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Last Updated: Feb 6, 2017 - 2:32:04 PM |
Livingston Ferguson, Senior Customs/Revenue Officer, Ministry of Finance (Right) and Ministry of Finance official Lucine Mingo address teachers about the impending implementation of VAT at The Government High School yesterday during a session of their professional development workshop. (Photo by Derek Smith, Jr.)
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The Bahamas' tax system is antiquated and can no longer support a growing and constantly developing country, Livingston Ferguson, Senior Customs/Revenue Officer, Ministry of Finance told teachers at The Government High School during a session of their professional development workshop January 19.
Ferguson said that VAT represents the county's best chance at economic recovery and its ability to keep pace with national development.
“As it relates to recurrent expenditure we're spending at the tune of $1.7 billion a year and only taking in $1.5 billion in revenue,” Ferguson said. “Our present revenue collection system is antiquated. About 60 per cent of all of our revenue comes from customs duty and we've been using that system for 100 years. We need to move to other forms of tax to meet the country's needs.” Ferguson pointed out that as the population continues to grow, The Bahamas' social and infrastracture needs will increase and the government will have to find ways to satisfy them.
He said that organizations like the IMF and the IDB have strongly suggested to The Bahamas that the country take more aggressive measures in correcting its fiscal situation. While the Ministry of Finance is doing all it can to plug the leaks in its already established sources of revenue, Ferguson said, much more needs to be done.
“We are not too far gone yet, but what we do today will determine what will happen to us in the future,” Ferguson said. “A rise in debt would mean for The Bahamas a decreased capacity to borrow in the case of emergencies like hurricanes and a further credit downgrade would mean that interest rates for not only the government but for the average consumer would increase.”
If the country doesn't move to bring its financial house in order and on its own terms, Ferguson said that the alternative outcomes could even expose the Bahamian dollar to the risk of being devalued. This, he said, would inevitably increase the cost of living and limit the government's ability to help those in need.
The government’s series of consultations on VAT continues this month at SC McPherson High School on February 20 at 10:00 am, the Bahamas Human Resources Association on February 20 at 11:40 am, Alexiou Knowles & Co. on February 21 at 8:30 am, and BEC on February 21 at 11:30 am.
For more information on the VAT implementation, please call the Ministry of Finance VAT hotline between 9 am and 5 pm, Monday-Friday at 225-7280.
You can also visit the official Facebook page at www.facebook.com/vatbah242.
Value Added Tax has been the 'choice' taxation method for over 160 countries worldwide since it was first implemented in 1950.
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