IT’S HERE: New 10% VAT rate reflected at point of sale

IT’S HERE: New 10% VAT rate reflected at point of sale
(FILE)

Halkitis says businesses with challenges should contact ministry

NASSAU, BAHAMAS — As the 10 percent value-added tax (VAT) regime took effect on Saturday, Minister of Economic Affairs Michael Halkitis said the government expects the change to be a smooth process for retailers and consumers.

He noted that meetings leading up to New Year’s Day gave the government confidence in a streamlined transition.

“If someone has challenges, all they need to do is talk to us and if there are legitimate challenges, we would work with them,” Halkitis told Eyewitness News.

VAT decreased from 12 percent with exemptions and zero-rated items to 10 percent across the board with few exceptions on New Year’s Day, though businesses largely remained closed.

The best policy is to have a single rate, minimal exemptions and those who need assistance, you give it to them directly.

– Minister of Economic Affairs Michael Halkitis

Michael Halkitis.

Stores across New Providence reflected a 10 percent VAT rate on their wares and goods, though many had yet to adjust the prices on shelves and continued to do so at the point of sale.

Businesses will have 90 days to adjust price tags and stickers to reflect the decrease.

During a press conference last week, Free National Movement (FNM) Leader Michael Pintard said while the opposition understands the government’s argument for taxation across the board as part of its reduction of VAT, it ought to reconsider exempting certain items based on the potential impact on Bahamian families.

Asked if the government was minded to review the list of breadbasket items, Halkitis said while he understood the former administration and current minister of health have looked at it, the government believes that one rate with minimal exemptions, combined with direct assistance to those who are vulnerable, is an ideal model for the tax.

“The best policy is to have a single rate, minimal exemptions and those who need assistance, you give it to them directly,” he said.

“When those exemptions are introduced, it reduces the efficiency of the tax.

“That would just be opening up loopholes.”

Pintard also suggested that the Department of Social Services ought to be prepared to help defer the increased cost on Bahamian families as a result of the tax on breadbasket items.

But Halkitis said that is already in place.

“It will be direct assistance, so instead of something like a food program where you go and try to buy food and have people lined up to buy it, you give them a direct cash assistance so they can go and buy what they need,” the minister said.

About Royston Jones Jr.

Royston Jones Jr. is a senior digital reporter and occasional TV news anchor at Eyewitness News. Since joining Eyewitness News as a digital reporter in 2018, he has done both digital and broadcast reporting, notably providing the electoral analysis for Eyewitness News’ inaugural election night coverage, “Decision Now 2021”.