Increase In Vat Or What?

AuthorDerence A. Rolle Davis
The Law: The Social and Economic Effect on The Bahamas 2000 - 2020
Usually in most homes one person is better at keeping the “books”, or
managing the budget, than another. Using the analogy of running a household /
country, what was discovered is a need to get a greater contribution from
members of the household to pay household expenses. Expenses for the country
includes roads, infrastructural development, light, water, airports, and the like.
The government sought to make provisions to collect a greater contribution from
the householders {citizens and visitors alike) by adding a new tax system called
Value Added Tax. Where is the Value? Where is the Added (factor or thing to
whom and to what? Why is there a tax? What is being multiplied and how is this
beneficial to me, the consumer?
VAT is a fancy word for sales tax. The government’s unpopular decision
to increase value-added tax from 7.5% to 12% in July 2018 has led to a view that
the people were duped when VAT was introduced in 2015 at the 7.5%.
Deputy Prime Minister, K. Peter Turnquest, said that the total debt owed
by The Bahamas was $7.52 billion dollars (US$). He said that the successive
governments have artificially under budgeted commitments and some vendors
were not paid.
Bain and Grant’s Town MP, Travis Robinson, Pineridge MP, Frederick
McAlpine, Reece Chipman, MP for Centerville, and Vaughn Miller, MP for
Golden Isles, also voted against the measure, a move that caused the public to
dub them the ‘Dissident Four’.
Since the introduction of VAT Bahamians are now made to pay tax to
deposit their own money on a bank account. This FNM government is the same
group that voted against VAT in 2015 when the then opposition leader Dr.
Hubert Minnis said that to implement VAT shows no forethought by the PLP,
and it was a double taxation.
Let us examine how this VAT tax works on the life of a person in The
Bahamas. Consider a business owner as a retailer, for example. He buys goods
that are imported. He pays for the goods and he pays customs duty and freight
with a VAT tax and stamp duty added to the cost of the good. The retailers sells
the good to a consumer. He has to mark (inventory value) the good up to the
price to make the money he spent on the good + the VAT + freight + stamp tax.
If he sold the goods for ten dollars ($10) he must now add 12% VAT on the cost
of the good, making the cost to the consumer in the sum of Eleven Dollars and

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