White Paper On Tax Reform To Secure Adequate Revenues For The Future

Tax Reform in The Bahamas

	Rt. Hon. Perry G. Christie
Source:	Ministry of Finance
Date:	February 14, 2013

A Value Added Tax Within A Reformed Tax System

In the 2012/13 Budget Communication, the Government announced that it would address the issue of tax reform as a means of broadening the tax base to include both goods and services.  To that end, a White Paper would be prepared and issued to serve as the basis for extensive public discussions and consultations.

The overarching objectives of the tax reform proposals in this White Paper are threefold, namely:

1. to secure an adequate revenue base in support of modern governance;
2. to establish a tax structure that promotes economic efficiency and stronger economic growth; and
3. to make the tax system more equitable.

As a means of achieving these objectives, it is proposed that a Value Added Tax (VAT) be introduced as of July 1, 2014 as part of a fundamental reform of the tax system.  In tandem, we also propose to:

• - effect the eventual reductions in import duty rates that will accompany The Bahamas’ accession to the World Trade Organization (WTO);
• 
  
• - reduce excise tax rates to compensate for the VAT;
• 
  
• - eliminate Business Licence Tax as currently structured; and
• eliminate the Hotel Occupancy Tax.

Read more...

Comments can be directed to taxreform@bahamas.gov.bs.

Perry Christie - like Hubert Ingraham ...has the chance to write his last chapter... ...Time will pass quickly ...and Christie will soon have to make his choices known

Changing political fates

A restless Bahamian electorate is becoming harder to read

BY BRENT DEAN
Guardian Associate Editor
brentldean@nasguard.com

After the Progressive Liberal Party (PLP) victory in May 2002, Bahamians were in love with their new leader.

Perry Christie could do no wrong.

When he mounted rally podia to the sound of R. Kelly’s “The Storm is Over Now” in that campaign, he was like a loved prophet coming to bring new times to a tired but hopeful people.  He won that general election by a landslide margin.

Five years later Christie and his PLP were defeated.

The man who defeated him was his friend and the prime minister from 1992 to 2002.  Hubert Ingraham came back as the anti-Christie.

While Christie, he argued, was lazy and inadequate, another Ingraham-led government would restore order to The Bahamas.  Ingraham won the 2007 general election.

Five years later, the man who was not good enough to lead was good enough again.  Christie was reinstated as prime minister.

The mood of the electorate in the modern Bahamas is very different than in the Pindling years.  Then, one well-loved leader was able to govern for 25 consecutive years.  Now we have had two consecutive one-term governments, and this latest crew of leaders has run into headwind.

The referendum loss for the PLP, despite the party officially saying it was not on a side, came after it won the 2010 Elizabeth by-election, the 2012 general election and the 2012 North Abaco by-election.  A declaration of upset came so soon after many expressions of support.

Politics and electorate of today

With an electorate now willing to change its mind so quickly, politicians should not take anything for granted.  They should also not misread their mandates.

The 2007 Free National Movement (FNM) government and the current PLP government each won just under 50 percent of the vote in the respective elections that brought them to office.  Both had comfortable margins, but not the overwhelming support that is needed to move controversial policies or legislation alone.

This may have been the fundamental problem with the gambling referendum.  A party with less than 50 percent of the support of the people moved forward with a vote on a divisive issue to a volatile electorate against established stakeholders such as the church.  Considering the modern Bahamian electorate as the same as the Pindling voters would cause miscalculation.

Fewer and fewer Bahamians love the PLP or the FNM.  Fewer and fewer Bahamians believe that our political class has the best interest of the people at heart.  There is suspicion and anger.  There is a belief that many simply want to lead in order to dispense the assets of the state to friends, lovers and associates.

The people are not innocent victims in this, however.  Assuming politicians to be modern pirates seeking loot, many Bahamians align themselves with whomever just for the time in order to get their contacts or their jobs.  Cynicism has set in.

When enough people feel they have not gotten theirs from the crew they voted for, they send for the others only to facilitate self-interest.

Navigating treacherous waters

The current mood of voters presents an interesting set of problems for the people who run the ‘Gold Rush’ administration.

For Christie, if he intends to retire before the end of this term it is easy and simple.  Wait for his full pension and then ride off into the sunset an even richer man – one who will always be taken care of by the state.  Politically speaking, he needs to do nothing but sit and wait.

But for the group including Deputy Prime Minister Philip Davis and Tourism Minister Obie Wilchcombe, men who want to be prime minister, it is crucial that the method is found to satisfy enough members of a cynical electorate to ensure the PLP wins again.

If Christie does go before the end of this term – and I don’t just assume he will – he may find the wannabe prime ministers in his Cabinet increasingly at odds with him.  A departing Machiavellian leader has no real interest in the future of the crew he leaves behind when all of his interests are already taken care of.  He can do as he pleases in his final days, making moves that are not necessarily in the best interest of them.

The would-be heirs will increasingly want to have a more direct hand in policymaking and governance if Christie is leaving because they want to ensure the party can win again, extending their time on the throne.

As the months go by, these men will want to know if the chief is going or staying.  They know that it cannot be assumed that the PLP will just win again, even though the FNM is without money and elements of the Ingraham fan club are tearing down the current party leader, Dr. Hubert Minnis.

To the potential PLP PMs the governing party needs successes.  The governing party does not need debacles such as the failed referendum.

Ingraham’s end may scare the future leaders of the PLP.  He publicly confirmed late in his term that he would run again and seek to be prime minister a fourth time.  Misreading his mandate from 2007 and full of belief that he was loved, Ingraham ran again in tough times and was rejected.  That rejection also swept out many senior FNMs.  Carl Bethel, Tommy Turnquest, Dion Foulkes, Desmond Bannister, just to name a few, may too have been retired for good with Ingraham.

When the boss just does what he wants, he can destroy you too.

Time

It feels like the general election was just a few weeks ago.  It actually is nearing a year since that clash.

These years of the PLP mandate will pass quickly.  And with each passing month, for those who seek to lead the PLP and The Bahamas, it will become increasingly urgent for them to know what Christie intends to do and when he intends to do it.

Our prime ministers are politically all-powerful in their parties.  They can’t be voted out internally.

I wonder what goes on in the mind of the prime minister.  I wonder whether he is tired and wants no more, or if he likes it so much that he just can’t give it up.  I wonder if he supports Brave Davis, his law and business partner, or if he seeks to hand the throne to another.  I even wonder if he has come to conclusions on these matters yet.  Only Christie can answer.

Christie is a wise politician who has seen it all.  He has witnessed up close how in recent years the fates of politicians have changed so dramatically so soon.

He, like Ingraham, has the chance to write his last chapter.  Time will pass quickly and Christie will soon have to make his choices known.

February 11, 2013

thenassauguardian

Caribbean Blog International

In reality, the Vote Yes lobby lost the gambling referendum because it had a number of powerful forces ranged against it: certain churches ...the official opposition party ...the most successful third party in Bahamian history ...and a former prime minister who commands an enormous personal following

A Victory For The Pharisees

By PACO NUNEZ

Tribune News Editor

pnunez@tribunemedia.net

 

 

 

IN botching the gambling referendum, Perry Christie and his Progressive Liberal Party dealt a serious blow to the prospects for liberalism and progress in the Bahamas.

 

The overwhelming “no” vote did more than ensure gambling remains illegal for Bahamians; it empowered a religious movement that is on a mission to suppress certain personal freedoms and insinuate itself into everything we do – from what we watch on TV, to what happens in our bedrooms.

 

Forget all the talk of preserving the country’s Christian roots. Those at the forefront of the Vote No movement represent a fundamentalism which harks back to a past that never existed, which seeks to establish something entirely new – a moral police state.

 

And now, even more than before, the “Save our Bahamas” pastors, the Christian Council, and their followers will believe they have a mandate to push their views on the rest of society.

 

In reality, the Vote Yes lobby lost the referendum because it had a number of powerful forces ranged against it: certain churches, the official opposition party, the most successful third party in Bahamian history, and a former prime minister who commands an enormous personal following.

 

And, those who either voted “no” or stayed home, did so for a variety of reasons. Church loyalty was certainly one of them, but there was also party loyalty, resentment that the promised gambling education campaign never materialised, and suspicion the referendum was really a reward for certain web shop bosses who donated to the PLP’s election campaign.

 

Also, a certain degree of apathy was in hindsight probably inevitable. Many Bahamians who might support legal gambling didn’t see the point of going to the trouble of voting for an activity they already engage in on a daily basis with no hindrance whatsoever.

 

But the pastors won’t see it that way. To them this will have been a victory for forces of conservatism and coerced conformity – proof that Bahamians overwhelmingly want to live under a religious regime.

 

Now that gambling is defeated, we can be sure that other pet peeves of the Christian Council will be next in the crosshairs; issues such as homosexuality, the showcasing of “immoral” films, performances by “unchristian” musicians.

 

We may even have another campaign defending the right of a man to rape his wife.

 

A few years ago, when the Bill to make marital rape illegal was introduced by the FNM administration, only to be denounced as immoral by the Christian Council, INSIGHT noted that “The public statements of Council members over the past several years have made it clear they feel social progress – defined by most of the western world as having to do with rights and democracy – threatens much of what they hold dear. After all many of them have become exceedingly comfortable in their roles as the self-appointed moral arbiters of the nation.”

 

Back in 2006, when the Play and Films Control Board banned the film Brokeback Mountain at the request of a group of pastors, local theatre director Philip Burrows said: “You have a group of people who are telling grown men and women what they can and cannot watch. I cannot understand denying people the right to make their own choices.”

 

Neither could the rest of the world. An Associated Press story about the ban was reprinted by hundreds of newspapers around the world, and brought widespread condemnation down on a country that has nothing to rely on for survival but its international reputation.

 

Then, as now, it was the government – the very entity charged with safeguarding our reputation – which opened the door to this kind of nearsighted and dangerous fundamentalism.

 

The fact that the abetment was unintentional this time around is no excuse.

 

Had there been a proper education campaign as promised, had the arguments for and against casino gambling at least been discussed, or had Mr Christie committed to banning anyone who broke the old gambling laws from ownership in the new industry, things might have been different.

 

Certainly, he would have neutralised the strongest arguments for voting “no” put forward by his political opponents, thereby making it a real liberals-vs-pastors referendum.

 

As it was, those of us who support the expansion of rights and personal freedoms were left with an impossible choice: vote “no” and support continued discrimination against Bahamians in their own country, or vote “yes” and run the risk of allowing the government to form a gambling cartel of campaign donors, to the exclusion of all other citizens.

 

Either way, you were voting against equal rights.

 

In making it so, Mr Christie and his colleagues are guilty of squandering a priceless opportunity and retarding the cause of progress for who knows how many years to come.

 

Gambling is in many ways, the last frontier in overcoming our colonial past.

 

Gambling is in many ways, the last frontier in overcoming our colonial past. It is the modern theatre of our civil rights struggle.

 

Amid all the moral, economic and other arguments, one fact is undisputed: a foreigner can come to this country and do something a Bahamian cannot.

 

That is no different from any other form of discrimination, be it assigned bus seats, separate schools, restaurants reserved for a specific group of people.

 

The Save Our Bahamas crew do have a point in this regard - if we really believe gambling is morally wrong, we should ban it outright, for foreigners as well as locals, and have the courage to suffer the economic consequences of taking a stand against hypocrisy.

 

The pastors, it should also be said, make no apologies for what they believe and do not hide what they stand for.

 

Meanwhile, the Progressive Liberal Party, by virtue of its very name, is supposed to be a force for progress and liberalism.

 

They have a lot of explaining to do.

 

What do you think?

 

Email your questions or comments to pnunez@tribunemedia.net, or join the conversation at http://www.tribune242.com/news/opinion/insight/

 

February 04, 2013

 

Tribune 242

 

Caribbean Blog International

 

Prime Minister Perry Christie says that he was surprised by the results of the January 28, 2013 gambling referendum

Christie Surprised By Gambling Referendum Results

By Sasha Lightbourne
The Bahama Journal







Prime Minister Perry Christie admitted he was surprised by the results of the gambling referendum last week.

Mr. Christie was speaking to reporters before he headed into his weekly Cabinet meeting yesterday.
“Yes I probably was surprised by the outcome in the sense that I thought it would be a much closer election,” he said.

“I was prepared for any outcome and I tried to evidence that. The matter is before the courts now so I won’t speak to that issue but we are prepared for whatever decision is made by the courts.”

Bahamians were asked to vote on two questions – “Do you support the regulation and taxation of web shop gaming” and “Do you support the establishment of a national lottery?”

Prime Minister Christie also refuted the fact that many felt he made a mistake by having the referendum when he did.

“You never make mistakes when you are deepening democracy,” he told reporters.

“I promised before the elections that I would have a referendum. I indicated I had no horse in the race. This thing swirled with controversy and it was what it was. The people voted and I acted upon the vote. It is now a matter for the minister of national security and the attorney general.”

The majority of constituencies across the country voted ‘no’ in both questions.

Up to press time last night 43,393 voted ‘no’ and 28,787 voted ‘yes’.

Bains Town and Grants Town and Centreville were the only constituencies that voted ‘yes’.

According to Acting Parliamentary Commissioner Sherlyn Hall, ballots from some of the constituencies took up to three hours to recount and added that as the figures rolled in it grew increasingly clear that based on the votes the Bahamians are giving two thumbs down to regulating any form of gambling in the country.

“For question number one the total number of votes, unofficial figures, were 30,767 who voted yes and for the same question those who voted no were 48,012,” he said last week.

“For question number two the yes total is 32,170 and the no votes were 46,961.”
The acting parliamentary commissioner added that the recount is a mandatory requirement set out in the Parliamentary Act.

It did not take very long for the results from last week’s Monday’s gambling vote to be known, coming out just 40 minutes after the polls closed.

February 06, 2013

Jones Bahamas

Caribbean Blog International 

Autopsy Report on the January 28, 2013 Gambling Referendum

By Dennis Dames

The so called gambling referendum is history, and a resounding no - is the order of the day.  Punch drunk and shell shocked is the yes crew - as they ridicule the opponents of web shop gaming, and a national lottery.

Who called the game in the first instance, and why were they so persuaded that yes to their questions of legitimizing web shop gaming, and instituting a national lottery would have prevailed at the end of the day?

The intelligence of the Bahamian electorate has been underestimated once more.  It is a known reality that gambling is not a productive enterprise for the masses; especially the poor and financially struggling brothers and sisters.

The number bosses and their millions were no match for a people who are demanding a productive economy where vision, industriousness, hard work,  dedication and the work ethic are the status quo.

The proponents of the gambling referendum questions are now blaming the church and opposition politicians for their scandalous defeat at the polls on January 28, 2013.  They are simply sore losers who believe that democracy is a one way street.

The number kingpins made a dreadful error by proving a partying electorate with food, liquor and good music from start to finish.  They had also tried to use their dirty cash to buy yes votes – to no avail.

The lesson of the gambling referendum is found in the following Aesop quote: Beware that you do not lose the substance by grasping at the shadow.

Caribbean Blog International

Kenred Dorsett, the minister of the environment and housing - said that he could not confirm a date for the oil drilling referendum ...as Prime Minister Perry Christie has yet to make a formal decision on the matter

Dorsett: No timetable for oil referendum

Minister committed, however, to building political consensus prior to vote



BY JEFFREY TODD
Guardian Business Editor
jeffrey@nasguard.com




The government has no specific timeline for an oil drilling referendum, according to the Ministry of the Environment.

With the country still buzzing from this week's gambling referendum, many Bahamians are wondering when oil exploration will once again be placed on the radar.

Kenred Dorsett, the minister of the environment and housing, said he could not confirm a date for the referendum, as Prime Minister Perry Christie has yet to make a formal decision on the matter.  However, he did note that the government is seeking to develop a more formal consensus on oil exploration before a vote goes to the people.

"I'm not sure if it will be a summer referendum.  I don't know when it will take place," he told Guardian Business yesterday.  "But I do hope there will be a consensus on the issue.  There are members on the other side that who tell me we should be drilling now.  I think, as a minister responsible, I am mandated to ensue there is a current balance, particularly as we look at those efforts."

He added that the government is "getting to the point" where some of the proposed regulations on how to remodel the industry may come to fruition.  After that, he told Guardian Business there would be a "broad discussion" on the issue of drilling in The Bahamas.

The minister's comments come shortly after business leaders expressed hope that the government would approach the oil drilling referendum "differently" than gambling.

While the "Vote No" campaign was victorious last Monday, observers noted that low turnout and general apathy impacted the democratic process.  The government was frequently criticized for being unclear in the referendum questions and failing to introduce specific legislation to back up the possible legalization of gaming.  The vote also became highly politicized, promoting rival parties to endorse opposing views.

"Oil drilling is not a moral or religious issue, it will be a matter of whether you can explain the economic advantages and technical reasons why the environment can be protected," said Richard Coulson, a well-known financial consultant.  "If those points can be explained, there should be no problem."

Peter Turnquest, the minister for East Grand Bahama, urged the government to bring forth legislation in the event of a yes or no vote for oil drilling to build a consensus in the House of Assembly.

After that, the government can embark a "period of education" for the general public.

In regards to public confusion and politicizing of oil drilling, Dorsett told Guardian Business: "I don't want that to happen."

But he stopped short in saying the government would bring forth specific legislation in the House of Assembly.

Guardian Business understands that the issue must be revisited by the prime minister before any decisions can be made on the future of oil drilling in The Bahamas.

February 01, 2013

thenassauguardian

Caribbean Blog International

The Free National Movement (FNM) had planned to implement a Value Added Tax (VAT) within “two to three years” ...if it had been re-elected in May 2012 ...says Zhivargo Laing

Fnm Wanted Vat In 'Two-Three Years'

January 25, 2013



By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Free National Movement (FNM) had planned to implement a Value Added Tax (VAT) within “two to three years” if it had been re-elected in May 2012, a former Cabinet Minister yesterday saying it would “not have been fooling around with a gaming referendum”.

 

Acknowledging that the Government’s finances were- and continue to be - on an unsustainable path due to heavy deficit spending during the recession, Zhivargo Laing, former minister of state for finance, told Tribune Business that an Ingraham administration would have targeted VAT implementation as “an urgent priority”.

 

He disclosed that another part of the FNM’s ‘fiscal rebalancing’ strategy would have been to “wean” the likes of Bahamasair and the Water & Sewerage Corporation off taxpayer subsidies, potentially through full or partial privatisation.

 

While former prime minister, Hubert Ingraham, ruled out any attempt at tax reform during his 2007-2012 administration, Mr Laing said its focus would have turned to this had it been re-elected to office.

 

And he also took a thinly-veiled swipe at the Christie administration’s seeming preoccupation with Monday’s gaming poll, suggesting the Government was being distracted from more worthy issues that merited its full attention.

 

“We knew that passing a VAT was going to be an urgent matter, so we would not have been fooling around with a gaming referendum,” Mr Laing told Tribune Business. “A VAT would have been an urgent priority by the Ingraham administration.”

 

He added that, if re-elected, an Ingraham administration would have moved speedily to release a ‘White Paper on Tax Reform’, seeking to “get that [VAT] done in two-three years”.

 

Reminded that the former FNM administration itself had examined the potential legalisation of web shop gaming, and what needed to be done to effect this, Mr Laing said that even if a referendum/poll was required, it would not have distracted any government he was part of.

 

“If there was [a referendum], it wouldn’t have taken precedence over that,” Mr Laing said in relation to VAT and tax reform.

 

He added that an Ingraham administration would have sought to continue what it started with the Bahamas Telecommunications Company (BTC), namely privatising state-owned entities - especially the loss-making ones - and getting them off the Government’s balance sheet.

 

“Whether it would have been privatisations representing some kind of private-public partnership or hybrid privatisations, the idea would have been to reduce the dependency of these entities on government subsidies,” Mr Laing told Tribune Business.

 

“It’s a huge part of the drain on the Government’s finances.”

 

Indeed, the Christie administration, through Michael Halkitis, the successor to Mr Laing in the Ministry of Finance, has articulated similar ambitions when it comes to eliminating the multi-million dollar taxpayer subsidies - running at $50-$60 million annually - to loss-makers such as ZNS, Bahamasair, the Water & Sewerage Corporation and Hotel Corporation.

 

The Government has also picked up where its predecessor left off when it comes to tax reform and VAT, and two other areas of focus identified by Mr Laing - better collection and enforcement of real property taxes, and a Debt Committee that is examining what can be done to reduce current and future debt servicing (borrowing) costs.

 

The almost-identical strategies, apart from privatisation and the timelines involved, lend credence to those who suggest that, in many cases, there are few policy differences between the FNM and the PLP - the main distinction being implementation and execution.

 

Mr Laing, meanwhile, acknowledged that the former Ingraham administration knew the fiscal deficits it was running - and corresponding increases in the national debt - were “unsustainable”.

 

“We did the kind of spending we did at the height of the recession as counter-cyclical financing,” he said. “We demonstrated what we would have done; revenue measures, spending cuts. To clear the fiscal deficit we were looking at a number of things.

 

“It was unsustainable, the level of deficits we were sustaining during the recession. We knew we cannot stay on that same path.

 

“We knew it would have an impact on our fiscal circumstances, and once the recession passed we started to take revenue measures, increasing taxes in some areas, cutting expenditure in some, and happened to be criticised by those people who refuse to do the same thing.”

 

Mr Laing also hit at the Progressive Liberal Party’s (PLP) criticism of holding a Mid-Year Budget between 2007 and 2012, suggesting its recent emphasis on next month’s announcement showed it had performed a policy ‘u-turn’.

 

“For five years they called it useless, unnecessary,” he added of the Mid-Year Budget. “I would have thought that after five years they would have abandoned that, and found a more creative and innovative way to do the public finances.

 

“This is supposed to be the smartest generation of people, with the smartest ideas, to turn this around.

 

“But this same set of people, who criticised us for spending, followed it up with even more spending at a $550 million deficit.”

 

Tribune 242

 

Caribbean Blog International