|Christie: New tax regime is at hand|
Guardian Business Reporter
Published: Jun 28, 2012
Progress has been made on tax reform, according to Prime Minister Perry Christie, who said that he has the “white paper in hand” and is in a position to move forward with recommendations.
Christie spoke on the subject during the 2012/2013 Fiscal Position Symposium held yesterday at the Sheraton Nassau Beach Resort and Casino, where he admitted that some areas that generate revenue may have reached their peak.
“The position is that I told the country that The Bahamas is one of the very few countries that doesn’t have some form of value added tax (VAT), and that when we look at the revenue of our country we realize that we are running out of sources for additional revenue,” Christie said. “We are to the maximum now I think from what we can get from the customs duties.”
The prime minister added that an effective collection of real property tax has not been achieved and discussions with consultants have been held to alleviate that problem. He said the government and other global bodies, such as the International Monetary Fund (IMF), are on the same page in terms of The Bahamas’ need for another form of taxation.
The intent, according to Christie, is to have the public well-informed during the process. The education component on the ins and outs of tax reform is also critical.
“I indicated that we would have a white paper in short order,” he said. “I have the basis of the white paper in my hands now and I’m personally going through it now. I will present to my government in short order to look at and it will be published publicly for public comment and for us to invite the public to weigh in on the way forward. It is a major shift in government policy, and if is to happen I would want it to happen quickly.
“A lot of training would be necessary before you could implement any kind of change of that kind. The political direction has always been very cautious because we have not done the best job in educating our people as to the inequities that exist in our present system of taxation. It impacts the poor greatly.”
Shortly after the election in May, Minister of State for Finance Michael Halkitis told Guardian Business in an earlier interview that it was the intent of the government not to introduce any new taxes on Bahamians. However, that stance has changed and the new administration is leaning towards tax reform as a viable option for additional revenue generation.
Christie said that his current position will enable him to make progress on taxation, and he wants everybody to be on the same wavelength on the subject.
“The Ministry of Finance now has me in a position where I will go forward with recommendations that will ultimately crystalize into a white paper on taxation,” he said. “The paradigm shift that [VAT] brings about is so fundamental that we are going to need every one of you to understand it to contribute to it if we move forward with it to make it happen.”