PM: Bahamas tax level one of world's lowest
By ALISON LOWE
Tribune Staff Reporter
alowe@tribunemedia.net:
THE level of tax taken in by the government each year remains "one of the lowest in the world" and simply "cannot cut it" in the long term, the Prime Minister said yesterday, as he defended tax increases being imposed in this year's budget and warned that more substantial changes will be required in the future.
Prime Minister Hubert Ingraham said that the country's low-tax status remains the case "notwithstanding the increase in taxes" the Government is implementing to shore up its revenue this year, such as those on cars, local beer, tourism and domestic retail banks.
He said that the Government currently collects the equivalent of 18 per cent of the country's gross domestic product in tax, comparing this to the tax collected in other nations such as Singapore (23), St Lucia (29), Trinidad and Tobago (30), Jamaica (30) and Barbados (33).
"Notwithstanding the increase in taxes that we are putting in, The Bahamas has one of the lowest rates of taxation in the world. That's notwithstanding all of the islands and services we have to duplicate. You know how easy it is to run a Barbados with a similar population (size), with one island, one set of high schools, one set of primary schools, one set of roads, one set of electricity to generate?
"But while we are expensive to operate as a country, we're only getting around 18 per cent of Gross Domestic Product in tax. That is not going to cut it. That cannot cut it. We are hoping to raise that to 19.7 per cent in the coming year. That is optimistic, as I said."
Mr Ingraham complained that Bahamians "demand all of these services but are not prepared to pay the taxes" that are required to sustain them.
And in this regard, pointing to more sweeping changes to the way the government collects its revenue and from where, Mr Ingraham said that the government of The Bahamas will "one day have to be prepared to say to the public of the Bahamas that the current tax system is inequitable and unfair and do something about it."
He added that Bahamians tend to "demand all of these (government) services but are not prepared to pay the taxes."
"Barbados has excellent social statistics. But the people pay," he said.
June 03, 2010
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