THOMPSON SAYS PLP GOVERNMENT ANNOUNCES MAJOR INCREASE IN TAXES, BEGINNING WITH $90 MILLION IN INCREASED GOVERNMENT FEES WITHIN ONE YEAR

Aug 24, 2022

The Opposition marvels that the government is just now starting to level with the Bahamian people about its plans to increase taxes to meet its stated 25 percent tax revenue to GDP ratio. It is unfortunate that Bahamians should have to learn about $90 million dollars in increased taxes on government services within the next twelve months in the back end of a table near the end of the report (page 10) entitled “Supporting The Revenue Target of 25% of GDP” released yesterday.

Is the government planning on raising fees for driver’s licenses, motor vehicles, passport renewals? Which fees are the government increasing over the next year as signaled in the report? Although they have tried their typical PLP spin to bury the lead under 12 pages and thousands of words, the Davis administration is finally admitting that it plans to do the following: 1) Introduce corporate tax; 2) Increase the taxes on gasoline and diesel fuel; 3) Increase taxes paid in the form of fees for government services.

This report was prepared back in March of this year as per the title page. Why did the government not provide this document to the public in advance of the budget exercise in May? What caused the five month delay in releasing the report? Why was the government not forthcoming with the Bahamian people? The Leader of the Free

National Movement and myself told them and told the Bahamian people that they could not raise the $1.2 billion in additional tax revenues that the PLP stated in its fiscal strategy report without imposing additional taxes.

Instead of responding honestly and forthrightly to our concerns, the Davis administration reverted to its usual flim and flam and instead put out conflicting reports and endless spin – only now shamefully attempting to sneak in this news buried under a mountain of words. It is unfortunate that it has taken the Davis Administration one full year to decide to come clean to the Bahamian people with its tax plans that it knew it had all along.

Sadly, this report is still woefully insufficient. It raises more questions than it answers. After one year, the government must by now have a clear sense of what specific tax measures it will implement and what the expected yields are intended to be. In addition to the $90 million in additional taxes in the form of increased government fees, the plan

ought to have detailed estimates on the revenue intake from all of the proposed additional taxes and other revenue enhancement measures to be implemented by the Davis administration. We need to know which segments of the population are bearing the brunt of the government tax measures. Will the new tax measures be progressive and have wealthier Bahamians pay a larger share, or will the government continue to do favors for the rich and connected and give them tax breaks on yachts.

The report also states that the government plans to reduce or eliminate the tax concessions granted through the MyGateway platform. The FNM rejects any attempt to remove the tax concessions it put in place to assist ALL new Bahamian entrepreneurs, or any attempt to remove the tax concessions for the southern Family Islands and Andros. More importantly, the government at this stage cannot just be paying lip service to expenditure restraint. The report keeps referring back to the government’s fiscal strategy report 2021 when this government has already brought a budget to Parliament that ignored the expenditure and deficit targets in that report in contravention to the Fiscal Responsibility Act, 2018.

Instead of reducing expenditure and capping its deficit consistent with its own fiscal strategy report, the government went ahead and increased expenditure and blew past the deficit target. The public is fully aware that the Davis administration has no intention of practicing any form of spending restraint. They have repeatedly shown the Bahamian

people that they are about the show – the lavish living with endless events, parties and first class travel for large contingents around the world all on the taxpayer dime.

The FNM wants it to be clearly understood: We will not support any material changes to tax policies unless the government does the following: 1) Provide a full justification with proper analysis and estimates for the new revenues and its impact on various segments of the Bahamian people; 2) Implement ALL of the provisions of the Freedom of Information Act and the reporting requirements of the Public Procurement Act and the Public Finance Management Act so that the public is assured at all times that its tax dollars are being appropriately and efficiently spent; and 3) Engage all relevant stakeholders with a properly crafted white paper on fiscal and tax reform so as to get the informed feedback from all those who will be impacted by the tax plans of the

government.

END

J. Kwasi Thompson

Member of Parliament East Grand Bahama

Shadow Minister for Finance

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