The Government’s VAT Announcement

VATINFOWell, the Prime Minister announced what those of you who read me would already know I have said regarding VAT. Instead of getting VAT in at 15% from the start with many key areas being exempted, there will be a slight delay in VAT, and now it will be charged on most of the items & areas Bahamians were initially told would not attract VAT. And then after VAT is introduced next year at 7.5%, the rate will be increased later on (as it always is by every single country that ever implements VAT). Our debt to GDP ratio along with a likely or potential credit downgrade will be among the reasons given for that initial 7.5% VAT rate needing to be later increased. That’s how this will play out. Now wait and see the areas the government will tell you must now attract VAT as of January – it will be almost all of the areas they first told you would be exempt from VAT, in the hopes that those previously announced exemptions would have helped them to be able to sell VAT to you easier in the beginning. THE “DECREASED VAT” RATE IS NOT THE “GOOD” IT APPEARS TO BE. THE GOV’T DIDN’T GIVE YOU ANYTHING, IT WILL SIMPLY ACHIEVE IT AND THE IMF’S ORIGINAL OBJECTIVES BY THE STAGGERED PROCESS I JUST OUTLINED.

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