Business stakeholders are offering mixed assessments of the government's decision to create a "revenue court" which would deal with tax and other revenue-related infractions, with some suggesting that it's a step in the right direction and others indicating that the government should be focusing on educating businesses on their obligations under the new VAT regime.

Dionisio D'Aguilar, president of Superwash and former Bahamas Chamber of Commerce and Employers Confederation chief, said that the only way for the government to ensure greater compliance with its tax regime - including VAT - is to create "fear" that there will be consequences if it goes unpaid.

While a revenue court, which is intended to see fast-tracked prosecutions of revenue infractions, is a step in the right direction, suggested D'Aguilar, it may not even be enough.

Failure to comply with the VAT obligations has been projected to be a major challenge under the new regime, given that it places increased burdens on businesses to keep accurate records and submit payments in a timely fashion.

D'Aguilar said: "Bahamians are very much a 'carrot and stick' people - if we feel like there's consequences, we comply; if we feel like there's no consequences, we don't comply. There have to be definite consequences and right now the perception is there are none.

"A court implies time... I think if they are going to introduce a new tax, there have to be instant and harsh consequences, or people still won't comply."

Speaking with Guardian Business last week, VAT consultant to the government, Ishmael Lightbourne, said that there are plans to introduce the new revenue court at the same time as VAT comes into effect. The intention is that by creating a separate court, prosecutions could occur in a speedier fashion than if it went through the normal court system.

"It will deal with all revenue," said Lightbourne. "Not only that, it will be dealing with business license, real property tax. All the major streams of government revenue will be under review."

Winston Rolle, former executive director of the BCCEC, said that he feels that education is just as - or even more - important than penalties to ensure compliance under the new regime.

"A lot more details need to be put in the public domain as to how VAT would work and so while I can understand the desire to ensure people are in compliance I think the first thing is people need to be educated on whats going to happen with VAT and how.

"Also, from our experience with the National Insurance Board, you can take people through the court for non compliance and get a judgment and there's still a challenge with what happens after you get judgment. Having a revenue court is only part of what needs to be addressed."

The government has committed to instituting a comprehensive public education campaign prior to the implementation of VAT in July 2014. Around 4,000 VAT-eligible businesses are expected to be required to submit VAT records and payments on a monthly basis under the new regime.

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