Tuesday, June 3, 2014
By KHRISNA VIRGIL
Tribune Staff Reporter
kvirgil@tribunemedia.net
MICHAEL Halkitis, State Finance Minister, yesterday defended the Christie administration’s 2014/2015 fiscal plans saying detractors have stretched its interpretation to cause “unwarranted fear in the minds of the public”.
Mr Halkitis reiterated the government’s intent to review a selective and targeted list of reductions to tariffs and excises that are justified. He told The Tribune last week that changes in this regard would be made closer to Value Added Tax (VAT) implementation now slated for January 1, 2015.
He refuted claims by the Free National Movement that the government will ultimately double tax Bahamians, but he noted that VAT at a rate of 7.5 per cent will not generate the levels of gross revenues that had been forecast.
“Some, in certain circles, have wilfully stretched the interpretation of the (Prime) Minister’s words in order to instil unwarranted fear in the minds of the public,” Mr Halkitis said. “And that, simply for unvarnished, unabashed and cynical political purposes or other self interest. That is blatantly irresponsible. What has been said is that VAT and tax reform will result in the so-called double taxation of Bahamians.
“Given the government’s fiscal needs and for the sake of prudent and conservative fiscal planning, no wide-scale reductions in tariffs and excises are being announced at this time. That in no way says that there will be no tariff and excise cuts whatsoever. It says no wide-scale cuts now.
“The reality is that VAT will take effect next January, fully seven months from now. During this period, we will, of course, engage in debate on the VAT Bill and the government will be looking at a selective and targeted list of reductions to tariffs and excises that are warranted and justified.
“The Budget also stated that exemptions would be tightened. Nowhere in the document was it stated that there would be no exemptions whatsoever. In fact, I can think of no country in the world that has a VAT regime with not one single exemption.”
While addressing the efforts to restrain expenditure, Mr Halkitis explained to Parliamentarians that the government undertook a partnership with local car dealers to purchase a fleet of new vehicles. The fleet of vehicles inherited by the Christie administration, he said was aged, leading to higher maintenance, fuel costs and inefficiencies in operation.
“In order to address this issue, the Ministry has partnered with local car dealers and developed a leased vehicle programme. The programme has allowed the Ministry to meet its statutory obligations with vehicles for judges on a timely basis, with annual cash savings for this segment of the vehicle population in excess of $350,000. That will also result in a reduction in maintenance charges.
“Overall, the Ministry has saved in excess $1m in cash outlays in respect of vehicle acquisition costs. This is an amount that would have been added to our total debt and would have further escalated the dollar amount of what would have had to be budgeted in interest expenses this coming fiscal year,” he said.
A public tendering process is now underway for the government to renew its fleet of work trucks. Mr Halkitis said the wear and tear on these vehicles and the fact that most will be assigned to the Family Islands make leasing uneconomical for car dealers.
Comments
jlcandu says...
Mr. Halkitis,
If the PM meant to say that your party was considering reducing some customs duties as of January 1st, why didn't he just say that? Everybody listening to his long, protracted and full of crap budget speech interpreted his comments to mean just what he said -- that there would be no cuts in duties until the next budget year.
Get off your high horse and stop blaming this on the FNM. Anybody that was intelligent heard the same thing as the FNM. And in light of the foregoing, the "detractors" were exactly right about double-taxing Bahamians.
Posted 3 June 2014, 12:30 p.m. Suggest removal
Honestman says...
Mr. Halkitis. You are part of a government that lied to the people over a referendum. You are part of a government that continues to conceal important information from the general public and refuses to enforce the Freedom of Information Act. You are part of a government that refuses to populate a civil service at great cost to the Country. You are part of a government that cannot be trusted, period. Thus, you speak as a man without authority.
Posted 3 June 2014, 12:51 p.m. Suggest removal
proudloudandfnm says...
Halkitis needs to retire from politics. He's really hurting himself with all of this lies and nonsense. Dude looks like a puppet for the worst PM of all time. PATHETIC. Go back to private life son, you look like a complete fool in politics...
Posted 3 June 2014, 12:51 p.m. Suggest removal
sheeprunner12 says...
Halkitis........... you have accounting training.......... please use it and stop trying to justify stupidity that comes from a lawyer masquarading as a Minister of Finance................ SMT
Posted 3 June 2014, 2:09 p.m. Suggest removal
Reality_Check says...
God only knows why Halkitis continues to prostitute himself for Christie. This poor fella has sold his soul to the devil and now probably (like Christie) believes most of the diatribe that parts from his lips. A real shame to see such a young fella allow himself to be so used and abused to the point of self-destruction; whatever moral character and higher political promise he may once have had has been squandered....and for what?!
Posted 3 June 2014, 2:45 p.m. Suggest removal
ThisIsOurs says...
UNWARRANTED FEARS??????????????????..My finger hurting from all the question marks. What could strike more fear than the looming threat of devaluation that you warned us about a day ago?
Posted 3 June 2014, 3:11 p.m. Suggest removal
ohdrap4 says...
Calm down folks, there is no double taxation.
All I see in the budget is "Revenue Enhancement".
Posted 3 June 2014, 3:33 p.m. Suggest removal
BayStreet23 says...
The fiscal state of the government over the next 5 years is very concerning giving the following:
- The pending Pension Bill that would mandate that all employers provide pension to workers (including the government), however, I am unsure if this includes contract workers (which may lead to a significant increase in contract workers), increasing the pension liability of the government
- The National Health Insurance Plan that the government announced will be implemented (potentially adding hundreds of millions of dollars to the government's expenditure)
- Interest payments on the $200m borrowed for the Defense force boats in addition to the $1.5 billion ($300m * 5 years) that is estimated to be borrowed over the next 5 years).
- The potential economic slowdown of VAT, and
- Union pressure from Teachers, Police, Customs and Immigration to increase salaries
Whomever is the government during this time will have a very difficult term and a further ratings downgrade appears likely. The only thing that may bail out the government are a major oil discovery within the Bahamas or a drastic reduction in the oil price (limiting inflation). There is also the unforeseen foreign investments or events that can assist. Time will tell.
Posted 3 June 2014, 6:11 p.m. Suggest removal
John says...
The problem here is that the standard of living has dropped for most Bahamians over the past 7-10 years. Many don't see themselves as being any better off or not even living at the same level as they were a decade ago to justify additional or new taxes. In fact most feel they are worst off now. Some cannot afford medical care, children had to be taken out of private schools, some lights are off, others cannot pay their mortgages, some lost jobs, others saw their businesses close down, married kids had to move back in with parents and young men being slaughtered around the clock. So the government needs to cut the pork and stop the talk..be it fresh pork, salt pork or hog pork.
Posted 3 June 2014, 10:25 p.m. Suggest removal
carlh57 says...
So, apparently Mr. Halkitis, anyone with 1/2 a brain who 1) asks questions regarding any government sponsored initiative, 2) demands accountability, 3) tired of lies from their officials etc falls into those "certain circles" or "self interest" category you talk about.
Maybe one easy solution for your problems is to answer our questions, be accountable and care for your fellow Bahamians!
Posted 4 June 2014, 9:01 a.m. Suggest removal
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