The Tribune

By KHRISNA VIRGIL

Tribune Staff Reporter

kvirgil@tribunemedia.net

EDUCATION Minister Jerome Fitzgerald said yesterday that Marco City MP Greg Moss was “misguided” when he told parliamentarians that the government’s plan to implement value added tax (VAT) goes against party principles.

Mr Fitzgerald said he was troubled by the remarks because one of the main pillars of the Progressive Liberal Party (PLP) is to ensure every Bahamian reaches a status of economic empowerment. He said VAT would initiate such a cause.

Mr Fitzgerald made the comments as debate on the 2014/2015 budget continued in the House of Assembly.

He said: “When he (Greg Moss) stated that VAT violates the PLP principles...I am a strong PLP and I have always believed in the philosophy of the PLP. When a colleague PLP says that we are doing something on this side that violates the principles of the PLP I had to go back and really think about that.

“You see because he had the point of the pillars on which the PLP stands and that’s reason why we support the PLP and those who put us here support these core principles. That’s having a social conscience.

“When we talk about wiping every tear from the eye that’s what we are about. That’s a part of our DNA, we believe that education and health care should be universal. We believe that everyone is entitled to their own home and we believe in economic empowerment.

“I really had to think and I realise that to a great extent his evaluation really might have been misguided.”

Last week Wednesday, Mr Moss repeated the many concerns he had with VAT. He insisted that its implementation would violate the PLP’s founding principle of safeguarding the poor.

“It doesn’t benefit the country,” Mr Moss said, “to take rich white people and replace them with rich black people. What benefits the country is to create opportunity, which is what the PLP has always been about – education, housing, lending, everything. That has always been the drive of the PLP, but to drive people further into poverty is not the role of our party, as I see it.”

Mr Moss has also previously said that if the PLP implements VAT it will lose the next election. He suggested the government consider alternative tax reform, such as introducing an income tax.

Mr Fitzgerald laid out several reasons why the government chose to implement VAT and said the country had for too long depended on customs duties, which he called “regressive”, for revenue.

“Now and prior to now for the last 40 to 50 years the main tax revenue of this country has come through customs duties,” the Marathon MP said. “There is no question that customs duty is probably the most regressive form of taxation. Everybody pays the same price. Everybody whether they got money or not it comes off the dock that’s the price now.”

He added that organisations, including the International Monetary Fund (IMF), Organisation for Economic Co-operation Development (OECD) and Inter-American Development Bank (IDB), all agree that VAT is the second least of harmful taxes.

The government plans to introduce VAT on January 1, 2015 at a tax of 7.5 per cent. The government had initially proposed to roll out VAT on July 1 this year with a tax of 15 per cent.