Tax coalition positive about PM talks

The Nassau Guardian

Tax coalition positive about PM talks

The Coalition for Responsible Taxation yesterday expressed optimism about recent talks with Prime Minister Perry Christie and said it is possible for the group to complete its tax study and present an alternative to value-added tax (VAT) that can be implemented before July 1.

Robert Myers, chairman of the coalition, said the group’s economist will begin working on its report within seven to 10 days. He said Christie has assured the group it will have access to the necessary statistics and data from government agencies that will aid the process.

However, Free National Movement (FNM) Chairman Darron Cash said it is “unreasonable” for the prime minister to expect the private sector to produce in depth studies on VAT alternatives so close to the implementation date.
He called on the government to postpone VAT until the private sector and the Ministry of Finance could properly research tax alternatives.

But Myers said the group would work quickly to get its report out and hopefully persuade the government to adopt a different tax system.

“We will work as diligently as possible to get various statistics and information from the Ministry of Finance, or the National Insurance Board (NIB). He’s [Christie] assured us that we’ll have a good hard look at it and work together,” he said.

Myers said the group has put forth several tax models to the Christie administration that they believe could net the government more than $600 million a year.

He said based on the group’s initial research using NIB data, creating a payroll tax system could give the government an estimated $190 million a year. Myers said a payroll tax is easier to implement and collect than VAT.

Myers said he is assured that the prime minister wants to make the right economic choices for the country and added that Christie’s sit down with the coalition was “a good sign”.

On Wednesday, Christie said he can still be persuaded by the private sector to introduce an alternative tax model if it proves to be viable.

Christie also said the Ministry of Finance is in an “advanced” stage of preparation for VAT and is moving ahead with its implementation.

But Cash said the fact that the government has not completed its VAT legislation, regulations or tariff schedule is evidence that the Christie administration is unprepared.

“He suggested that the government has everything it needs in place to implement VAT on July 1 and that’s not correct, because if the government had everything in place the legislation would be in final form and it would be before Parliament,” Cash said.

“If the government was ready for July 1, the regulations and the tariff schedule would be finalized and would be in place.”

Cash gave credit to the prime minister for being open to discussion but said it is too “late in the game” for the talks with the private sector.

“It is unreasonable for him to believe that the country is going to be able to produce something worthwhile, well considered, fair and responsible within the time frame that he proposes if he wants to hit the July 1 date,” he said.

Minister of State for Finance Michael Halkitis has said the legislation must be finalized by the end of this month to facilitate the July 1 implementation date.

Christie said yesterday the government is still making modifications to the latest VAT bill based on consultations and feedback from the community.

VAT is expected to generate an additional $200 million in revenue, according to government officials.

The government has said it will introduce VAT at a rate of 15 percent in most cases and 10 percent for the hotel sector.

Several business owners who are a part of the coalition have joined an anti-VAT campaign and are petitioning their customers to do the same.

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