The Tribune

By KHRISNA VIRGIL

Deputy Chief Reporter

kvirgil@tribunemedia.net

PRIME Minister Perry Christie chastised Free National Movement (FNM) Leader Dr Hubert Minnis on Friday, claiming the Killarney MP seemed to have no clue about governance in the Bahamas or how the Ministry of Finance functions.

On Thursday night, during an FNM candidates launch at Arawak Cay, Dr Minnis accused the Christie administration of wasting Value-Added Tax (VAT) collections, adding that Bahamians did not believe the lengthy explanation given to them by the Prime Minister in the House of Assembly on Wednesday.

This seemed to have offended Mr Christie. When The Tribune asked him on Friday morning whether he felt vindicated by being able to give an account of the revenue, the Centreville MP wasted no time in blasting Dr Minnis.

“What I should say to the public is that I note that the member of Parliament for Killarney, who is no longer the Leader of the Opposition, has indicated that the figures are unbelievable,” Mr Christie said on the sidelines of Palmdale Primary School's special assembly in recognition of Cyber Week.

“I would simply want to say for the record, the accounting was done in accordance of the requirements of the Constitution (and) the Financial Administration and Audit Act and they were prepared by the same civil servants and public officers who will advise him if, by chance, he becomes the next Prime Minister of The Bahamas. 

"When he speaks to the work of public servants he should not try to denigrate them by being careless and irresponsible about conclusions he’s drawing and trying to suggest that they are my figures.

"They are not my figures and he would be amazed to know the public figures involved in the compilation of those figures and the conclusions drawn.

"Moreover those figures are submitted to the International Monetary Fund (IMF) and all of the rating agencies. So I am not sure what they would be thinking of someone who is representing themselves as having the capacity to be the next Prime Minister of The Bahamas and seems not to have a clue about governance in this country and how the Ministry of Finance functions and how these things are arrived at. 

“So it’s not a question of my being vindicated. It’s a question of recognising that the Bahamian people have a right to know and I have now met that condition and all I have tried to do is to answer the question as to where the money went and to show, in fact, the tremendous concessions we give,” Mr Christie said.

During one of his four communications in Parliament on Wednesday, Mr Christie was adamant that the $1.14bn in VAT revenue collected by the government in 2015 and 2016 had not been “frittered away” or spent “surreptitiously”.

Finally giving an extensive explanation of VAT revenue since the matter was reignited following the Progressive Liberal Party’s convention in January, the Prime Minister told parliamentarians it was a “worrisome” and nonsensical misconception that his administration mishandled VAT money. This issue, he said, needed to be put to rest once and for all.

VAT was implemented on January 1, 2015, at a rate of 7.5 per cent on most goods and services.

According to Mr Christie, while VAT collections are automatically sent to the Consolidated Fund, where revenue is “indistinguishable” and not earmarked for any one purpose, it goes toward three categories of reduction.

These include tax reduction, funding of expenditure and deficit and debt reductions being the residual outcome. He was adamant that the government had been “crystal clear” from the outset that the administration’s programme for tax reform had manifold objectives.

While VAT did yield more than $1.1bn, Mr Christie said there was a vast impact on recurrent government revenue due to the elimination of the hotel occupancy tax, VAT refunds and other tax reductions. These amounted to a total reduction of $344m in revenue foregone since the introduction of VAT, but the net impact on revenues to the government was $756m.

He told the House that in summary, 40 per of the VAT revenue went towards reducing the deficit, 30 per cent replaced revenue foregone from tax reductions and the remaining 30 per cent went towards general expenditures.