Tax reform in The Bahamas ...particularly the introduction of a brand new system of taxation ...cannot succeed without the advancement of a focused and widespread education campaign

DNA Press Release - VAT Education BEFORE Taxation!

Value Added Tax (VAT) experts hired to advise the Christie administration on the implementation of the proposed tax regime have, this week, confirmed the long standing position of many local business owners as well as the Democratic National Alliance (DNA). That position? That tax reforms in the Bahamas – particularly the introduction of a brand new system of taxation – cannot succeed without the advancement of a focused and widespread education campaign.

According to comments attributed to both John Shewan and Don Brash which ran in the local dailies this week, the government of New Zealand, which has arguably had the greatest success in VAT implementation, attributes the success of that initiative in part to their commitment to an 18 month educational program.

Unfortunately for Bahamians, we have received no such commitment from this administration. For months, the government, while on one hand promising to launch such an educational campaign, has on the other hand, allowed the uncertainty associated with VAT to negatively impact plans for expansion within the private sector. Even now, just 63 days from the originally proposed implementation date, this administration has yet to table the accompanying legislation. They have instead chosen to bully local business owners into compliance with a system that very few people currently understand.

The Democratic National Alliance finds it particularly interesting that some of the recommendations from the government’s highly paid consultants are in fact similar, if not identical to the suggestions offered by members of the local business community. Outside of the obvious recommendation for a properly planned and executed education campaign, the tax experts – according to media reports – also suggested that the government finalize its tax design before beginning its VAT campaign in earnest.  So far, unfinished versions of the government’s tax plan which includes a list of exemptions which may or may not be part of the final plan have been leaked through the media and allowed to further muddy the waters on this matter.

The DNA asserts that this administration could have easily saved itself thousands of dollars in consultancy fees by simply listening to the collective voice of the men and women responsible for driving the local economy.

Also of note was the position that a Freedom of Information Act is imperative to the successful implementation of a VAT system. The DNA has long called for the passage of this key piece of legislation as a means of facilitating the free flow of information to the public as well as keeping our elected officials accountable.

The DNA firmly believes that like in New Zealand, the passage of such legislation in the Bahamas will work to establish a renewed trust and faith in this government’s plans for fiscal reforms. While the Democratic National Alliance believes in, and is committed to tax reforms, we simply cannot endorse the government’s handling of this effort thus far.

We hope now, that after hearing the recommendations from an outside source, the Christie administration finally takes the necessary steps to ensuring that any fiscal reforms enacted are implemented with a view to stabilizing the economy and improving the government’s relationship with the private sector.


Branville McCartney
DNA Leader on Facebook

April 29, 2014

Value Added Tax (VAT) and Tax Reform in The Bahamas

By Dennis Dames:

We, the Bahamian people must realize that we cannot continue to borrow more than we are collecting in taxes.   We should appreciate as one people that something has to give now, as it relates to getting our fiscal house in order.  Either we increase taxes, or cut spending significantly.  We do not have years left to answer that question, and to take sound and prudent fiscal action, my brothers and sisters.

So, that is why we are debating the impending institution of value added tax in The Bahamas; to help us to live by a balanced budget until further notice.  This Bahamian has already accepted the reality that we need some kind of tax reform in The Bahamas, so that the government could collect more money on our behalf, in order to contain the outrageous deficit spending – year after year.

Our National debt is projected to officially double in the seven years; from $2.4 billion in July 2007, to $4.9billion to June of 2014 – coming-up.  The fiscal deficit for the past two years is reported to be more than $500.00 million.

It is a pity that the education process on the principles of value added tax (VAT) did not begin when the Bahamian government had signed on to the various international agreements years ago, like: the Economic Partnership Agreements (EPAs) with the European Union, and the World Trade Organization (WTO).   We know it was coming nonetheless, because the Progressive Liberal Party (PLP) and the Free National Movement (FNM) made it known that value added tax (VAT) is in the pipeline.  We went through the 2012 general election - recently, and the electorate voted overwhelming for the PLP and FNM.

So, what’s the problem?  Who’s shocked, who’s surprised, who’s outraged and who didn’t know that value added tax (VAT) was on the horizon?  The FNM has reminded us recently, that if they were elected in 2012, they had plans to employ value added tax (VAT) by 2015 or in thirty-six (36) months; the PLP plans to install value added tax (VAT) by July 2014 or in twenty-two months of their 2012 general election victory.

I think like the pundit, Dr. Gilbert Morris in the Turks and Caicos Islands, when he sounded in that nation’s context, that it was not that the TCI people are against value added tax (VAT), but it was felt nationally, that more time was needed to prepare the people for the realization of value added tax (VAT).  The United Kingdom was seen to be rushing the brush and had to eventually relent, in the wake of public pressure from every political house - and cancel the Turks and Caicos Islands’ value added tax kick-off date of April 01, 2013.

Our Prime Minister has said publicly, that he is open to delaying The Bahamas’ value added tax (VAT) execution date, which is scheduled for July of 2014.  It’s a great gesture, Mr. Prime Minister.  Now it’s time for all Bahamian people to face the music of looming tax reform in our country, and let’s start dancing and debating.  Our children and the generations yet unborn, deserve to enjoy the fruits of our wisdom.

November 13, 2013

Caribbean Blog International