Prime Minister Dr Hubert Minnis.
By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
PLEDGING to fulfil at least one part of a key campaign promise, Prime Minister Dr Hubert Minnis has said value added tax (VAT) will be removed from bread-basket items in the next budget cycle.
The policy shift was anticipated last year but its realisation was postponed because of the financial state of the country.
Dr Minnis announced the date for the policy’s implementation during a meeting of the Free National Movement’s (FNM) Englerston Constituency Association at the EP Roberts Primary School Monday night where he sought to sell his policies for Over-the-Hill communities.
“During our campaign we had said we will remove VAT off breadbasket items and that we will do, that will happen within the new budget,” Dr Minnis said.
The FNM also pledged before the May 2017 election to remove VAT from education fees, water and light bills, medicine, healthcare and insurance. It’s not clear if the government intends to live up to this part of its commitment in the next budget as well.
Asked yesterday, Deputy Prime Minister and Minister of Finance Peter Turnquest said: “We will announce our budget initiatives when we present the new budget in May.”
The administration’s promise to remove VAT from some items drew criticism from experts in financial sectors when Dr Minnis initially revealed the plan several years ago.
Gowon Bowe, president of the Bahamas Institute of Chartered Accountants (BICA), said last year such a policy would “not achieve its end goal” and he expressed hope the government would reconsider the pledge and listen to the advice of professionals instead.
“Taking VAT off those items doesn’t achieve the end goal because if you reduce the base you charge VAT on, it increases the cost of all other items on which you charge VAT,” Mr Bowe said.
The International Monetary Fund (IMF) has also criticised the exemptions plan. Following a visit to this country two years ago, the IMF said in a paper: “The authorities should resist pressures to weaken the VAT regime’s efficiency through the introduction of exemptions.”
Nonetheless, some Bahamians have been anxious for relief from VAT and often lament the administration’s failure to make good on its tax promises.
The government is already expected to declare some inner-city communities tax-free zones in the next budget, a move expected to have some impact on the revenue the country generates. A white paper on the plan is expected to be released in a few months.
“We in the FNM will attack poverty aggressively and the underprivileged aggressively to ensure we uplift as many as possible,” Dr Minnis said Monday night.
He explained the tax-free zone policy will be rolled out in phases, affecting some inner-city constituencies later than others. He suggested Fox Hill and other constituencies with depressed areas could be impacted by the policy, not just Bain Town, Centreville, St Barnabas and Englerston.
“We have phase one which would include Bain Town and Centreville; the western boundary would be Nassau Street, northern boundary would be Delancy Street, and southern boundary would be Wulff Road,” he said.
“Then we would move to phase two which would be St Barnabas and Englerston; so I don’t know how they could say I discriminating. St Barnabas is FNM and Englerston is PLP so they will both come in. Then we will look at other, what we call depressed areas, to extend (the tax-zone policy) in phase three, four, etc, so we’ll look at segments of Fox Hill that need assistance…”
As part of the tax-free zone, the FNM promised to free Over-the-Hill communities from business licence fees, real property tax, furniture tax, capital goods and taxes on business equipment while also giving them lower import duties for business vehicles.
On Monday night, Dr Minnis also urged residents of Englerston to support the FNM in the next general election. The constituency is the only one in New Providence which has a Progressive Liberal Party MP, Glenys Hanna Martin.
Comments
gbgal 6 years, 9 months ago
Don't forget we are still paying Customs Duty on top of VAT! Taxes on top of taxes...Maybe more belt tightening?
joeblow 6 years, 9 months ago
with limited revenue sources to finance the deficit this lunacy will cause, the governments only recourse will be to increase taxes on the middle class. So those with properties or homes will pay more in taxes. Cost of living expenses will increase.
All the while those over the hill, who have not been educated on the importance of saving or investing will remain right where they are socioeconomically because they will spend their savings.
Meanwhile the government should change the breadbasket items to things that won't promote illness and obesity!
This is hot air for those who think with their emotions and not their brains!
DDK 6 years, 9 months ago
Be smart Dr, Minnis, leave the VAT as is on food items. Can you imagine the chaos and confusion, not to mention extra work, which will in turn mean higher food prices on all other groceries? Systems have already been changed to adapt to VAT on ALL items sold in stores. Instead, remove remove customs duty from ALL food items as was promised before VAT came into being in The Bahamas. Surely you can explain this to The People so they will understand it will be win win for their grocery bill.
jackbnimble 6 years, 8 months ago
I had the exact same thought. It means more amendments to the computer system in the grocery stores which translates into higher costs to the consumer. What a nightmare for accounting.
Thinking I'll have to cash my bread baskets items separate to make sure they're not charging me VAT on them
stillwaters 6 years, 9 months ago
DDK, you say this so arrogantly, as if you think we are all dummies.
DDK 6 years, 9 months ago
Are you Dr. Minnis? And not implying that he is a dummy either!
proudloudandfnm 6 years, 9 months ago
I found nothing arrogant about DDK's message...
DetectiveRR 6 years, 9 months ago
Leave the taxes they way they are and lets try to climb out of this economic hole we are currently in.
TheMadHatter 6 years, 9 months ago
Stillwaters ... any Bahamian who wants VAT removed from breadbasket items is a dummy.
They dont understand that if 100 people each contribute $1 you get a total of $100, but if 70 of them say they can only afford to pay 50cents each, then the remaining 30 people have to pay more than $2 each.
Trust me they will get tired of paying 4 times as much as most people do.
Haitians of course support the removal of VAT on the only items they buy....that way ALL their food is VAT free. Once again they prove that now more than ever (with one of their own in the House) they are smarter than us.
Free land, free schools, free clinics, no building permits, no VAT, All Aboard !!!
bogart 6 years, 8 months ago
It has always been known that with VAT that the majority who are poor or middle class will carry a heavier burden than the fewer wealthy. Perhaps it is also time that he looks at personal income tax coupled with credits etc. Should be esy to implement as we already pay NIB a tax.
birdiestrachan 6 years, 8 months ago
The print media that is bending over back wards to support The Dumb one says support the FNM because the PLP taxed the people to much.
The FNM Government can remove all the taxes they claim the PLP put on the people. They did not vote for web shops they can close web shops down and remove VAT period,, Just hold your breath and Waite a while. and see what they will do
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