On the proposed VAT
Published: Oct 08, 2013
In one of the recent publications, the former Central Bank Governor and State Minister James Smith, a man for whom I hold the highest professional respect, posed the rhetorical question, “If it’s not VAT, what then?”
Well, Sir, I should like to suggest that that is precisely the question. And it is not rhetorical at all. It is simply astounding, given the gravity of the fall-out of this proposal, that the government could proceed to make such a fundamental and profound change to the taxation system without reference to the people themselves.
The regulation of local gambling, which concerned only a small segment of the populace, was deemed important enough to be put to a national referendum. But this proposed change to our tax system, which will impact every person spending money in The Bahamas, the living and the dead, the young and the old, the resident and the visitor, is being pushed ahead without the people having an opportunity to decide if they want it to happen in this way, or in some other form.
What is equally astounding is that, in bringing this tax proposal to the public, the government did not also include a plan to immediately address the burden on the annual budget caused by excess government spending and the accumulated debt of the country.
No plan to strengthen the country’s fiscal position can be sensibly entertained without a companion plan to reduce our excess debt through the sale of unproductive assets. Instead, what the government is attempting is to add additional taxes to a stagnant economic base, in order to meet payment demands that are already far higher than the base can support. The result will be a crushing burden on this small economy, and I fear that, if we proceed with this proposed system, the most vulnerable among us – both individuals and businesses – will be devastated by the results.
That we have hard choices to make is a fact. But the people must have the opportunity
to consider the options and to make that choice. The proper course, therefore, would be for the government to develop those options, in consultation with the business and community, and allow the choice to be made by the people of The Bahamas at the next elections.
In the interim, their full attention must be given to shedding as many unproductive assets (including land) as can be sold, so that the debt of the country can be brought back to a level that can be supported by our sustainable income.
– Shayne Davis