NASSAU, Bahamas – Financial Secretary John Rolle says the Ministry of Finance is hoping to get 4,000 businesses registered for the value-added tax (VAT) beginning in September.
Mr. Rolle, who recently met with editors and reporters from various media houses for an open discussion on VAT, said the registration process will take place between September and December.
VAT is set to be implemented on January 1, 2015 at a rate of 7.5 per cent.
“From our assessment, we know that during that period we will be able to register all of the businesses that should be registered,” Mr. Rolle said.
“Any business that is not registered at the end of that period would likely have made a deliberate decision not to register.”
The government tabled the VAT legislation in the House of Assembly last Wednesday. Parliamentarians expect to debate the bill in the coming weeks.
Mr. Rolle said businesses that that have an annual turnover of $100,000 must register.
A related group of companies would be allowed to use a single VAT account and to file a consolidated VAT return. This, Mr. Rolle said, would eliminate the need to recognise input and output taxes on intragroup transactions.
Businesses whose annual taxable sales exceed $5 million will file their VAT returns on a monthly basis. Businesses with an annual turnover of less than $5 million, but more than $0.4 million will file quarterly and businesses with an annual turnover of under $0.4 million will file semi-annually.
Businesses that qualify would be able to apply to defer VAT payments at Customs until the return for the VAT is filed.
The financial secretary also noted that a VAT Tribunal would adjudicate on tax matters with appeals to the Revenue or Supreme Court permitted on matters of law.
Mr. Rolle said the government does not anticipate lengthy wait times for refunds.
In fact, he said businesses that file monthly returns can request refunds within two months of the period in which the net credits arise. Before, there were proposed wait times and processing timeframes of up to and beyond six months.
Registrants that file their returns on a quarterly or less frequent basis would be able to claim refunds at the time of filing.
During his address to the media, Mr. Rolle noted that there are quite a number of items that are exempt from VAT, including residential rent and all property sales, services provided to public patients receiving free care at public facilities, charitable and religious activities, day care facilities and elderly care facilities.
The government is moving to implement VAT now as a way of boosting revenue and reducing its debt burden.
Less debt, the government says, would free up more resources to spend on basic services such as social services, police protection and medical facilities.
Financial Secretary John Rolle addresses members of the media during a recent value-added tax (VAT) workshop (Photo/Wendell Cleare for The Counsellors)
