VAT has been in effect for a week now. So where do we stand and what’s next?

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On January 1, 2015, value added tax (VAT) was implemented throughout The BVAT has been in effect for a week now. So where do we stand and what’s next?ahamas to help cement  the government’s program of public finance reform and reduce a debt burden that diverts funds from essential services such as education, healthcare and garbage collection. VAT applies one rate across all industries; broadening the tax base and making it more equitable by including both goods and services.

“Our priority is economic growth and increasing the quality of life for Bahamians. The implementation of VAT will ensure that the government is better equipped to deliver quality services to all Bahamians” stated Minister of State for Finance Michael Halkitis.

For the last several months, the Ministry of Finance has been working closely with businesses to ensure they are registered and prepared to assist in collecting this important revenue.  The Ministry has also put a large focus on consumer education through advertising, social media, website development and other direct to consumer initiatives.

Now that VAT has come into effect, the VAT Department is focused on compliance and consumer protection. There are currently over 5,000 Bahamian businesses registered to collect VAT, and more registering every day.

“VAT Department representatives are now out in full force in the community to ensure businesses are complying with VAT. We are taking compliance seriously, but we also understand there is a learning curve and we want to work with merchants to ensure we address any issues in regards to barriers to compliance.” Minister Halkitis said.

VAT registrants have until February 28, 2015 to be fully compliant with the law. In the coming weeks, the VAT Department will be conducting workshops with businesses to train them on compliance as well as provide guidance on how to submit their returns. The Department will also be releasing a series of videos that provide step-by-step instructions on how to file returns.

Another key focus of the Ministry post-VAT launch is consumer protection. The VAT Department has put in place a system where consumers can inquire about VAT and report any potential violations of the new tax regime by businesses. Consumers can visit www.bahamas.gov.bs/VAT to view the list of registered businesses.

The Bahamas was in great need of tax reform. The Government of The Bahamas is committed to economic growth, and tax reform is a key step in that process. The former tax structure did not generate adequate revenue for the Government to support the growing economy nor services or amenities for Bahamians.

The Bahamas has a strong reliance on imports. By implementing VAT, The Bahamas is able to continue to take steps to join the World Trade Organization (WTO), which will lower trade barriers, resulting in reduced prices of imported goods and services. In the long-term, this will allow Bahamians to take advantage of WTO trade policies and standards as they seek out more international business opportunities.

“This a continuance of broader reforms to ensure that the Government will have enough funds for the current and future needs of all Bahamians to improve quality of life and sustain economic growth in our country – a goal that all Bahamians share,” concluded Minister Halkitis.

For more information visit www.bahamas.gov.bs/VAT or look up VATBahamas on Facebook, Twitter, Youtube and Instagram.

VAT PSA 14 from King Of Hearts Media on Vimeo.

PSA 18 from King Of Hearts Media on Vimeo.