Michael Halkitis
By SANCHESKA BROWN
Tribune Staff Reporter
sbrown@tribunemedia.net
THE government has collected approximately $510m in value added tax revenue from January to November 2015, according to Minister of State for Finance Michael Halkitis.
In an interview with The Tribune, Mr Halkitis projected that the government will receive “just under $550m” in the first VAT fiscal year.
The government originally said it expected to collect around $300 million from VAT in the first year of implementation, however Mr Halkitis said that figure “was a conservative estimate” because the tax was new and officials “didn’t know what to expect.”
“We have done a year and we have complete information for 11 months and it shows that we have collected approximately $510 million from January to November,” Mr Halkitis said.
“We estimated $300 million but when you estimate revenue you always want to be conservative but we were very pleased with the level of compliance. We have more than 90 per cent of businesses complying, registering and doing their returns on time. About 70 per cent is the norm so we had excellent compliance. “When we forecasted, we were conservative because it was new and we were not sure what to expect. We figure that we will end up with just under $550 million for the first year. For this budget year, from July to June, we are forecasting $544 million.”
Mr Halkitis said there is a “misconception” that VAT revenue is extra money for the government, but he said for many years the country has been running a deficit and the money collected from VAT is being used to “fill the hole.”
“What happened is for years before VAT was introduced, we were running deficits. For example, around the height of the economic crisis, we ran a deficit of $363 million and so when we started VAT we are not starting from zero we were starting from negative,” Mr Halkitis said.
“The year before VAT we had a deficit of roughly $208 million, so that money is going to fill that hole. It is used to stop the bleeding. It is like when you have a boulder running down the hill and you have to first slow it down and then stop it and then push it back up.
“So we are now slowing it down and eventually we will get a balanced budget. So we are coming down from a deficit and that is where the money is going. We will eventually begin to borrow less; we forecast that in 2017/2018 we will be able to pay our bills without having to borrow. We expect to have a small surplus for the day-to-day running of the country, the first since 2006.”
Mr Halkitis also said the Christie administration has “no plans” to raise the VAT rate from 7.5 per cent.
Comments
sheeprunner12 8 years, 11 months ago
Soooooooooooo, when is the government going to show us that they have responsibly spent this "extra" income????? ............... and will they do the refunds to the business operators as promised???? .................... the Consolidated Fund "black hole" is a serious flaw though
GrassRoot 8 years, 11 months ago
its called play money or funny money. like losing in court in the ahh soo frivolous law suits from the foreigners illegally kicked out of the country, or going up in flames at BAMSI. I think the Government members are hooked to these failures like a drug addict to his stuff. Only way to get them away from it is let them go cold turkey. take away the money so they cant play anymore.
DonAnthony 8 years, 11 months ago
So Mr. Halkitis Bahamian businesses and Bahamian taxpayers have fulfilled their part of the bargain, when will this government fulfill theirs??? Why with an extra 550 million do we still have annual deficits and why is there no Freedom of Information Act and no accountability from this government? You should be embarrassed to report these numbers, Bahamians are being gouged by this government in the form of excessive taxes, making all of the sacrifices with no accountability and transparency or fiscal responsibility on the part of this corrupt government.
bahamian242 8 years, 11 months ago
Put that $550M into the Principal of the County's deficit. It now stands at 6.85 Billion! In paying the Principal we should have our deficit down to ZERO in 8 years! But with the continued borrowing that will be needed, sayin 12 Years!! Hopefully after that, then our VAT then can be used instead of Borrowing!
GrassRoot 8 years, 11 months ago
what 550m? the ones that will be work maybe 250m, once the BSD is on free float?
sheeprunner12 8 years, 11 months ago
PLP and embarrass cannot co-exist in the same statement ........... remember that the PLP is ordained by God to rule this land (thats a joke!!!!!!)
thomas 8 years, 11 months ago
This makes whoever made the estimate look incompetent. Off by such a large amount
SP 8 years, 11 months ago
Describing a foreigner as incompetent is an oxymoron to the PLP & FNM!
Honestman 8 years, 11 months ago
Halkitis says of the fiscal deficit - "It is like when you have a boulder running down the hill and you have to first slow it down and then stop it and then push it back up." No doubt Standard and Poor's will be well impressed with this PLP financial wizard's complete grasp of the situation.
GrassRoot 8 years, 11 months ago
and the investment into BOB is probably still on the Government books at cost.
cmiller 8 years, 11 months ago
This is the PLP's only success.... raping the population of their money!!!!!
SP 8 years, 11 months ago
.......... 55 Ministers, bankers and businessmen stole $9 Billion from Nigeria's economy .......
http://news.yahoo.com/nigeria-minister-…
How many $Billions have ministers, friends, family and lovers stolen from Bahamas economy?
Publius 8 years, 11 months ago
Anyone notice that not a single opposition member has properly called for the elimination and reduction of customs duties and the reduction of other critical fees due to all this boasting about hundreds of millions of dollars in VAT above budgeted estimates? And by properly called, I don't mean mouthing a general call in a press release, but actually showing from the budget where these cuts could take place and how it would balance out revenue vs expenditure estimates.
TruePeople 8 years, 11 months ago
there is no real opposition. it's all stage show. only the ignorant believe their tired rhetoric
B_I_D___ 8 years, 11 months ago
So they collected MORE VAT money than anticipated, yet they STILL added to the deficit...BRILLIANT!!
Well_mudda_take_sic 8 years, 11 months ago
And all of the VAT dollars collected by the corrupt Christie-led PLP government have been effectively pissed away through the millions and millions of dollars of fraudulent loans and advances made by Bank of The Bahamas to corrupt political friends and business cronies at the behest of Christie and Ingraham during their respective PLP and FNM tenures as Minister of Finance. Poor honest hardworking Bahamians are left holding the bag filled with an increasing level of National Debt that they and their children, grandchildren, great grandchildren, great great grandchildren and so on are destined to be crushed under for all time to come. How truly sad for generations of impoverished Bahamians to come!
GrassRoot 8 years, 11 months ago
nice. good job. what happened to it?
MonkeeDoo 8 years, 11 months ago
Perry Christie speaking yesterday in Jamaica on - Someone else must have written this without his knowledge. Governance
The need for good governance is widely recognized in today’s discourses on economic development.Fair and effective governance is critical to ensuring that development benefits both people and the planet itself.
**The IMF has spelled out the relationship between good governance and economic development in its declaration Partnership for Sustainable Global Growth that was adopted by the IMF’s Interim Committee in September 1996.
It identified "promoting good governance in all its aspects, including ensuring the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption" as an essential element of a framework within which economies can prosper.**
One of the most important areas of good governance that governments in the region must effect is legal frameworks that are enforced fairly and impartially.
The enforcement of the rule of law and protection of property rights and fundamental rights of citizens has an important bearing on economic development.
Protection of human rights, particularly those of minorities, and the timely, effective and corruption-free enforcement of laws require an independent and incorruptible judiciary and police force.
Experience shows that some of the most important factors considered by investors as they decide on investment location include a predictable and non-discriminatory regulatory environment and the absence of undue administrative impediments to business.
These are areas that must be closely monitored and continuously improved upon to attract and sustain higher investment flows. At the same time, policy makers must always be flexible and forward looking.
In particular, we must avoid becoming stuck in modalities of governance that the rest of the world is moving away from.
Good governance requires policy and laws to be in sync with current realities and in step with generally accepted global norms.
The management of public finances is another area where good governance is of paramount importance.
Fiscal consolidation is vital for countries in the region to avoid inflation while maintaining fiscal and monetary stability and finding resources for public service administration, developmental needs and social welfare expenditure.
Transparency and accountability, economic management through improved management of public resources through reforms covering public sector institutions and low levels of corruption are other core elements of good governance necessary for meaningful economic development.
TruePeople 8 years, 11 months ago
basically everything we're not over here
FreeportGrown 8 years, 11 months ago
If we made $550 million why did we borrow $60 million for hurricane relief? Just curious.
Sickened 8 years, 11 months ago
We must remember that the Government hasn't yet started to repay all of those zero rated companies who have had to contribute tens of thousands of dollars and are owed those monies back.
I am interested to see what VAT's 'payable' amount is.
Reality_Check 8 years, 11 months ago
Halkitis is a bungling idiot.....note how he carefully avoids mentioning the word "net". The gross figure of $500 million he quotes is also grossly inflated to begin with. And add to this the fact that many Bahamian businesses are now finding it increasingly difficult to get back from government the VAT refunds they are entitled to receive.
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