The Bahamas Government unleashed its consumer-based tax – Value Added Tax (VAT) – at a rate of 7.5 percent on January 1, 2015. Since that time, a number of business owners and consumers have expressed that the implementation of VAT is burdensome to the Bahamian people.
Even before VAT was implemented, many were apprehensive concerning its impending impacts.
Self-employed Abaco businessman Frankie Fleuridor said that the “small people” are the ones being hurt by VAT.
“Everything is going up, but our pay hasn’t gone up – it’s still the same,” he surmised. “I think they should raise the minimum wage because everything is going up. How do they expect you to survive?”
Offering a solution to his query, Fleuridor said that people will have to learn to live within their means, save as much as they can, and teach their children not to be wasteful. Additionally, he said his concern is not so much about government taxation, but that our leaders use the revenue generated in an appropriate manner, i.e., ridding the nation of its national debt.
He also appealed to our leaders to listen to the people because they give the impression that our voice can only be heard when it is election time, but when it comes to major decisions for the country, our concerns are ignored.
Meanwhile, Prince Davis said he has observed an increase in prices at the food stores where he shops, but that at the end of the day, it still comes down to the individual. As a person who formerly lived abroad, he said he is not alarmed by taxation. However, he added that the 7.5 percent rate is a bit excessive.
“I feel like they should have added gradually increased the percentage when they added VAT, but they haven’t added anything to our paychecks,” Davis shared.
He said in the neighbourhood where he lives prices have skyrocketed in the stores. For example, Davis said a can of Vienna sausages used to cost $1 and is now priced at $1.50. With the price increase adding up to more than 7.5 percent, he said these increase need to be monitored by designated government agencies particularly in the case of businesses that are not VAT registrants.
Eventually, Davis said the high cost of living coupled with VAT will eventually eliminate the “middle man,” and all that will remain are the wealthy and poor.
On the flip side, setting up their businesses for VAT has been no walk in the park for Abaco business owners. Some have complained about the cost of setting up for the taxation with having to purchase VAT-compliant Point of Sale (POS) or cash register systems to now hiring accountants.
One business owner shared that in order to collect VAT on their BEC bill, they were required to switch the account name to their business name from their landlord’s name. That change cost an incredible $1,000 increase on their BEC deposit. The owner is still optimistic, though, because customers have been understanding about price increases.
Still, there are some who have felt the impact of price adjustments since VAT has been implemented. Veteran Abaco farmer Lennie Etienne was alarmed at the cost of collecting one gallon of herbicide, three five pound bags of liquid fertilizers and two bags of granular fertilizer from one of the shipping companies. His total cost was approximately $18. Based on his calculations, he should have paid $12.90, which includes VAT.
He said: “[The] pricing is ridiculous. They can’t blame VAT for this rise in price nor the cost of fuel, which is way down and dropping daily, so that’s no excuse.”
Abaco resident Michelle Thurston complained about being charged $1.39 plus VAT for two Fiji apples.
“The pricing is crazy, and I don’t blame vat,” she said. “I blame the business owners because clearly they are intentionally over pricing. It’s not fair.
“Honestly, I feel helpless in the food store. I can’t even begin to imagine how those who don’t have it [are] trying to make ends meet.”
Even more alarming was a comment made by a Nassau resident, Kristal LaFleur. She said she was surprised to discover that VAT is charged on fundraisers for schools.
“I think this is pushing it,” LaFleur vented. “The items bought to do the fundraiser are already taxed then to charge a tax on proceeds from the event [is] too much.”