops and seminars for team members are also offered through the Sandals Corporate University.