The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Free National Movement (FNM) yesterday expressed concern that the Christie administration was effectively “double taxing” Bahamian companies for at least six months, after the Prime Minister suggested there would not be an immediate reduction in Customs duties simultaneous with Value-Added Tax’s (VAT) January 1 implementation.

K Peter Turnquest, the FNM MP for east Grand Bahama and opposition spokesman for finance, said that while they welcomed the delay from the proposed July 1 implementation date, and the reduction in the VAT rate to 7.5 per cent, there was concern this meant there would be a period of double taxation.

Prime Minister Perry Christie had said: “Based on the revenue performance of VAT early next year, the Government may be in a position to consider tariff and excise reductions at the time of the 2015-2016 Budget. More general tariff rebalancing, however, is still a requirement that will need to be implemented once the Bahamas concludes the ongoing WTO negotiations.”

In response, Mr Turnquest said: “The Prime Minister indicated that with the introduction of VAT in January, that Customs duties would not be reduced until possibly July 2015.

“That means that there is going to be a period of double taxation between January and July 2015. That is very significant for us to bear in mind and consider, because the cost of living during that period is going to increase dramatically.

“I don’t know the thinking behind that, but one would have thought that with VAT coming in in January 2015 you would have had a corresponding decrease in the duty rates right away to offset, but it seems like the Government wants to double down to make up for lost time and that is not fair to the Bahamian people.”

Mr Turnquest further charged that the Christie administration was turning out to be a “tax and spend” government. “If you pay attention to this government, we have no worries about revenue growth or deficit spending,” he added.

“They are turning out to be a tax and spend government, with VAT being the new cookie jar to be raided and the Bahamian people to be milked, as they continue to spend on questionable pet projects.”

Mr Turnquest said: “With respect to the revenue trend, the Government is reporting that it has not achieved the targets it set for itself. This signals that the economy is not as bullish as the Prime Minister would have had us think, and implies a subdued economic activity.”

Mr Tunrquest said that while the Opposition was not obligated to put forward an alternative tax proposal to the one being presented by the Christie administration, it would analyse the proposed VAT legislation and studies conducted, and thereafter put forward an official position.

“We have always had questions with respect to the education, the administration and the effect on the most vulnerable,” said Mr Turnquest. “We want to look at all the studies, and have an opportunity to digest and dissect them and make sure that a proper process of implementation is carried out with respect to the people and done in the most efficient manner.”