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Bahamian Politics Last Updated: Feb 13, 2017 - 1:45:37 AM


Peter Turnquest on Statement on Value Added Tax Implementation
By the Office of the Shadow Minister of Finance
Dec 30, 2014 - 5:34:04 PM

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Freeport, Grand Bahama Island - The following is a statement from Peter Turnquest, member of parliament for East Grand Bahama and FNM Deputy Leader:

After months of denial, it appears that the Government is finally prepared to admit that the Value Added Tax program has been rushed and that it will not be fully prepared for implementation on January 1st, 2015, leaving the general public to question the ability of the Government to effectively manage this significant and important change to the country’s tax structure.

While the Government will force the initiation of this increase in Bahamians cost of living, it is doing so without due consideration to the circumstances of ordinary Bahamian families who are currently suffering from a continued slow economic recovery, where jobs are scarce despite the failed promise of 10,000 new jobs and mortgage arrears continue to rise as many families lose their homes, their most significant lifetime investment. To date, there has been no announcement of any plans for Social Services to address the specific impact that VAT will place on the poor in our country.

The education process and promulgation of VAT Rules has been late, underfunded, and sloppy leaving many questions unanswered and the institution and instruments fundamental to the effective implementation of the regime, yet to be appointed or enacted. Their education campaign spent more time trying to argue why VAT was necessary than it did preparing us for VAT. Every explanation only begged even more questions.

On the eve of the tax, a VAT Comptroller has still not been appointed forcing the Financial Secretary to do double duty as “Acting VAT Comptroller” for an undefined period. This is unacceptable as the Financial Secretary (a competent individual) is inherently in conflict with his duty and responsibility to the Ministry and Ministers’ of Finance.

The VAT Court has not been announced as required by the legislation. Revelations over the past two years in respect to Real Property Tax arrears gives us a good indication of what will happen if the Government fails to set in place the proper enforcement mechanisms before the commencement date. If the Government lacks the political will to ensure the law will be enforced and the institutions are in place to execute, I fear we will find ourselves in a similar state, with the elite being exempt from handing over Government taxes while average consumers and law abiding business carry the brunt of the cost as usual.

The VAT Rules continue as a work in progress, a moving target to be sorted out on the fly. Faced with consistent complaints from various industries over the late and incomplete rules and guidelines, the Government has been forced to admit recently that the rules have yet to be finalized. This is no way to execute such a significant change in our tax structure and again points out the Government’s failure to properly plan and consider the larger Bahamian constituency in developing their plan to forcefully redistribute productive private investment capital to its unproductive and unsustainable PLP Government programs. Unbelievable!

The public would recall that Dr. Minnis, Leader of the Opposition, has called upon this Government not to implement any tax that will be unduly burdensome on the

poor or cause them to carry a disproportionate share of the tax burden. VAT on electricity, gasoline, private health care and basic food items is considered by many a regressive tax and an unfair burden on the poor. It raises the question of accountability and fairness in tax policy.

Lower energy bills were an election promise but rather than implement their long announced "energy policy", they have asked Bahamians to shoulder the burden of new taxes on electricity without putting through the promised reforms to make that burden bearable. It is worth noting that even the wayward chairman of BEC was against his own party on charging VAT on electricity as was several other PLP Members of Parliament who in good conscience could not support this regressive policy. One such MP even went as far as to say that this VAT will result in a general election loss by the PLP if implemented in the manner contemplated.

The PLP said they are for Bahamians...but they are unaccountable to Bahamians. They have given us what we never asked for but have not given the things which they promised. The PLP said they believe in Bahamians....but can Bahamians believe in the PLP?

This government want us to balance our pocketbooks but doesn't want to balance theirs. They want us to cut back on spending but what cuts are they prepared to take? They wanted to send small business owners to jail for not paying taxes but when their people didn't pay taxes or power bills - no big deal! They want to take your money....but they don't want to tell you how they plan to use it. They have failed to amend or enact the Freedom of Information Act passed under the last FNM administration and to propose a Fiscal Responsibility Act, which the government's own New Zealand consultant said should have come WITH the VAT. They don't believe in Bahamians....and they apparently don't believe in their own foreign consultants either.

Without this crucial legislation, how will Bahamians be able to determine and ensure that any VAT revenue is spent to reduce the national deficit as promised rather than used as another slush fund as has been done all too often by previous PLP government administrations? To put it bluntly, government should make sacrifices

Equal to the sacrifice it expects of Bahamians and legal residents.

Despite the challenges before us, I continue to have faith in our wonderful country and its resilient people as we adjust to the challenges this government continues to place before us. My party will continue to advocate on your behalf and challenge the government to put your interests first in 2015 and beyond. On behalf of my family, I wish you all a Happy New Year.


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