EDITORIAL: Get ready to pay extra in fees

THE devil’s in the detail, so they say.

When the PLP was on the campaign trail, a reduction in VAT rates was very much on the party’s hymn sheet. The removal of breadbasket items from VAT exemption once they got into power? That didn’t get mentioned so much, but that’s what we got.

Back when the Budget was being touted, questions were raised about how the PLP administration would find where the income would be coming from, Minister for Economic Affairs Michael Halkitis was very firm in saying there would be no new taxes as it would be “counterproductive” to economic recovery.

In May, he said: “We think that we can get a substantial amount of funds by improving our collection.”

He added: “We’re still in recovery mode from COVID and so our view is it’s better to keep the taxes as they are, improve the administration and focus on growing the economy.”

Which brings us to today’s Tribune, in which we report that the government intends to raise an extra $90m from increasing user fees paid by Bahamians for a variety of public services.

Of course, that raises the question of when is a tax really a tax? A tax is a compulsory payment by a taxpayer, while fees tend to be voluntary – but how voluntary will some of these fees truly be?

For that, we have to wait to see where the charges rise. We don’t know yet where such fee changes may come – but it could be in areas such as the Road Traffic Department for driver and vehicle licensing, inspection and registration fees, or perhaps over at the Registrar General where birth, marriage and death certificate fees might come under the microscope, as well as perhaps company registration fees and incorporation fees. Police character certificates and immigration processing fees might also be included.

Call it a fee if you like, but the hole in your wallet will be the same size as if you call it a tax.

And we suspect Mr Halkitis will find that extra costs from fees are just as counterproductive as extra costs from taxes.

Some of the thinking about fees is interesting – such as the fee to expedite passport renewal in a single day. Some would say that’s a fee that is an extra for those who can afford it so it’s not an increased burden for those who can wait – but then again there’s the question of whether it’s fair to have a two-tier system. If the job can be done in a day, why have people been left to wait for weeks and months previously?

As for overall taxation, the stated goal of increasing the Treasury’s income to the equivalent of 25 percent of gross domestic product within four years is a sure sign of increased costs ahead.

It would be interesting indeed to know where such rises are planned – they certainly weren’t in the party’s manifesto at election time.

As to that $90m tag on the expected income, to reach that sum must mean that the government has priced out areas in which it would raise funds from increased fees – but the information about where exactly is being played close to the administration’s chest.

The thing is, after seeing the impact to our economy of first Hurricane Dorian and then the pandemic, most people would recognise that our country isn’t in the greatest financial shape. If we need more money in the public purse after, for example, all the costs associated with feeding people during the pandemic who were left without jobs, that’s understandable.

So just play it straight, tell us what the government needs, and tell us how it’s going to get it.

Instead, we face an uncertain list of possible extra fees – at the same time as the government is adding an extra 200 jobs in the tax department anyway. It might make people wonder how far that extra $90m will go.

We have argued often in this column about the need for transparency – but it’s not just a need, it’s also a benefit. But once parties start on a path of not quite explaining the whole picture, it does make people wonder what else isn’t being told.

So be clear with everyone – the money’s going to be coming out of their pockets.

Comments

birdiestrachan says...

The bread basket VAT free was a farce flour and cooking oil benefits bakers and hotels also fast foods there were no fruits or vegetables or juice poor people also deserves these items 10% VAT is better the government will announce the increase

Keeping the government accountable is good perhaps if the same applied to the
FNM GOVERNMENT including the FNM papa they would have done a better job

Posted 24 August 2022, 8:47 p.m. Suggest removal

Sickened says...

FNM's were calling for accountability very loudly while the FNM were in power FACT! You said above that accountability is only good if the FNM does it. Can you please think like a Bahamian and insist on fully accountability regardless of who's in power? Please... for once?

Posted 25 August 2022, 9:31 a.m. Suggest removal

IslandWarrior says...

LinkedIn = VAT 10%
Kaspersky Total Security = VAT 10%
Grammarly = VAT 10%
Natural Reader = VAT 10%
MS Office = VAT 10%
Advanced SystemCare = VAT 10%
ZOOM = VAT 10%

This year I would be paying, on average, $140 - $180 in VAT fees to update my software for PCs in the Bahamas. Will the Davis Gov also Tax my vacation, car rental, hotel and my vacation spending? Will I hear from a server in a Frankfort Restaurant that "your food has an additional 'end total' VAT fee from the Bahamas Davis Government of 10%? Tell me it isn't so?

Posted 25 August 2022, 12:27 a.m. Suggest removal

ThisIsOurs says...

This 90m will all be for naught. They'll have to tax again in a year to raise 180m to account for the 90m they needed originally plus the 90m they overspent when they didnt realize theyd already spent 90m.

2wks before school is set to open Alfred Sears cant give us a simple breakdown of school repair expenses that he should have known the total of from May before he issued the first contract. Poor administration. Poor governance. This allows them to continue spending then fake ignorance that the budget doubled

Posted 25 August 2022, 6:10 a.m. Suggest removal

Sickened says...

This 90 million will almost cover the cost of the new softball stadium when it is completed in 4 more years.

Posted 25 August 2022, 9:33 a.m. Suggest removal

birdiestrachan says...

60% increase in VAT that is FNM they want pats on the back for their so call bread basket items which everyone buys

Posted 25 August 2022, 8:48 a.m. Suggest removal

Sickened says...

Okay dunce... name me a few grocery items that ONLY poor people eat and which should qualify for your breadbasket items?

Posted 25 August 2022, 9:36 a.m. Suggest removal

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