The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

SOCIAL Services Minister Melanie Griffin says the government is taking a proactive approach in the lead up to Value Added Tax implementation with a view to combating any possible negative implications on the poor.

To prepare for a potential fall out, Mrs Griffin said yesterday, officials are completing final work on a debit card system which is expected to curtail abuse of the food coupon system. The government intends to pilot the debit cards by the end of this month or early August, she said.

The Christie administration intends to implement VAT on January 1, 2015.

“As I have indicated,” Mrs Griffin told The Tribune, “it is predicted that there will be some fallout from VAT. The government has a comprehensive plan to deal with that.

“First of all, we have the same levels of funding and some have been increased for assistance.

“In addition, we have the conditional cash transfer programme coming in, which will mean a more efficient and structured system of delivering social assistance. We also intend by the end of July (or) early August to pilot the use of the debit card in order to have that in place by the time as the VAT is here so that we will be able to experience some savings.

“Because we believe the current system of food coupons is open to abuse and leakages and so the (savings can be added) to whatever fall out we have.”

Mrs Griffin said the Christie administration’s 2014-2015 budget also makes available an additional $30 million to cover an unforeseen increase in dependence on social assistance.

Last month, the Minister told reporters that VAT implementation would mostly affect the poor in the Bahamas. She suggested that the government might have to look at adjusting its proposed 7.5 per cent tax rate to better suit the poor before VAT takes effect.

Mrs Griffin said: “The people most affected by VAT will be the persons who are now receiving assistance. So if this means we have to fortify what we are doing, then we will have to do so. But for the most part, the people that will most be affected will be these same people.”

Since 2001,  according to the Department of Statistics’ 2013 Household Expenditure Survey, poverty has risen by 3.5 per cent and that more than 40,000 people within the country live under the poverty line with an annual income of less than $5,000 a year. The absolute poverty line stands at $11.64 per day.

The survey was based on socio-economic and demographic information collected from households throughout the country.