A Breaking VAT UPDATE >>>>
March 17, 2015 (Nassau, Bahamas) – The Ministry of Finance is providing more clarity on the Flat Rate Filing Scheme, as regard its non-availability for Grand Bahama Port Authority (GBPA) Licensees.
“The 4.5 percent flat rate was never conceived for Port Authority Licensees. We stated this in our Guidance Notes and in the VAT Rules which were published. Today’s story in the press gives the impression that there has been a change in policy on use of the scheme. There has been no revision,” said Financial Secretary and Acting VAT Comptroller, John Rolle.
The flat rate is an average. It is based on having reliable information on the average amount of VAT that Bahamian businesses are likely pay on their inputs. Once considered that sales attract a 7.5 percent VAT, allowance for VAT paid on inputs leaves a national average of 4.5 percent of sales that businesses would have to remit. This is based on historical data that has been compiled.
Businesses in the Port Area that purchase bonded items from other licensees or that import items on which they enjoy Hawksbill Creek exemptions would not pay VAT on such inputs. Therefore they would not have the same average input VAT structure as businesses outside of the Port Area. As such, the tax assumptions that justify the flat rate formula cannot be applied inside the Port Area.
As it stands, the Ministry of Finance does not have historical data yet to tailor a flat rate for Grand Bahama Port Licensees. It requires information disclosures on the average breakdown of sales and purchases of supplies that are bonded and supplies that are not bonded.
For more information visit www.bahamas.gov.bs/VAT or look up VATBahamas on Facebook, Twitter, YouTube and Instagram.
To contact the VAT Department directly, please send an email to firstname.lastname@example.org or call VAT Client Services at (242) 225-7280.