GOOD NEWS: Over 600 to benefit from new VAT threshold; “We have listened to their concerns” – says PM

By SNO Staff

Prime Minister Dr Kenny Anthony

Government has proposed raising the Value Added Tax (VAT) threshold from $180,000 to $400,000.

This means that over 600 VAT registrants will not be required to collect VAT on behalf of the government, Prime Minister and Minister of Finance announced in his 2015 Budget Statement on Tuesday.

“We have recognized that these smaller registrants are continuously seeking filing assistance from the Inland Revenue Department and some have even requested de-registration. We have listened to their concerns,” Dr. Anthony said.

Requests for voluntary registration will continue to receive appropriate consideration, he noted.

“This will ensure that small manufacturers and other sensitive businesses (falling below this threshold) are not disadvantaged. Voluntary registration will, however, be subject to adherence to the provisions of any enactment administered by the Inland Revenue Department,” he added.

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10 comments

  1. omg no you have it all wrong...The government is in a win win situation with a VAT system once it is administered properly. Everybody will pay VAT but not everybody will charge VAT. To charge VAT you must meet a threshold. When you charge VAT you are able to claim the VAT that you paid when purchasing your goods eg; you buy goods for resale you will pay cost price plus input vat
    then you will sell the item at a selling price which is cost price plus mark up (excluding input vat) plus output VAT. Then at the end of the period you will deduct Total Input VAT (vat on purchase) from total output VAT (VAT on sales) and the difference is remitted to the government.

    Now for the small companies who do not make the threshold they will pay input VAT on purchase but will not be able to charge on sales. So what they will do is to pass the input VAT charge onto the consumer in the sale price to recoup the input VAT they paid upon purchase.This all stays in their pocket.
    This could result in price gouging. aslo Govt collects more as the small business is not getting it back from the government and goods become more expensive for the consumer.
    Hope this exlains it!

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  3. Does this mean the vat system doesn't work. Or does this mean the big companies get to claim vat back while the smaller ones suffer. So a small business that fixes cars will have no vat on repairs while the big ones hav vat. Oh what a confusion. Vat just creates jobs and head aches. On some bills that I write at work there's just 7 dollars of vat, the paper work and the tally of vat not worth it. So super js will always have vat and mini marts won't. Is this fare. And when they reach their threshold they close down until the next fiscal year.

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  5. Vat exempt means these companies have higher cost, who will pay them. ? We need to understand how VAT works,

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  7. SORRY Correction threshold not threshole

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  9. raising the VAT threshole will only alleviate the administrative process of reporting to the government. When the small business buys goods or imports goods for resale they will still pay VAT and certainly pass it on to the consumer in the selling price, it just won't be called VAT. Most of these small businesses who cannot pay the VAT due to the government now is because they use the VAT as cash flow it is not their money it is the government money, yet they use it and when its time to pay they can't pay. Increasing the threshold will just make things more expensive as the business who is de-registered will pay VAT when buying and will not charge VAT so the only way to claim the VAT is by passing it on in price! Government needs to give concessions of point of sale programs for VAT, train the small business people to administer the VAT and get the VAT officers off their fat arses to go around the different small businesses to assist them until they get it right TONNEH!!!!

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  11. AAU U CAN SEE ELECTION WILL BE SOON KENNY U TAKE OUT THE EAR PLUGS U TAKE OUT VAT ON SMALL BUSNESS U WASING HEARING ME .WHEN I CLOSE MY BUSNINESS IS WHEN U WANT TO CHANGE THINGS ,I HOPE IT WORKS.

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  13. It is too late for many local small businesses they have already died.

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  15. Elections must be coming!

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  17. Then I hope these small "sensitive'' businesses will be allowed to purchase raw materials and services vat free so as not to rob their customers in the name of vat!

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  19. eh beh boh... finally you took out the earplugs and started listening. Well done Prime Minister but you should also urge these same businesses to have proper record keeping systems. VAT revealed that record and accounting systems were shitty. Anyway so what happen to VAT on ground provisions? you kept the ear plugs on for this one because you eh eating that at your home? Judging by that plump belly macaroni and cheese alone but anyway well done on this issue. I thank you for listening because the small businesses needed it.

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