Bahamas Seeks To Allay Taxpayers' Concerns On VAT
by Mike Godfrey, Lowtax.net, Washington
06 August, 2014
The Bahamas has held a VAT presentation setting out the reasons VAT is necessary, how it will operate, and reassuring the public that the cost of living impact is expected to be less than five percent.
Financial Secretary, John Rolle, held the presentation in which he explained that VAT will apply at 7.5 percent to most purchased goods and services.
Rolle emphasized the importance of tax in debt reduction, stating the need to free up more resources to spend on basic services such as police protection, education, medical facilities and social services.
The introduction of VAT is supported by other taxes, including USD100m in new revenue measures announced in last year's budget. These measures include measures to revamp and modernize real property tax administration system, to strengthen collections and introduce a fairer method of appraising real estate values. It includes the introduction of a new enforcement program to collect unpaid tax.
The collection of VAT will be administered by the Ministry of Finance's VAT Department. This will later be merged with the Department of Inland Revenue to become the Central Revenue Administration.
Rolle said: "The VAT, along with other broad reforms to control spending and improve revenue collection, will immediately reduce the amount of borrowing needed to finance the government's operations. Sticking to this plan would help to eliminate the deficit and allow us to begin to reduce our debt."
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