Gov't Urged: Push Small Business Over Vat Limit
By NATARIO
McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
THE Government was yesterday urged to help push small and medium-sized
businesses (SMEs) over the threshold that would force them to register to pay
Value-Added Tax, a leading consultant telling this newspaper that failing to do
this would negatively impact national development.
Mark Turnquest, principal of Mark A. Turnquest Consulting, said that while
he was an advocate for small and medium-sized businesses, he wanted to see them
hit the registration threshold - be it $50,000 or $100,000 - so that they could
contribute to more to the overall economy under a VAT system.
Mr Turnquest’s comments followed a recent Tribune Business article which
revealed there was “strong support” within the Ministry of Finance to increase
the compulsory VAT registration threshold to a $100,000 annual turnover, as it
would still capture almost 98 per cent of economic activity.
John Rolle, the Ministry’s financial secretary, said the Government had yet
to take a policy decision on this, but increasing the threshold from $50,000 to
$100,000 would only exclude several hundred businesses.
“That is good in a way to enhance business development in the country, but
when it comes to the Government making any extra money it’s going to be
somewhat of a negative for the Government,” Mr Turnquest said.
“The difference between a company making $50,000 to $100,00 is not that
great because there are a small amount of businesses making $60,000, $80,000 or
even $90,000 a year.
“That $50,000-$100,000, there are a minimal amount of businesses making
that. Either a business is making under $50,000 or it’s making over $100,000. I
would applaud the Government if they increased the threshold but it’s not
significant.”
Mr Turnquest added: “What the Government needs to do is determine how to
develop the country in a way that they could get more money from businesses.
“Through public and private partnerships the Government needs to now think
of ways for small and medium-sized businesses to get over the $100,000
threshold. I don’t see how the Government will be able to reduce the deficit,
enhance the GDP, provide extra money to develop the infrastructure and other
necessities if businesses stay very small.
“Right now, this is a petty shop-type economy, and working in a petty shop
economy, no one is going to benefit because everyone is hiding the amount of
money they make.”
Mr Turnquest said many small and medium-sized businesses were not honest
about their annual turnover, and would need to be audited.
“I don’t see the Government making a lot of money. I don’t see Value Added
Tax contributing to the economic development of the country unless we have many
more businesses moving beyond $100,000. They have to be encouraged, and
strategies developed, to move them over $100,000,” said Mr Turnquest.
Although I’m an advocate for small and medium-sized businesses, I really
want the small businesses to be making over $100,000 so they could contribute
more to the GDP, and the overall economy and economic development plan could
actually materialize.
“In this way, the Government could make more money, improve the Family
Islands and focus on economic activities that can actually bring more money
into the Treasury.
“You would have small from $100,000 to $500,000, and medium from $500,000
to $1 million, and everything under $100,000 is micro. We need to work with
international organizations, private investors, venture capitalists and other
financial funding mechanisms, and assist
with moving these small businesses over the $100,000 threshold. The Government
would receive more money and business would be making more money.”
