ELIZABETH MP Dr Duane Sands.
By LEANDRA ROLLE
Tribune Staff Reporter
lrolle@tribunemedia.net
ELIZABETH MP Dr Duane Sands said yesterday the country will have to adopt serious changes in the years ahead in response to the nation’s worsening debt crisis, noting an income tax system may even have to be implemented.
While voicing his support for the 2021/2022 budget, the former Health Minister recommended the government look to tax reform strategies, public private partnerships and other related initiatives to help chart the nation to recovery.
He said losses incurred from Hurricane Dorian and now the COVID-19 pandemic have “left us in a very tight spot,” adding to the major debt issues created by past administrations over the last five decades.
And with government debt set to top $10 billion by the end of the next fiscal year, Dr Sands said business can no longer return to usual in the country and further added that changes will have to be made.
“We have a sovereign debt crisis,” Dr Sands told the House of Assembly yesterday.
“If we survive this, and we will, we have to make the adjustments necessary. We can no longer kick tax reform down the road, so Mr Speaker, this is the time, now, not tomorrow, but today to start on the road to resiliency and recovery.
“It is time to lock in fundamental reforms moving forward rather than simply throwing stones. I would like to make some recommendations as to what we should do.”
He said the country should acknowledge its total debt.
“. . .Let us, as the old people say, ‘claim it.’ Find where the bodies are buried at BMC (Bahamas Mortgage Corporation), BOB (Bank of the Bahamas), BDB (Bahamas Development Bank), BA (Bahamasair), BPL (Bahamas Power and Light).
“Let us look at our unbooked pension liabilities, write it down. All of our accrued vacation leave. Let us speak openly about the state of the NIB fund and the challenged ability to provide benefits beyond 2028-2033 as the most recent actuarial reviews confirm.
“As painful politically as a national, holistic ‘come to Jesus’ moment will be, sugar coating our current situation is not the way to go. After 2021 and 2022, we need to implement some belt tightening. Yes, I said it. Start with the state owned enterprises and eliminate the concept that there’s a bottomless pit for money.
“... I will say that it (the budget) does not in plain language, acknowledge that we are in deep trouble. There’s no free lunch. We must now accept that things are different. We may have afforded champagne previously, but if we drink cider or beer, maybe we will emerge stronger and leaner.
“Let us accept that mortgage default rates of 40 to 50 percent help no one. Let us carve out sustainable investments in the future. Put a cost on the road to digital transformation and let us fund it.
“Let us continue on the road to autonomy of healthcare. Let us accept that the current model is broken. Promising free care to all results in substandard or no care for many. Capital investments in healthcare without maintenance contracts and continuous capital equipment repairs and upgrades is quite frankly nonsensical.”
He said there also needs to be a review of the nation’s tax system among other things, saying if income tax is required, “let’s do it voluntarily”.
“Let us reassess the tax structure of The Bahamas to meet the annual funding needs of the government. If it requires income tax, if it requires income tax, let’s do it voluntarily before somebody else makes us do it,” Dr Sands added. “Clearly, our tax system is inefficient and predicated on ‘best case scenarios’. Clearly, we are underperforming relative to best practices of 15 to 18 percent of GDP as opposed to 22 to 25.
“After 2021/2022, let us right size the contingency for climate change and other catastrophic events. There will be more Hurricane Irmas. There will be more Hurricane Matthews. There will be more Hurricane Dorians. They are going to become the norm unless the world gets a handle on climate change. Let us shift some of the expenditure from recurrent and focus more on capital.”
Comments
benniesun 3 years, 5 months ago
The foxes are guarding the hen house and each new generation of foxes is more evil and gravalicious than the one before. 'A come to jesus moment' (contrived by the foxes) will be a disaster, as in every church that has them the pastors end up with expensive new cars, multi-million dollar living accommodations, private jets, etc... Our country can only be saved by MEN with righteous spiritual discernment, as men are natural leaders, creators, and explorers. Unfortunately, the system set up by our colonizers was not designed to produce such men; leaving us doomed to follow in the path of Greece and Venezuela.
carltonr61 3 years, 5 months ago
He sounds like he is back on the right side of the bed. But we don't know if someone will gave him a nightmare then he roll over to the next side again.
immigrant 3 years, 5 months ago
This fool is trying to tax us to death...meanwhile the poor folk of Albany are still tax free while not even having to leave the compound to support the economy. The impoverished at Lyford Cay are paying a fraction of their real property taxes. Moron Sands...control your government's spending and then come talk to us about further taxation.
JokeyJack 3 years, 5 months ago
Income tax can only work for those earning over $25,099 per year. Those below dont pay NIB so why they gonna reveal themselves by paying income tax?
VAT needs to go to 15% as soon aa economy will allow and exemptions need to go away on VAT.
It is the best collection method for Bahamas.
Beer and liquor can also be taxed an additional 25 cents per bottle on import. Gardener and farm worker permits can be trippled in January and trippled again in Jan 2023.
ForeverDreamer 3 years, 5 months ago
Pardon me, but you seem to have a very incorrect notion of NIB floor and ceilings. I would encourage you to look up per the NIB website the taxable wage calculations. There is no floor of having to make more that "25,099". However, if you are then referring to the insurance ceiling, one can only be taxed at maximum on the first 710 BSD weekly or 3,077.00 monthly finally 36,924 per annum.
momoyama 3 years, 5 months ago
More headline grabbing nonsense. He claims the needed reforms are "painful". Utter nonsense. How is it "painful" to stop taxing the average person to the bone (by consumption taxes like VAT) and shift to taxes on income (corporate and personal) and applying NORMAL levels of taxation to foreign owned properties (which itself would bring in close to a billion annually)?
Another politician looking for headlines, I'm afraid.
This country would have NO DEBT if it stopped giving wealthy corporations like COLINA, FOCOL, Arawak Homes, J S Johnson, Doctor's Hospital and Commonwealth Brewery 100 percent breaks on corporate tax, instead of taxing the meagre earnings of the people they make their money off of.
So long as our people are ignorant, people like Sands can get away with saying stupid things and sounding smart.
lobsta 3 years, 5 months ago
Ah... those foreign owners who ALL pay they their taxes every year? It's the Bahamians who don't pay at all. But go ahead and make it about all the bad, bad foreigners.
C2B 3 years, 5 months ago
There is an inverse relationship between the price of real estate and the cost of maintenance. Taxing foreign owned properties for and extra billion a year on top of disaster insurance would cause a drop in prices and ownership. The Bahamas will, over time, become an AirBNB location where owning a private property will only make sense for a few.
carltonr61 3 years, 5 months ago
We thank God for Sands no fog in our eyes scalpel honesty. But now what?
M0J0 3 years, 5 months ago
lol Mr. Wishy Washy
M0J0 3 years, 5 months ago
If he had sense his main point should be before we institute any new taxes lets reform the current taxes and ensure proper collection. Too many run scot free whiles the poor pick up the bill. Taxing like your crazy is not a solution
bahamianson 3 years, 5 months ago
while women under the age of 20 have two and three kids , go to social services for food, get tax payers money in free uniforms and health care services. illegal immigrants leach on our educational and health services. government introduced VAT , it didnt help, so it increased it to 12 % , now that didn't help, so the solution is to introduce another tax ? that is the dumbest idea of the day. You could not do anything with a VAt introduction, and a VAT increase, now you want another tax? Stop talking foolishness, bey!
C2B 3 years, 5 months ago
The magnitude of the problem escapes most Bahamians as they try to search for loopholes, scapegoats, quick fixes, and foreigners to tax. None of the ideas mentioned here generate enough revenue to fix the problem; that's reality.
ohdrap4 3 years, 5 months ago
The doctors and lawyers will not tax themselves.
Perry Christie wanted PAYROLL TAX, not INCOME TAX. The doctors and lawyers are not on PAYROLL.
These people have no morals. Only those who earn more than 35 or 4o thousand per year should pay income tax.
tribanon 3 years, 5 months ago
Sands is so full of it.
Without significant and effective government reform to stamp out the waste, fraud, corruption and outright theft that has been so pervasive throughout our government and government controlled enterprises for decades now, tax reform and more taxes will do absolutely nothing to help resolve our country's very dismal financial condition. As we have seen all too often in the past, especially since the introduction of VAT, more taxes just feeds and helps mask more waste, more fraud, more corruption and more outright theft at the more senior levels of government and government controlled enterprises.
Cleaning house would require parliament to create an independent government reform commission made up of not more than six non-Bahamian commissioners from at least three different commonwealth countries. These commissioners should not have had or currently have any close significant ties or dealings of any kind involving our country or any of its residents.
The commissioners would have to be highly qualified and reputable proven leaders in governmental affairs and/or the business world who enjoy statesman like stature and standing in their home countries. They would have to be given broad sweeping powers to indentify, investigate and root out existing waste, fraud, corruption and outright theft, while at the same time introducing significant reforms that would make all of our government agencies and departments, and government controlled entities, much more streamlined, productive and resilient to waste, fraud, corruption and outright theft.
A mechanism will need to be put in place to ensure the independent government reform commission is adequately funded and not beholding to government for its funding. The commission should be expected to prioritize and complete the bulk of its work within three years by targeting those areas known or found to be the most vulnerable to the greatest amount of systemic waste, fraud, corruption and outright theft.
Only after the commission has finished its work and produced for the Bahamian people an executive summary of its major findings, main accomplishments and most important recommendations, should major tax reform of any kind be considered.
professionalbahamian 3 years, 5 months ago
Exactly!
DDK 3 years, 5 months ago
This man must not have made enough gazillions as a surgeon. I think he needs another vaccination, maybe to the brain. As long as these governments remain corrupt, stupid and non-transparent, further taxation is only a means to fill the pockets of the corrupt politicians and their cronies, and there seem to be soooo many of them.....
DDK 3 years, 5 months ago
Perhaps the worst thing is the blatancy of the corruption. They know no shame.
proudloudandfnm 3 years, 5 months ago
How many employees at Bahamasair?
How many employees at Nassau Flight Services?
How many employees at BEC?
How many employees at NIB?
How many employees at Ministry of works?
How many employees at Social Services?
How many employees at Tourism?
How many employees at the OPM?
How many employees at Labour?
How many employees at Customs and Immigration?
How many employees at Road Traffic?
How many employees at Statistics?
How many employees at Finance?
How much do we pay every year on these dumb committees established to investigate everything from ships dropping anchors in the Berries to the size and depth of potholes in our islands?
How much do we spend in giving political cronies contracts every year?
What percentage of our budget goes to paying these employees/committee members/crony contracts?
How many of these employees/contractors/committee members are actually needed?
How many of these employees/contractors/committee members are productive?
How many of these employees/contractors/committee member were given their jobs/contracts/committee appointments in return for their vote/support?
Yet every person with an opinion says we need more taxes....
Pure insanity....
DDK 3 years, 5 months ago
EXACTLY!!
TalRussell 3 years, 5 months ago
Borrower Countries, shouldn't expect to feed their spend, spend habits without running-up National Debts in the Billions of Dollars without stringent changes to the strings the Lenders use to wrap the imposing of new taxation - along with higher rates collected from existing levels of taxation and fees tightly tied around the Borrower Countries, yes?
Proguing 3 years, 5 months ago
For clarity: tax reform = tax increases
What about reducing government expenses? Why nobody is talking about it?
Bobsyeruncle 3 years, 5 months ago
Although I am very much in agreement with reducing government expenses, the consequence of doing so would significantly increase the number of unemployed, which in turn would increase the number of people requiring financial assistance from the government.
An over-bloated lazy government workforce has been in existence for so long now that it has become part of the Bahamian culture. I'm not sure there is actually a painless way to get out of it.
Proguing 3 years, 5 months ago
I drove by NIB on Blake road the other day and saw several four doors Jeep Wranglers. These cost $80k a piece. Are these vehicles really necessary?
tribanon 3 years, 5 months ago
@Bobsyeuncle: You may as well stop giving the same excuses for doing nothing that we've heard from our corrupt politicians for decades. Decades of tolerating waste, fraud, corruption and outright theft has brought us to the final fork in the road. There's no longer the option to kick the can down the road. And no matter which way we go from here we will find ourselves having to contend with very great economic and social pain, much civil unrest and, yes, plenty of crime. If we pick the wrong path from here, generations of Bahamians to come will suffer a most miserable existence with most of them being nothing more than very low cost slave labour in their own country. In short, we could all too easily find ourselves quickly transformed into the next Haiti of the Caribbean region if we choose the wrong path from here.
TalRussell 3 years, 5 months ago
You'd thought the expected be more MoneySmart corporate and elites, who are most financially responsible for the RedRegime's being seated at the governing power table, own evaluation of the existing Billions of Dollars under loans, would've been eminently opposed to the borrowing of new billions to fund paying the carrying costs and charges attached to the old pre-COVID Billions of Dollars.
""Might sound strange but because some of the Billions were borrowed at nearing LoanShark carrying charges and fees so high that even their fellow gated-communities atheists** can't wait to bash them, yes?
BONEFISH 3 years, 5 months ago
What Dr.Sands said in this budget presentation is not ground-breaking to me. People have said this before.
Dr. Sands forgets when the cabinet in which he was a part of ,terminated those programs started by financial secretary Wilson. Those programs include: the Revenue Enhancement Unit, the Click to Clear Customs and the Tyler Techologies Program., Those programs were designed to crack down on tax evasion and also modernize the current ax system. Like some one said to me in the winter of 2018, the REU will be restarted. The person said that the FNM government needs that program. True to form ,they restarted it.
The government in which he is currently part of, has made a serious fiscal policy mistakes. As for the review of the tax system, there have been two that have been done already. One of was done under the Ingraham government in the nineties and one done under the last Christie government.
Dr .Sands simply speaks from both sides of his mouth. The journalists don't ask any questions. They simply want sensational headlines. When you speak to people who understand government policies, they will explain to you why certain policies or programs were implemented.
KapunkleUp 3 years, 5 months ago
Anyone got any suggestions on where to move to?
tribanon 3 years, 5 months ago
Wyoming.
TalRussell 3 years, 5 months ago
I'm just sayin', the acquiring of Motor Vehicles, Air & Sea Crafts, Machinery, Furnitures', and Cleaning Supplies are big money items, and whenever politicians and big money collide - it's best to keep both eyes, totally focused and glued wide open, yes?
Bonefishpete 3 years, 5 months ago
With world wide inflation rearing it's head the Bahamas will be pulling off a miracle if the Government can maintain the Bahamian Dollar one to one with the US Dollar.
TalRussell 3 years, 5 months ago
If you think Jesus is real, that is unless one the atheists, it's more odds favourable to be wagering a hefty bet on there being a Jesus sightin' than tis for maintaining the Dollars' status quo, yes?
John 3 years, 5 months ago
The National Debt is of grave concern but what about run-away inflation? From gas to food to building materials to vehicles to appliances. How long will bit last and how many personsand families will find it impossible to feed themselves. Will there be another strain and drain on National Insurance and Social Services? Will it lead to a global economic downturn?
sheeprunner12 3 years, 5 months ago
Did Duane Sands talk like this when he sat around the Cabinet table?????
tribanon 3 years, 5 months ago
NEVER!!!
Sign in to comment
OpenID