The Tribune

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

PROGRESSIVE Liberal Party Leader Philip "Brave" Davis was noncommittal yesterday on whether a PLP administration will return the value added tax rate to 7.5 percent should the party be elected to office in the next general election.

Instead, Mr Davis said he was not going to make any promises because he could not say what condition the current Free National Movement government would leave the country in following an election.

However, the PLP leader was "unequivocal" in stating the party sees the proposed VAT increase to 12 percent as a "mistake", adding there was potential for a "double dip recession".

He further criticised the Minnis administration for the disconnect between executives in government and members of parliament. The Tribune reported yesterday that several backbench MPs were surprised by the announcement of a VAT increase. Mr Davis also took at swipe at Prime Minister Dr Hubert Minnis for his numerous changes in position on matters of national interest saying the national footwear is now a "flip flop" and rejected the assertion the proposed VAT hike was in an effort to dodge the devaluation of the Bahamian dollar.

For his part, PLP Deputy Leader Chester Cooper said the government had done a "piss poor" job in consulting stakeholders and the business community on the tax hike.

Mr Davis also addressed the former government's rationale over introducing VAT at a rate of 7.5 percent.

He said: "I wish to say having governed this country we were satisfied, that is the Progressive Liberal Party, that the VAT revenue (from the) 7.5 percent coupled with our revenue enhancement measures and a pro-growth economic strategy, we thought that was sufficient to defray the government's day to day operational costs and to deliver on their promises to the Bahamian people.

"We felt with the opening of Baha Mar, The Pointe, the sale of the Lucayan hotel complex in Freeport, the cruise port in east Grand Bahama, the Ocean Cay development in Exuma Cays and other projects on the drawing board, that there would have been no need for a hike in VAT.

"Let me be unequivocal in our opposition to this tax hike. It is a mistake and can induce double dip recession."

Mr Davis noted the establishment of a revenue enhancement unit under the former Christie administration. He maintained the unit collected $25m to $30m each month up to May 2017. Mr Davis claimed the unit was dismantled when the Minnis administration took office, adding if it remained, the country would not be faced with these fiscal problems.

"This unit within the Ministry of Finance was collecting $25m to $30m per month up to May 2017 and their work was being commended by international credit rating agencies."

He did not say which agencies he was referring to.

"It is not true to say that the unit was floundering. It floundered after May 2017 because the minister of finance dismantled the unit and revenue collections suffered. The revenue enhancement unit should be immediately reestablished to its full manpower to carry out this important mandate of collecting revenue," he continued.

Mr Davis, former deputy prime minister, said there is as much as $630m in uncollected revenue. He said the government should focus on this stream of revenue instead of increasing VAT.