The Tribune

By RASHAD ROLLE

Tribune Staff Reporter

rrolle@tribunemedia.net

BAHAMAS Christian Council President Delton Fernander wants Prime Minister Dr Hubert Minnis to remember his past lamentations about value added tax and to reconsider his government's intention to increase VAT's rate by 60 percent next month.

At one point, Dr Minnis in 2014 called on the church to protect Bahamians against VAT, one of many indications of his opposition to what he called an "anti-middle class" and "pro poverty" measure.

"I call on him to consider his own words," Mr Fernander said yesterday. "This is the church now speaking on behalf of the vulnerable of society to realise that this is going to be onerous on those who can least support it now."

Dr Minnis and his party's past views about VAT have fueled resentment among Bahamians.

Mr Fernander said: "I saw an interview, he kind of indicated that stances change when you get in the chair and you see what the mindset was of the previous administration. But for most of us we would kind of hold politicians to a level where before they push agendas, they should be sure what their words stand for.

"It is our hope," he continued, "that the uproar will cause them to revisit their decision because we weren't consulted on the front-end as opposed to when we first introduced VAT to the country and it is really, really going to be a challenge for the poor of our country and the middle class and at this time I don't know if it's the right time to do it."

Mr Fernander said the administration's desire to fix the fiscal affairs of the country is understandable but paying bills should not be the government's foremost priority.

"I sat on the consultation committee with the New Zealand consultants and I have a good idea why 15 percent was being considered at the time," he said. "We needed to move towards an increase but I would use (the prime minister's) own statements which is that we can't tax our way out of this situation. Creativity is necessary. We might get the desired result in terms of reduced deficits but we might have a frustrated citizenry. You must keep the economy growing and expanding in a way that makes life palatable for those of us in our society. If you wipe out all your debt and people can't eat today, it doesn't accomplish what you intended."

Mr Fernander criticised the lack of consultation that preceded Deputy Prime Minister Peter Turnquest's announcement of the VAT hike last week. The finance minister has said governments around the world shield their revenue measures to avoid influencing consumer behaviours. He said it is conceivable there could be a "run on the bank" if people, anticipating a tax hike, rush to capitalise on the lower tax rate.

In response, Mr Fernander said: "The volume of spending that would have to take place before they approve the budget would have had to be massive for it to have a major effect. While what he said may be the reality, that kind of movement in the market would be unlikely."

As for how Bahamians could now cope with VAT's rate rise, Archdeacon James Palacious, vice-president of the BCC, said lifestyle changes are critical.

"We need to find different ways to save money, not to spend more money than we need to," Mr Palacious said. "We don't got to buy things we don't need to impress people we don't like. We need to buckle down, be more thrifty, waste less and find cooperative ways of purchasing things. People in the same households must combine their resources and buy things wholesale, for instance."

One significant budget revelation the BCC supports is the extra taxes web shops must now pay.

"We don't at all have any problems with the taxation increases going on there," Mr Fernander said.

"We've made our position quite clear. We pushed and voted that it's not something we wanted in our society. It has had unintended consequences. It has been addictive. The church looks to this government to do what they said they will do; by increasing the taxes, they become part owners almost, like a private-public partnership."