By NEIL HARTNELL
Tribune Business Editor
The Chamber of Commerce plans to discuss the 2018-2019 budget with the government today after being blindsided by its proposed 60 percent VAT rate increase.
Edison Sumner, the Chamber's chief executive, told Tribune Business that it had been taken by surprise by both the increase and its size, having expected that any move would have been to a ten percent rate.
"We expected that if there would have been an increase it would have been to around ten percent," he said. "We certainly did not expect 12 percent as a new rate for VAT. It will have an impact on the business community. We have been getting a lot of calls from people in the business community who are equally surprised by the move.
"We're hoping to meet with the Minister of Finance as early as tomorrow [today] to discuss the budget. We need to understand the rationale for this increase. We are having a review of the budget. The Chamber has taken it in hand, and will be giving it a thorough review to make an assessment of it and deliver some comments back to the government."
Michael Maura, the Chamber's chairman, told Tribune Business that his telephone had been "ringing off the hook" with calls from concerned businesses, as the VAT rate increase dominated private sector reaction to the budget.
Mr Sumner said the Chamber had not known about the government's VAT plans in advance of the budget, despite discussing various aspects of the government's fiscal plans with the Minister of Finance prior to yesterday's discussions.
"I would say to the business sector not to panic," he told Tribune Business. "It's come across only as a communication, and has not passed Parliament yet. It is the Minister of Finance's projection of what he would like to see, and now has to go through the process.
"It gives the Chamber the opportunity to have discussions between now and then. We'll certainly make some recommendations based on what was presented to Parliament. We'll be engaging the government and reporting back as soon as we have this meeting.
"We've been getting a lot of calls, and our response to the business sector has been that we will raise the matter with the government, have reached out to them and will meet with them to discuss the matter."
Mr Sumner said the tax reform discussion went "well beyond VAT", involving debate on whether a corporate tax should be introduced, the type of adjustments that should be made to the business licence, Customs duties and payroll taxes.
He added that the Chamber was a member of the Tax Review Steering Committee formed by the government to help review The Bahamas' entire tax structure.