By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

PROGRESSIVE Liberal Party leaders said if successful in the next general election they will reduce value added tax to ten percent for one year as part of an economic plan that involves supporting a minimum wage increase, significantly expanding social assistance in the country and reducing the cost of energy by 30 percent.

PLP leader Philip “Brave” Davis and deputy leader Chester Cooper unveiled their economic plan at The Balmoral Club yesterday. They were accompanied by candidates who have been ratified for the next general election.

Mr Cooper said a Davis administration would decrease VAT for one year, after which the rate would be reassessed.

“This is not a huge difference,” he said, “but it will put consumers in a position to afford a little more of what they need to get by, which will help get the economy going again. The government receipts are likely to increase as more transactions will yield more VAT payments.”

Although Mr Cooper said VAT will be reduced to 10 percent “across the board,” it is not clear if the party plans to remove VAT exemptions from breadbasket and other items. The party has traditionally advocated for maintaining as few exemptions as possible so as to keep the rate low and broad.

Mr Cooper said the PLP would recommend to the National Tripartite Council that the minimum wage be increased to $250 per week in the private sector.

“Our goal is to phase in a liveable wage,” he said, “so that everyone who works is able to live with dignity and in a way that is acceptable in a modern Bahamas.”

Asked about the consequences of increasing the minimum wage at a time when businesses are reeling from the COVID-19 pandemic, Mr Cooper said PLP officials have analysed the matter.

“We looked at what happened when the previous PLP administration increased the minimum wage by 40 percent,” he said. “We are comfortable that what will happen as a result is small businesses will have more money, the economy will grow, there is more money in circulation, the government will in fact receive some taxes back as a result of more money in circulation, (and there will be) more money in spending by the persons with $250. We are committed to a liveable wage because we believe that every Bahamian ought to be able to live in dignity. We don’t just believe that it is good financial modelling, we believe it’s the right thing to do.”

Mr Cooper said the party will aim to reduce the cost of energy by 30 percent during its term “by mobilising a comprehensive plan”.

“This will include targeting 30 percent renewables on the grid by 2030 (which) is consistent with our 2013 national energy plan,” he said.

“Finally, the government can bring immediate relief by addressing the arrears owed to many government vendors and the salary arrears owed to public servants.

“By first stabilising the public finances, and then stopping the waste and the economic mismanagement currently underway, we can and must bring immediate relief to the many thousands of ordinary Bahamians who are desperate to move forward with their lives,” he said.

Mr Cooper said a PLP administration would boost housing assistance.

“Already too many Bahamians are sleeping on friends’ floors and in cars,” he said.

“We will work with tenants and landlords to reschedule rent payments in line with people’s short-term ability to pay, providing some breathing room until the economy recovers and avoiding a severe homelessness crisis.

“We will also increase funding to social assistance for rental assistance.

“Where landlords are relying on rent to pay mortgages, we will work with lenders to reschedule their payments to avoid defaults.

“We will work with banks to keep home-owners in their houses, delaying a portion of mortgage payments for qualifying individuals until the economic recovery is underway. Our main objective is to avoid allowing the crisis in homelessness to grow.

“We will implement additional immediate relief measures for the islands of Abaco, Grand Bahama and Ragged Island as they continue to rebuild after devastating hurricanes.”

Mr Cooper and Mr Davis were pressed on how they will pay for their ambitious plans given the already precarious state of the country’s fiscal affairs.

“There is no need at this point to contemplate new forms of taxes,” Mr Cooper said.

He added that, through its plans, a Davis administration would reap revenue “upwards of $250 million”.

He said the PLP would do a rapid assessment of the country’s finances “to know the true state of things” within its first 15 days in office.

A Davis administration would revive the Revenue Enhancement Unit “to ensure that everyone pays their fair share of taxes,” he said.

He added: “Under the previous PLP administration, this unit collected an average of $30 million per month.

“We will ensure that high-end properties pay the real property tax that they’re legally required to. We will also ensure that commercial and foreign-owned properties are on the register, and properly valued for tax purposes.

“To bring in more foreign currency, we will also move rapidly to collect revenue from international overflights.

“We will also look to secure carbon credit payments for our natural resources, especially those such as mangroves and sea grass, which acts as natural carbon sinks for the rest of the world. “And we will fast-track and incentivise those foreign and domestic investments which can yield the most significant value.

“Apart from the short and medium-term benefits to the public finances, these revenue-raising initiatives will strengthen our negotiating position when we have the first opportunity to restructure the national debt in 2024.”

Mr Cooper said the PLP will once again embrace the National Development Plan which was drafted under the Christie administration.

“This is the most robust strategic guide ever created to support the development of our country. Despite the shocks from Hurricane Dorian and the COVID-19 pandemic, it is still the sturdiest guide to where we want to be and how we should get there. Our economic plan marries the practical realities of our current situation to the vision and recommendations set out in the National Development Plan and Vision 2040,” he said.