The Tribune

By SANCHESKA DORSETT

Tribune Staff Reporter

sdorsett@tribunemedia.net

FREE National Movement Deputy Leader Peter Turnquest said yesterday that Prime Minister Perry Christie’s explanation of “where the VAT money gone” was nothing more than “smoke and mirrors and word play”.

Mr Turnquest told The Tribune the Prime Minister “brought nothing new or earth moving” to the ongoing discussion of regarding Value-Added Tax (VAT) collections.

In fact, the East Grand Bahama member of Parliament said with over $2 billion added to the national debt with no appreciable increase in productivity or economic growth, the government should be “embarrassed” to make misleading statements on the effectiveness of VAT.

While addressing parliamentarians in the House of Assembly on Wednesday, Mr Christie said 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 onset that the administration’s programme for tax reform had manifold objectives.

In summary, Mr Christie said 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.

Mr Turnquest said the only thing Prime Minister revealed during his 45-minute speech on VAT, was that the government spent more than the House of Assembly approved and borrowed more than was projected.

“We borrowed for Bahamas Resolve, Bahamasair, etc all without the approval of the House of Assembly. We spent millions on BAMSI, junkets with friends, family and lovers,” Mr Turnquest told The Tribune.

“The PM’s promised report on VAT was nothing more than smoke and mirrors and word play having promised in his 2014/2015 budget communication to ‘arrest the growth in the government debt burden and move it onto a steady downward path to more sustainable levels,’ he failed to do even that.

“With over $2bn added to the national debt with no appreciable increase in productivity or economic growth, this government should be embarrassed to make the patently misleading statements on the effectiveness of VAT.

“Bahamians still want to know where the VAT money has gone. They want to know that stimulus programmes promoted to encourage private sector growth are well planned and executed so that $20m does not get frittered away with no accountability or transparency. They want to know that their VAT money given to Urban Renewal 2.0 is allocated fairly and efficiently. We expected a more detailed analysis of where the VAT money gone.”

Mr Turnquest said Mr Christie’s VAT report, like this current administration, “has been found wanting”.

“Why is it that our debt-to-GDP continues to increase? Why is it that NIB’s unemployment benefits claims as well as Social Services claims benefits continue to soar? Why is it that crime continues reach new record highs? Why is it that no new schools or hospitals have been built?” Mr Turnquest asked.

“Mr Christie, your VAT report, like your administration has been found wanting. Our tax-to-GDP continues to rise notwithstanding our contracting economy and your flowery words. The fact is that the fiscal deficit has not decreased substantially over the last five years as outlined in the Central Bank reports. The Prime Minister’s claim of an average deficit of $250m on average is further debunked by the facts on the ground in the unemployment numbers and mortgage arrears coupled by the increased drain on social programmes,” Mr Turnquest said.