Bahamian Minister of Trade, Leslie O. Miller revealed last week that membership of the World Trade Organisation may force the country to raise tax from a new source to compensate for revenue lost through the restructuring of import tariffs, according to the Nassau Guardian.
“The Bahamas derives 65 per cent of its income from direct import taxes, so, obviously, that’s the main concern,” Mr Miller explained, continuing: “If we have to readjust that sector of our income base, what do we replace it with?”
Miller indicated that potential new revenue streams can effectively be reduced to three choices, VAT (Value Added Tax), a sales tax or an excise tax. “The simplest one, I am told, is either to come up with a simple excise tax or to come with a sales tax. The VAT tax is a very difficult and tedious tax, and is very costly to implement, and it goes into areas that The Bahamas may not wish to go into. In other words, the VAT tax is also a tax for services, the lawyers, the accountants, and what have you. It’s a much more broad-based tax that would interfere in areas that have never been delved in before, and it could present some problems for us,” observed the Trade Minister.
“It appears to me that, perhaps, the excise tax or just one straight-across-board sales tax may get the job done, but those things remain to be seen,” he added.
At present the Bahamas holds observer status within the WTO, although it is currently working on its country document, which the accession committee expects to be presented late 2003 or early 2004, with a view to becoming a full member of the organisation within the next two years. It has been estimated that the Bahamian government has spent around $0.5 million in preparing its country document.
By Amanda Banks, Tax-News.com
