NASSAU, BAHAMAS — The Bahamas has the highest on-time filing rates for value-added tax (VAT) in the region, a new Inter-American Development Bank (IDB) study laying out key fiscal and financial reforms has revealed.
In the book entitled “Economic Institutions for a Resilient Caribbean”, it was noted that in order to build resilience against external shocks and recover from the COVID-19 pandemic, Caribbean countries must advance key fiscal and financial reforms.
The IDB study revealed that on-time filing rates across Caribbean countries vary, with The Bahamas having the highest on-time filing rate of 75 percent, while Guyana has the lowest at 43 percent.
It was noted that Jamaica has a relatively steady percentage of on-time filing across tax types of between 65 and 67 percent. Trinidad and Tobago also has a high percentage of on-time filing rates for the VAT with 73 percent. The average in the Caribbean is 60 percent.
It was noted that the IT system DataTorque has contributed to the successful implementation of VAT in The Bahamas.
“The system allows users to register for a free user account for various tax types, communicate with the tax office by sending and receiving messages, manage tax accounts, submit tax filings, make payments, amend filings and request changes to taxpayer information,” it was noted.
It was also noted, however, that Guyana, The Bahamas and Suriname should consider establishing a special organizational unit devoted to preparing economic studies like the ones in Barbados, Jamaica and Trinidad and Tobago.
“In general, these units should include a specialized analytical team focused on tax collection trends, monitoring the hidden economy, revenue yields from audits, understanding taxpayer behavior and providing input to government budgeting processes of tax revenue forecasting and estimation,” it was noted.
“For these matters, strong inter-institutional coordination is needed along with the use of tools made available through digitization.”