The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Branville McCartney says he would have “screamed out” against Value-Added Tax (VAT) had it been presented when in Hubert Ingraham’s Cabinet, describing its likely effect on jobs and the economy as “very, very scary”.

The Democratic National Alliance (DNA), in a recent interview with Tribune Business, blasted the Christie administration for attempting to “ram VAT down the throats of Bahamians” despite providing the public with minimal information.

Arguing that consumers and the private sector were being “bullied” over VAT, rather than the Government, as the latter has claimed, Mr McCartney said that as a businessman himself, he was “scared as hell”.

The DNA leader echoed those who have expressed concerns about VAT increasing prices and living costs, adding that many Bahamians cannot cover their daily expenses “now”.

Warning that VAT would merely exacerbate this, Mr McCartney said the Bahamas needed to “think outside the box” and instead generate economic growth through empowering locals and developing new industries.

Mr McCartney, who resigned from the former FNM government in early 2011, said VAT must have been discussed in the Ingraham Cabinet after his departure, as the issue never arose when he was at the table.

The Christie administration has largely followed the VAT plans left in place by its predecessor, as Zhivargo Laing, former minister of state for finance, previously admitted to Tribune Business that the FNM would have introduced the tax on a similar timetable.

“I would have been screaming out against it,” Mr McCartney told Tribune Business of his reaction, had VAT come up while he was still a minister. “It would have happened after I left Cabinet; it never happened while I was there.”

The Government recently accused the private sector, and especially Super Value owner Rupert Roberts, of seeking to “bully” it over the introduction of VAT, and potentially wider fiscal reforms.

Rejecting this, Mr McCartney retorted: “If there’s anyone being bullied, it’s the Bahamian people.”

This, he explained, had resulted from the Government’s failure to educate Bahamians on how VAT would impact them and their livelihoods.

The DNA leader added that the business community, too, was “being bullied” by the Government’s failure to listen to their advice and tax reform alternatives, instead looking to “go straight ahead and ram this hard tax down the throats of Bahamians.

“All aspects of the economy are crying out, feeling they will be disadvantaged as a result of this,” Mr McCartney said. “We need good governance before they start implementing this tax on the backs of the people. The Government does not seem to want to take advice; they seem very much determined to go ahead with this.”

Defending Super Value’s Mr Roberts, the DNA leader said the concerns over job losses that may result from VAT’s economic impact were real.

“That’s only one business person,” Mr McCartney said of Mr Roberts. “If he has to do it, imagine the rest of us in the business community, the amount of jobs that will be lost. We are going to have to look at ways to save costs, and jobs will be lost.”

Emphasising that he is involved in the pharmaceutical, legal, real estate and education sectors, Mr McCartney said of VAT: “It is very, very scary. It is very frightening. I’m scared as hell from a business standpoint.

“It’s going to be very detrimental to the economy, I think, as prices will go up. Put simply, living in this country will be more expensive. The problem is we cannot afford everyday expenses now.”

And, pointing to the Bahamas’ ongoing economic challenges, the DNA leader added: “In our number one industry, tourism, we still have persons working two and three day weeks.

“That should tell you how bad things are in the Bahamas. We see banks laying people off. Our number one and two industries are suffering.

“That means many of the people in those industries are being affected now, and you’re going to place an extra tax burden on their backs now? We have 40,000 people unemployed or given up looking for work.”

Mr McCartney joined Robert Myers, the Coalition for Responsible Taxation’s co-chairman, in questioning why the Bahamas was seeking to introduce new taxes when it could not enforce the current system.

He suggested the Government was now asking the Bahamian people to pay for decades of failing to build new industries, empower Bahamians and make doing business in this nation easier, describing it as “ridiculous”.

“We need to start thinking outside of the box as a government,” Mr McCartney said. “We need to develop new industries; I know it’s going to take time.

“We need to make doing business in the Bahamas easier for Bahamians than it is now. We need to relax the exchange control laws, so Bahamians can access capital just like foreigners buying hotels, so they aren’t put out of certain businesses.

Bahamians are at a disadvantage, and compete at a disadvantage. We welcome the foreigners, we welcome the investment, but Bahamians ought to be on a level playing field as well.”

While acknowledging that the likes of the International Monetary Fund (IMF) and credit rating agencies were likely putting pressure on the Bahamas to implement VAT and other reforms, the DNA leader said the Government always had to put the Bahamian people’s interests first.

He suggested that the last time the Government failed to do this, and succumbed to international pressure, resulted in the loss of much of the Bahamas’ financial services industry.

Alluding to the response to the 2000 ‘blacklisting’ by the Financial Action Task Force (FATF), Mr McCartney said: “The last time pressure was brought to bear on our country, we had an administration that went away and signed all sorts of things, and we lost a complete industry, the financial services industry, to a very large extent.

“We need to always look at the best interests, what is good for the country and the Bahamian people.”

Urging the Government to “stand up” to outside influences, Mr McCartney admitted that this task had been made harder by the Bahamas’ “failed fiscal policies” that he claimed spanned successive administrations.

He added that it was essential that the Bahamas demonstrate good governance.

“We, as the Bahamian people, need to speak out a bit more and stand up. Bahamians must remember that the power of the people is greater than that of the people in power,” Mr McCartney told Tribune Business.