I would like to comment on the recent articles (The Nassau Guardian, 31st May) by former Minister of State for Finance James Smith and Minister of State for Finance Michael Halkitis. I fully understand Minister Smith 's concern over an IDB warning that the Bahamas could face a credit rating downgrade as a result of the delayed implementation of VAT and the comment by Standard and Poor's remark that the Agency will assess the "overall fiscal plan" when it makes a determination on how it will rate The Bahamas later this year. A downgrade by any of the rating agencies would result in a massive increase in the future cost of borrowing and would have impact even further the budget deficit of The Bahamas. The statement (Tribune, 30th May) by Minister Halkitis that the government's decision to not introduce across the board Customs duty reduction with the looming implementation of value added tax will prevent the government from "sinking further in debt" and avoid currency devaluation will just add further burden on the middle and lower classes. It will also increase cost of living. A large part of the Government's income comes from tourism and any increase in the cost of living would have a negative impact on tourism. Prices of hotels and restaurants in the Bahamas are already high compared with other Caribbean countries. A devaluation of the Bahamian dollar would have a similar impact as The Bahamas import most of its goods from abroad. As seen in other countries keeping increasing taxes will depress the economy and reduce the purchase power of the lower class. While a moderate increase in taxes may be inevitable the Government should focus on reducing public spending and collect outstanding current taxes. Also, on the longer end, the Government should make some effort to increase domestic productivity. If the Government wants to reduce a massive exodus of people from the family island into the capital, they should offer them some job opportunities.
giacomo says...
The government should start collecting all the outstanding property taxes which amounts to millions.
On DWW
Posted 7 August 2018, 12:07 p.m. Suggest removal
giacomo says...
Dear Sirs,
I would like to comment on the recent articles (The Nassau Guardian, 31st May) by former Minister of State for Finance James Smith and Minister of State for Finance Michael Halkitis. I fully understand Minister Smith 's concern over an IDB warning that the Bahamas could face a credit rating downgrade as a result of the delayed implementation of VAT and the comment by Standard and Poor's remark that the Agency will assess the "overall fiscal plan" when it makes a determination on how it will rate The Bahamas later this year.
A downgrade by any of the rating agencies would result in a massive increase in the future cost of borrowing and would have impact even further the budget deficit of The Bahamas.
The statement (Tribune, 30th May) by Minister Halkitis that the government's decision to not introduce across the board Customs duty reduction with the looming implementation of value added tax will prevent the government from "sinking further in debt" and avoid currency devaluation will just add further burden on the middle and lower classes. It will also increase cost of living. A large part of the Government's income comes from tourism and any increase in the cost of living would have a negative impact on tourism. Prices of hotels and restaurants in the Bahamas are already high compared with other Caribbean countries.
A devaluation of the Bahamian dollar would have a similar impact as The Bahamas import most of its goods from abroad.
As seen in other countries keeping increasing taxes will depress the economy and reduce the purchase power of the lower class.
While a moderate increase in taxes may be inevitable the Government should focus on reducing public spending and collect outstanding current taxes.
Also, on the longer end, the Government should make some effort to increase domestic productivity. If the Government wants to reduce a massive exodus of people from the family island into the capital, they should offer them some job opportunities.
On Avoiding devaluation reason for lack of cuts in duty
Posted 1 June 2014, 10:34 a.m. Suggest removal