The Tribune

EDITOR, The Tribune.

It has long been accepted in The Bahamas that there is an urgent need to reform and amend our taxation system if the government of the day is to be able to adequately pay its debt obligations and fund essential infrastructure and societal projects. Yet, for some unknown and strange reason, no government has had a concrete vision plan or political will to do so. The shaving cream will soon, if it has not already, hit the fan.

The national debt is in excess of 4.5 billion dollars. GDP is now a national joke of the highest order as we are now operating our budget in the deficit mode. Productivity has fallen so low that it no longer registers on the economic totem pole. Our credit rating has been mocked and downgraded by several international agencies. Yet, a respected advisor to the current Prime Minister as well as the Honourable Minister of State for Finance have both indicated that we will have to borrow even more monies to shore up the upcoming mid-year budget.

Governments, like individuals, must be able to live within their budgets. Deficit spending has been the modus operandi for the previous FNM administration, now mercifully defunct, and the current gold rush crew. If one earns $500 per week it would be impossible for him/her to survive for any length of time if he/she were to consistently spend as if he/she were earning $800 per week. It is the same thing with a government. Simple? Yes but seemingly our innovative and childish politicians just don’t get it.

I am not into the blame game at this stage. What we need to do is to find additional ways to enhance our revenue and to reduce the deficit. There needs to be also, I submit, dedicated spending cuts and elimination of “jobs for the boys” and unessential contracts.

Income tax is long overdue in The Bahamas. We have more than 1,300 registered attorneys in the country. The bulk of them, allegedly, earn close to $100,000 per year but pay absolutely no income tax. Yes, they may make contributions to National Insurance but that is not income tax. With some 500 or more Chartered Accountants and some 400 medical doctors, all allegedly earning similar incomes, it is a crying shame and a national disgrace that there is no income tax system in this country. What about those business persons who rake in hundreds of thousands of dollars and millions in some cases?

Several high ranking politicians are also allegedly earning or facilitating income in the six figures on an annual basis yet they too pay no income tax. I suggest an across the board income regime of 10 pr cent on the earnings of all workers in The Bahamas. Some say that such a system would create yet another level of bureaucracy. So what if it causes additional revenue to be generated and actually collected? We already have plenty of civil servants who are doing next to nothing while receiving a pay cheque each month, Redeploy them if necessary.

In addition we, as a people, would then start to keep and maintain proper financial records as we should have been doing years ago. More work would be generated for those in the accounting and legal professions. I realize that the introduction of income taxation would cause some political fallout, but so what? Is it better that the country gets back on its fiscal footing or that a handful of rich and not so rich individuals continue to rake in big dollars and do not pay their fair share?

The current reliance on customs duties is outdated and no longer sustainable. Such a system is also unfair to the small man/woman who pays exactly the same rate as those who are considered in the middle and upper classes. Potential fraud and evasion are also, allegedly, common place under the customs duty regime. Tens of thousands of Bahamians who return home from a shopping trip abroad routinely, so I am told, under value their purchases or simply don’t declare them at all.

A Value Added Tax (VAT) should also be introduced where one pays a predetermined percentage on the value of a purchase at the cash register. This, too, however, may cause some initial problems in that once a business establishment or individual collects the VAT it or she/he may be slow in paying it over the Treasury.

Central governments over the past decades have been notoriously lax in enforcing the collection of real property tax; stamp tax and overdue utility bills. If there is not already in place a dedicated collection unit with the Ministry of Finance, one should be created and staffed by qualified personnel immediately. Our revenue sources exist but the politicians who come and go after five years really have little or no incentives to ensure that we have funds to do what we have to do to keep the country running smoothly.

Additional revenue could be generated by freeing up Crown Land so that those Bahamians who qualify would be able to access a piece of affordable land in one of the more developed Family Islands on which to construct a home or establish a commercial venture. The land should be sold at a fair value and on generous concessionary terms. The difficulty with this, however, is that traditionally, successive governments have seemingly been reluctant to empower the average Bahamian, especially the black ones with land.

The gold rush has a stellar opportunity to engrave its legacy in the sand, but it must do so with some degree of boldness and innovative accounting methods. Mr. Christie, God bless his soul, means well, I am sure, but good intentions have never been good enough. He and his administration must grab the bull by the horns and bring sanity to our revenue streams. To God then, in all things, be the glory.

ORTLAND H BODIE Jr

Nassau,

January 18, 2013