In his 2006 Audit Report on government accounts, the Auditor General has reported, among other things, that more than $400 million in property taxes remain outstanding; that figure includes surcharges on unpaid taxes since the act was brought into force in 1974. It means, therefore, that for more than three decades, the government's accounting system has being accruing charges on some outstanding balances, balances that have not presumably been paid, despite the fact that a number of amnesty periods had been offered from time to time over the last several years. It is therefore wishful thinking at best to speculate as to what health, education or social services the government could have performed if it had collected such a large sum; most of it is uncollectible for reasons stated below.

Many of those outstanding balances represent family homes valued below the existing exemption threshold of $250,000. That category of outstanding taxes represents a substantial voting bloc, one who's presumed political influence is so enormous, that successive governments have shied away from giving the green light to the Real Property Tax Department to vigorously pursue them in order to collect. Indeed, any serious effort to collect real property taxes must involve using the punitive provisions of the act, which would permit the government to place the homes or properties on the market, so that the tax obligation could be met from the proceeds of the sale. Up to now, no government seemed prepared to take the political risk to sell the homes of Bahamians from under them, in order to collect outstanding taxes. And indeed, that policy stance by the government is intuitively correct in a small developing country. Given those circumstances and over thirty years of "looking the other way", the time is long past for the government to acknowledge that it has no appetite for imposing the draconian provisions of the Real Property Tax Act and accordingly, will not collect the majority of the taxes owed to it, particularly by low and middle income families. If a debt is deemed to be uncollectible, then the prudent course of action is to write that debt off and not continue to carry mythological amounts in the accounts.

It is argued, quite correctly, that the act of writing off taxes gives an unearned benefit to the delinquent taxpayer, and may also encourage him and others to avoid other taxes. Moreover, that it is offensive and unfair to the compliant taxpayer who has consistently paid on time and is therefore being punished for his good deeds. It is equally unfair to the wider community to have a set of laws on the books that you have no intention of abiding by, and at the same time, year in and year out, book shadow amounts of accounts receivable which you have no intention of collecting. And over thirty years of public accounting history has unequivocally demonstrated that is indeed the position of every government since 1974.

Good public policy must be free of ambiguity, transparent and accountable. It cannot mean enacting a law with more than adequate provisions for its enforcement, and then refusing to allow the authorized officers to do their jobs. And it certainly cannot mean allowing an average of $10 million per year in unpaid property taxes to accumulate without, to our knowledge, a single attempt being made to exercise the right of sale against a Bahamian home. The way forward seems rather clear, either enforce the law to recover the outstanding taxes, or admit that the balances are uncollectible and write them off.