(Eleuthera, Bahamas) Kevin Burrows, Senior Vice President with CFAL, a well known investment and financial planning firm located in New Providence, was invited by the Rotary Club of Eleuthera (RCE) as a guest speaker, to present on the upcoming Value Added Tax (VAT) system, during their regular weekly meeting, on Thursday, September 19th at 7pm at the Cancer Society building in Palmetto Point, which was opened to the public.
Mr. Burrows gave an overview of what VAT was, and how it theoretically works, then highlighted some of the other countries in the region which had implemented VAT and the structure they used. Burrows attempted to explain why the national tax policy was being restructured at this time, touching on international trade agreements like the World Trade Organization (WTO) accession and the Economic Partnership Agreement (EPA) which the Bahamas is now involved; as well as detailing several supporting arguments for changing the current ‘narrow’ tax structure to a broader system to increase government revenue.
However, Burrows also emphasized the need for government to exercise prudency in spending under any tax regime – using the example of Barbados, he noted that they having taken on the VAT system in the mid 90’s – and increasing government revenue considerably, still today, faced a total government debt to GDP ratio of 103% compared to the current Bahamas debt to GDP ratio of approximately 60%.
The ensuing question and answer session was robust and at times a little heated with audience members taking on the issues of the timing of VAT, the possibility of saying no, and the mechanisms to properly collect in light of the current challenges with collecting property, hotel and casino taxes as well as other issues on the subject of VAT.
The evening’s audience engaged in lively discussion and questions following the presentation by Mr. Kevin Burrows of CFAL.
This private presentation and discussion on the upcoming VAT system highlights the need to broaden the discussion with public community forums hosted by relevant government agencies, and a comprehensive education campaign, with further detail on what the VAT system is, how it will work in the Bahamas in general and Eleuthera specifically, and how consumers and businesses will be affected by this far-reaching change in the nation’s tax policies – including the changes which have recently been made and changes to come in customs fees and tariffs.
