The Government is “not expecting a tsunami” of businesses applying to use ‘virtual warehouses’ to ease the Value-Added Tax (VAT) transition, a top government official expecting “a few dozen at most” by today’s deadline. John Rolle, the Ministry of Finance’s financial secretary, confirmed last night that the Government had to-date received “21 applications for the Customs transitional warehousing arrangements”. He added: “These include large foods stores, clothing stores, building supply stores and several luxury goods retailers. “A few more merchants are expected to submit applications [today], which is the deadline. “ Mr Rolle told Tribune Business in an earlier interview that only the largest importers, such as food, hardware/building and luxury goods retailers, plus their wholesale suppliers, were expected to require a ‘virtual warehouse’ for the two-month VAT lead-in. “We expect to be receiving applications up to today,” he said. “We don’t expect there to be a tsunami of applications. We expect maybe a few dozen, but those will be very substantial, very substantive in terms of importers. Customs knows who the target businesses that will be applying are.” Tribune Business was first to reveal that the Government was developing a ‘virtual bonded warehouse’ concept to ease the VAT transition for businesses with large physical goods inventories. The Customs Department is managing these, and may require qualifying importers to post a financial bond. With the bond in place, during the months of November and December, VAT registrants will be allowed to import items targeted for reduced import duty rates post-January 1 without having to pay these taxes up front. Companies have to report all sales of such inventory before December 31, and pay duty on these items at the current rates. But bonded items, which remain in inventory after December 31, will benefit from the lower rates taking effect on January 1. And merchants have until February 28, 2015, to pay both the duty and VAT.” Companies using ‘virtual warehouses’ will also have to get their inventories certified by a Bahamas Institute of Accountants (BICA) licensed accountant, with reports submitted to Customs on New Year’s Eve. The idea is to avoid ‘double taxation’, and companies paying both VAT and the older, higher rate of import duty on items sold post-January 1. Mr Rolle, meanwhile, confirmed that the Government had adjusted the ‘virtual warehouse’ policy to allow businesses to submit applications before registering to pay VAT. This came after Tribune Business pointed out that, originally, businesses can only employ a ‘virtual warehouse’ if they have already completed the VAT registration process. The two-day (48 hour) window between the October 13 online start and ‘warehouse’ application deadline may leave many struggling to meet the latter deadline. Mr Rolle emphasised that the Government had waived the requirement for ‘virtual warehouse’ applicants to already possess a VAT Taxpayer Identification Number (TIN). “We’re not allowing that to hold up the process,” Mr Rolle told Tribune Business yesterday. “These businesses supply that information to Customs subsequently. “The only thing businesses should be focused on is if their inventory is significant enough to be impacted by the duty rate change.” Implementation of the policy adjustment may not have gone entirely smoothly, though. Rupert Roberts, Super Value’s owner and president, last week told Tribune Business that when his staff inquired about a ‘virtual warehouse’, they were told by Customs personnel they could not receive one precisely because the company had not yet registered for VAT and lacked a TIN. Asked about this yesterday, Mr Rolle replied: “We did make a clarification to that, so that should not be happening.” Philip Beneby, the Retail Grocers Association’s president, yesterday said he was unaware of any problems experienced by ‘virtual warehouse’ applicants. While conceding that his own business, Courtesy Supermarket, had not applied for this facility because it did not need it, Mr Beneby said: “I haven’t heard anybody screaming about it, so I guess either it’s working or nobody has spoken up.”
Posted on: Thu, 16 Oct 2014 02:38:46 +0000
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