THE Bahamas has a “six month window” in which to stave off another credit rating downgrade through concrete fiscal reform actions, with Moody’s yesterday describing the Government’s planned $800 million correction as “enormous”.
Aaron Freedman, the Moody’s vice-president who led its recent Bahamas country report, described as “pretty drastic” the Christie administration’s goal of increasing revenues by a sum equivalent to 10 per cent of national gross domestic product (GDP).
He and his colleagues put the scale of the government’s proposed fiscal turnaround into context by telling The Tribune most countries sought revenue increases equal to two to three per cent of net GDP from fiscal reforms.
The Bahamas, though, is targeting a gross revenue increase up to five times that amount, with $500 million in new income adding to the estimated $300 million in existing import tariffs that it must replace.
Value-Added Tax (VAT) is projected to generate $500 million of that $800 million, or just over 60 per cent, but Mr Freedman said Moody’s was “sceptical” the new tax would meet the government’s forecast.
Unaware that the VAT legislation has yet to reach Parliament, until informed by this newspaper yesterday, Mr Freedman and his team said it was likely this would be “watered down” by public opposition to the new tax.
And, while acknowledging that the $2.6 billion Baha Mar project gave the Bahamas something no other Caribbean nation had, the Moody’s executive said its success was “a big if”.
• See today’s Tribune Business for the full story
Comments
proudloudandfnm 10 years, 10 months ago
Moody's mussee don't know the PLP hey? All talk and no action. We know VAT will not be implemented in July, that is just not possible. And we are all doubtful it'll even happen with this group of jokers. For one thing we the people are going to fight it tooth and nail. And we don't want ANY new taxes until our government cleans up current tax collections and reduces wasteful spending. Half a billion not collected in property taxes. And why? Because the people in that department simply don't give you your tax bill. Half a billion wasted on Bahamasair. Why? Why do we need a national airline anymore? I never fly Bahamasair and haven't in years. Why do we need it? Why do we need ZNS? I never ever watch it. ZNS is 30 years old or so and today they are as bad at broadcasting as they were the very first day they started. THEY HAVE LEARNED NOTHING IN 30 years. Talk about a complete waste of money. We will not accept any new taxes with these lazy governments we have had. SO you might as well downgrade us Moody's because the Bahamian people will not accept VAT.
nassauboy 10 years, 10 months ago
want to see how this can play out, just look at Greece.
First they loan you the money, and now you in deibt. They know you cant pay it off so they get you to seel them (privitize things) like BEC, Batelco ... a list can keep growing. This way the bankers extract more $.
Then they lower your credit rating, more interest for them, and then the austerity begins which is really less money for the people because its needed for the interest payments.
Anyway, good to see crime still big in the news as really going to help with getting more money into the country.
concernedcitizen 10 years, 10 months ago
We have been borrowing since the late 70,s to pay our ever increaseing grossly overstaffed civil service ..1 in 4 can,t work for the public sector w/ out borrowing and taxing ,the same way public service workers could not retire in G reece w/ full pensions at 54 yrs old ..its ponzi schemes for votes that are not substainable ,,
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