‘Take care not to weaken VAT’
FORMER PRIME MINISTER Owen Arthur, who introduced the Value Added Tax (VAT) to Barbados 16 years ago, has warned the Bahamas not to make the same mistakes this country made in administering the tax.
His advice: Don’t grant too many exemptions and don’t go out of control in spending VAT revenue.
Arthur gave that guidance during an address, entitled The Value Added Tax, Its Impact on the Bahamas: A Caribbean Perspective, that he gave to the Grand Bahama Chamber of Commerce monthly luncheon yesterday, as the country prepares for a 2014 implementation of VAT.
“The purpose behind the introduction of a VAT is to evolve a tax regime which features a broader base with lower rates of taxes than that which it replaced. The experience, however, is that such a worthwhile intention is frustrated by the practice of weakening the base of tax by the introduction of a number of exemptions over time,” said Arthur, whose Barbados Labour Party (BLP) administration introduced a 15 per cent VAT in 1997. (DP)