Opposition Dismisses Government Reasons For VAT Hike
Jun 26, 2018 - 6:45:35 AM
Nassau - Opposition Leader Philip ‘Brave' Davis dismissed the FNM Government's reasons for VAT hike during the recent budget presentation, saying it will still place a severe burden on the public and stunt the nation's economic growth.
Davis criticized the new budget calling it unconscionable and unbearable. He said it represents 60% increases in VAT, an unprecedented increase in Immigration fees and other unwarranted tax hikes like: 5% tax on deposits and withdrawals of gaming customers, increase in police record fees, increase in fingerprinting fees for casino employees, increase in labour certificate fees and introduction of new port fees.
This, he emphasized, is being proposed at a time when the economy is experiencing only marginal growth following the severe negative impact of protracted worldwide economic recession.
“This budget has no philosophic under pinning, no national developmental direction, no compassion and therefore no soul,” he said. “The outcry in the public domain and the level of dissatisfaction expressed by the people about this budget bear this out very clearly.”
As has been confirmed by local economists and financial experts and people of common sense, Davis said, these repressive tax measures will severely impact the poor and the middle class representing the majority of Bahamians. Furthermore, Davis is certain this impact will spread to consumers at large, will handicap business growth, significantly increase the cost of living, goods and services, which is already among the highest in the world.
“In my humble opinion, the broad focus of the 2018/2019 budget should have been on encouraging and incentivizing investments to grow the economy, increase employment and thereby increase government revenue without the burden of additional, redundant taxes and increases.”
The Opposition Leader said the three principle reasons given by the government for the VAT hike is devaluation of currency, to avoid downgrading by foreign credit rating agencies and to decrease the country deficit GDP/Debt Ratio. However, Davis said the Bahamian dollar is pegged to the US dollar and is not a floating currency. Devaluation, he added, is a non issue. “Proper advice from those who know will confirm this, hence not a reason for raising VAT,” he said.
The Cat Island, Rum Cay and San Salvador MP said The Bahamas has been able to maintain its investment grade rating with Standard and Poor, but not with Moody, whose decision he is sure, was based on increased expenditure on post hurricane clean-up and repairs and their belief that Bahamar would not open. “This country has recovered from the devastating hurricanes, Bahamar is fully opened and therefore, the threat of a down-grade no longer exists,” he said.
He noted how the FNM government proclaimed to the media that they had cut the fiscal deficit in half in their first year. But, this “sleight-of-hand” and intellectively, dishonest maneuver Davis said, suggests that if the default under the PLP was $600 million, it is simply the ‘ligitimate’ cost of governing and not waste, mismanagement or excessive spending as the FNM claimed.
“I submit that the FNM government conveniently paid $386 million in bills before the end of the 2017/2018 fiscal year to make a political point,” he said. “That is to manipulate the fiscal affairs of the country to fit their pre and post election campaign rhetoric and narrative of PLP mismanagement.”
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