Deputy Prime Minister Peter Turnquest. Photo: Terrel W. Carey/Tribune Staff
By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
DEPUTY Prime Minister and Minister of Finance Peter Turnquest defended the government’s Value Added Tax (VAT) hike plan during a press conference on Thursday.
He spoke as Bahamians continued to rage about the unexpected move, with 2,000 people signing an online petition opposing the hike and some organisations planning to mark their anger during Friday’s Labour Day marches.
“We did not settle on that (12 percent) rate arbitrarily,” Mr Turnquest stressed.
“We fought about this. We ran models, looking at what would happen if we took the rate to nine percent or ten percent and ultimately we decided on the 12 percent rate because it gave us the best opportunity to get through this period of consolidation as quickly as possible and begin to reduce the pain on the Bahamian people.”
Mr Turnquest has said the VAT hike is needed to pay off arrears as part of the government's three year fiscal consolidation plan.
The Free National Movement (FNM) previously opposed VAT in part because it is a regressive tax. In a recent report, the Central Bank of the Bahamas said 50 percent of Bahamians cannot "make ends meet." Asked why the government will increase the VAT rate rather than find progressive solutions to impact poor people less, Mr Turnquest said: “We recognise the additional four and half percent of VAT will represent a significant cost to the average Bahamian family, in particular those who are most vulnerable . . . so we’ve put in place measures directly aimed at that group of people who will be most affected by this increase. In addition to that, we have also increased the social services by almost $4m to try and pick up some the slack for people who may find themselves still in a difficult and vulnerable position. The reality is we all live in one Bahamas and we all have a responsibility to ensure the Bahamas is able to move forward in a sustained way and a responsible way.”
Financial Secretary Marlon Johnson added that implementing new taxes “takes time,” noting the government has asked Deloitte & Touche to analyse alternative tax options.
Amid cries about the rising cost of living, Mr Turnquest suggested no increase in the minimum wage is in the cards.
“I’ve heard the cries for minimum wage myself,” he said. “When you increase the minimum wage there is a cost to that. A lot of people believe that when they get an increase in minimum wage that they’ve actually got an effective increase but the truth of the matter is when you increase the minimum wage in one sector the businesses are going to compensate for that which means they are going to increase the cost of the services they deliver. While I understand that it is difficult to live on a minimum wage we have to consider holistically what it means when we say that we want to increase wages because the one thing we don’t want to do is to cause businesses to increase their costs thereby increasing the cost of living for everybody.”
Former FNM Chairman Darron Cash said yesterday the Minnis administration's credibility has taken a blow with its VAT hike announcement. The FNM made a big show of its opposition to VAT when the Christie administration –– then making similar claims about the need to reduce the country's deficit –– pushed for the tax.
Mr Turnquest was asked about statements he made in November 2013 about VAT. He said at the time: “We don’t want to be like Barbados, we don’t want to be like Grenada, we don’t want to be like Haiti, we don’t want to be like any of those countries. They are crying about VAT. We are a prosperous nation, we have a lot to protect so let’s be careful, we do not have to follow the crowd; everyone is jumping off the cliff, that does not mean we have to jump off the cliff too, we can chart our own territory.”
Asked how Bahamians can now trust his government, he said the country is in a “totally different position” now than it was when he made those statements.
“Back in 2012 we were coming out of a recession and there were real opportunities for us to have growth," he said. "The government of the day had the opportunity then to roll back some of the cost that had been accumulating to cushion the ramp up in expenditures that was done to offset the effects of that recession. Instead, they held on to those increases and increased them even further. The payroll went up $266 million just in that period. In this period, we are in a relatively modest growth period and so we are taking the opportunity to try to bring our payroll down, we are starting to shrink the cost of government but at the same time we have an immediacy with respect to the arrears that we have and the size of the government today and so we have to take corrective measures.”
Although growth projections have improved recently, Bahamas Chamber of Commerce and Employers Federation (BCCEF) representatives now warn the VAT hike could have a recessionary impact. The private sector was blindsided by the VAT hike, they said. Mr Turnquest is expected to discuss the matter with them in a meeting Thursday evening.
“We have had conversations with the Bahamas Institute of Chartered Accountants (BICA) president, we’ve had conversations with the Chamber of Commerce, informal conversations about what our thinking was, I don’t remember if we told them what the rate was but it isn’t as though we are not including our partners, we understand how important it is for them as primary stakeholders in this to be brought alone,” he said.
Mr Johnson hinted that some tax relief is expected in the next few years as the government covers its arrears with revenue raised from the VAT hike. "As the payments on arrears come down the government will start to make the corresponding cut down in customs and excise taxes in order to give back to the Bahamian people," he said, saying duty reductions in the 2019-2020 budget could be worth as much as $100 million. The government has long been expected to reduce duties to fulfill requirements for accession to the World Trade Organisation (WTO).
Comments
Well_mudda_take_sic 6 years, 5 months ago
Only a fool tries to defend the indefensible and we now all know for sure that Turnquest is a certified fool and traitor.
Minnis, Turnquest and all the other FNM politicians opted to take the easy road of simply increasing taxes. Like past PLP and FNM governments, the Minnis-led government steadfastly refuses to take the hard road of austerity measures which would entail significant reductions in our bloated public sector head count and related payroll/benefits. They have put a lot of lip stick on the 2019/20 budget pig (or should I say 'tax hog') in an effort to try pretty it up as much as possible. But the 2019/20 budget remains just that - a tax hog! And we all know what happens to an already well-fed tax hog when you feed it even more taxes - it grows quickly and exponentially. Yes indeed, by taking the easy road of more taxes, our spendthrift Minnis-led government have effectively acknowledged they have every intention of further growing the size of our already grossly bloated and largely non-productive public sector. We are about to see the public sector hog fatten up to a humongous size, to the point where there will be no hope for sustainability much less growth in our private business sector.
Moreover, to add real insult to injury, Minnis and Turnquest were originally proposing to increase VAT to 15% but decided at the very last minute that it would be more politically prudent to do this in a phased approach way, i.e. 12% VAT now and 15% VAT next year. The need for much greater higher taxation to eventually change the colour of his annual budget suitcase from red to black is nothing but a laughable political ruse by Turnquest - he and Minnis must think we are all fools to be manipulated and taxed as they wish! And to think that both Minnis and Turnquest promised us time and time again on the FNM campaign trail that his FNM government would not introduce any new taxes but rather would focus on removing the huge amount of waste, fraud and corruption in the public sector, thereby making the size of our public sector appropriately lean and productive to much better meet the needs of the Bahamian people. It seems Minnis and Turnquest alike are now nothing but bold two-faced liars and traitors of the highest order! They are the most humongous uncaring tax hog we've ever had and we, the Bahamian people, had better go about slaughtering it before it eats us and our children and grandchildren out of house and home.
DDK 6 years, 5 months ago
10 out of 10!
proudloudandfnm 6 years, 5 months ago
Peter needs to resign.
And where in the hell is our PM?????
sheeprunner12 6 years, 5 months ago
Go and complain to Perry ........ He got us in this since 2012
Well_mudda_take_sic 6 years, 5 months ago
And Minnis promised if he were elected PM he would stamp out waste, fraud and corruption and introduce much needed fiscal austerity measures rather than simply increasing taxes and growing the size of the public sector as previous governments had done.
ThisIsOurs 6 years, 5 months ago
I wouldn't be surprised if as last person to speak on the budget, he gets up and says he can't support any tax that puts an extra burden on the poor. Edison Key and LBT tell y'all already
Well_mudda_take_sic 6 years, 5 months ago
The happiest one among us today is Frankie Campbell. He knows 'his own people' will be spared from a lot of the burden caused by the increase in VAT thanks to the lip stick put on the tax hog. Meanwhile the illegal Haitian immigrants will be getting more benefits than ever from the increased taxation heaved onto the already broken backs of honest and hard working Bahamians. Symonette of course has been directed to continue ramping up the grant of Bahamian citizenship to ever increasing numbers of illegal Haitian immigrants no matter what documentation they have, thereby turning them into the kind of voters our corrupt politicians love the most as they go about their mission of transforming our country into the next Haiti in our region of the world. Our country is being stolen from us by a Minnis-led government that promised it would be the people's time. But we sadly realize now that Minnis deceitfully meant the Haitian people's time and not the Bahamian people's time! Yes indeed, we have been duped and betrayed by both Minnis and Turnquest.
proudloudandfnm 6 years, 5 months ago
Wonder what the plan is when the economy crashes and they can't raise the 400 million....
sheeprunner12 6 years, 5 months ago
For ALL of you who say that the FNM was wrong for increasing VAT ........ Consider this:
They could have introduce Income Tax on the same sliding scale format as the new webshop taxes?????
They could have cut Government expenditure by $400 million (how much pensions, jobs and rents would that be)????
They could have sold off SOEs and make that $400 million ..... BPL, Bahamasair etc.
They could have increased Sin Taxes on sodas, rum, cigarettes, sugar, junk food, fast food etc to make up the $400 million.
WATSAYU ............. Especially you brain boxes who are so anti-KPT.
Well_mudda_take_sic 6 years, 5 months ago
They can only do what we the voters allow them to do which is why it is now more important than ever for each of us to bitterly complain to our FNM MPs and let them know we are incensed at having been betrayed by a government that repeatedly promised belt tightening rather than additional taxation. And forget the role party politics plays at the polls going forward.....we need many more independents comprised of individuals of good character and integrity who are willing and able to serve the greater cause. You can take your fatalist "could have" syndrome and shove it where it belongs!
TalRussell 6 years, 5 months ago
Ma Comrades, I thinks KP needs read teachings Jesus. Jesus said it's ok give Caesar some of what he wants, which is his money, but you cannot give Caesar ultimately what he most wants.... all ya paycheque.
Twelve-percent VAT is the original sin this Imperial red shirts system injustice. Politicians have been thrown into fire for far less. Amen!
sheeprunner12 6 years, 5 months ago
Tal ....... you are not one of the "brain boxes" that I had in mind ...... SMT
DDK 6 years, 5 months ago
Amen!
TigerB 6 years, 5 months ago
This new VAT is just 5%, the first VAT was 7.5%... Not sure the public understands that, I afraid that if Brave dem get back in they will have more money to screw around with
tetelestai 6 years, 5 months ago
TigerB, stop it...the people quite understand that it is 4.5% increase...thus placing VAT at 12% in total. What is your point?
BahamaPundit 6 years, 5 months ago
These charlatans are pretending that they raised VAT to get our fiscal house in order. They act like they are fiscally responsible. Ha ha ha. In actuality, they raised VAT because they are junk bond status and no one in the international community with half a brain will lend them a red cent. At least be honest you $#@&#_&# morons!!!
DDK 6 years, 5 months ago
GREEDY + LAZY = BAHAMAS GOVERNMENT. Look like this set decided to be a one term party so they will take as much as they can before it all rolls over once again!
BahamaPundit 6 years, 5 months ago
I too am calling for the resignation of Peter Turnquest immediately!
Well_mudda_take_sic 6 years, 5 months ago
Both of my thumbs are up!
BahamaPundit 6 years, 5 months ago
Before I thought the FNM was going about things in a very simple way after one year in office. Now I know that they are just simple minded. Time for them to leave.
TheMadHatter 6 years, 5 months ago
Bahamians have been hiring "cheap", foreign, "under the table" labour for decades. Depriving NIB of funds due to not declaring, and depriving their fellow Bahamians of jobs by hiring shanty town people.
Now it's time to PAY you bastards. The chickens have come home to roost, and the chicken feed gah cost ya 12%.
I am very happy about the new VAT rate. It is exactly what traitor Bahamians deserve.
Hire cheap Haitians & Jamaicans? Pay expensive VAT. Good for ya asses.
bcitizen 6 years, 5 months ago
I wonder how much of the 4 million increase to social services budget will be used to hire more government workers rather than actually go to helping people? These bloated government offices need to be downsized. No new committies. Noo new agencies. Stop the government payroll pig! People falling over each other in these places with no accountability or responsibility for what goes on.
tetelestai 6 years, 5 months ago
So your answer is to fire the people on the payroll and have them "falling all over each other" at the Social Services Office, or worse yet, "falling over each other" trying to commit crime?
Damifiknow 6 years, 5 months ago
Little hundred dollar voucher for food is going to by more corn beef and grits! Because when your close to dirt eating poor we want to help you stay that way! Now we going to cut duty on cars so all the government workers can buy new rides! Minimum wage is going no where! Now the Number runners can buy a plane or chopper to play with on there junkets duty free !and the average hard working Bahamian,,,,,,the one that pay 13.00 dollar for a chicken in a pot ,Maybe only half a chicken at a time please. You cannot tax yourself into prosperity ! Highest price fuel .Plane Tickets up ,hotel room tax ,You run tourists real good. Only a few can afford !
Well_mudda_take_sic 6 years, 5 months ago
And most Bahamian voters don't know that Peter Turnquest owns a controlling interest in an airline service. Small wonder the previously high rate of duty on planes has now been reduced to zero. Turnquest will probably try justify this by saying he had no choice but to make buying planes duty-free because doing so was in the interest of public safety. What a bunch of poppy cock! Doing so was in the interest of his very own pocket book, period!! Yes indeed, the Minnis-led FNM government seems to be an "all for me" bunch of politicians with serious conflicts of interest on par with those of the last Christie-led PLP government. And my-oh-my, notwithstanding the facts, they have the audacity to look us in the eye and tell us it ain't so!!
DDK 6 years, 5 months ago
The People need to march down Bay Street, or up Bay Street, or up and down Bay Street, and picket Parliament until they back off this stupid, easy way out for them, idea!
bogart 6 years, 5 months ago
BIZZARRE......BIZZARRE.....BIZZARRE.!!!!!!!!
HOW IN THE WORLD...?..... CAN FOR THE PREVIOUS FIVE (5) ?.....YEARS CAN A OPPODITION PARTY collrcting monthly salary, brnefits....REPRESENTING THE PEOPLE SITTING....ACROSS ....A THREE FEET .(3) ...WIDE TABLE...AND HAVING LAWYERS....OTHER PROFESSIONALS INCLUDING ...ACCOUNTANTS..former shadow Finance Minister.?.now PRESENT ....FINANCE MINISTER........ALLOW AND....get dis now BLAMING DEM..OTHERS IN GOVT...across 3 foot wide table....same room.....fer gross inefficiencies..????????.and a bunch of other tings.....!!!!!...WHILE THEY WERE ALL ACROSS THE SAME THREE 3 FEET WIDE TABLE....together.....supposeddly.. LOOKING.....out for the best interests of the BAHAMIAN PEOPLE IN .....RUNNING A NINE (9) BILLION DOLLAR ECONOMY...!!!!!!!!!!!!!!!........and in an environment of major global powers ...China and?.US...an EU..........
And despite FULL KNOWLEDGE ...of what is going on....ministries losing millions, ..monies wasted....AND NOBODY IS PUNISHED....NOTTIN CHANGE....they just gets voted out and ....those who sat at the same table. Did nuttin....now playing innocent ....an throwing all da blame on others .... SERIOUS REVISION OF THE GOVERNING SYSTEM REPRESENTATION OF THE PEOPLE NEEDS TO BE LOOKED AT WHERE HUGE MESSES ARE MADE AND IT TAKES ..?A NEXT ELECTION TO TRY AND CORRECT....if population lucky And .....NOW MUCH WORSER.......ONLY HAVING FOUR.....(4) OPPOSITION MEMBERS ...PAID TO OPPOSE AND SAY...SOMETING...AGAINST ....35 MMEMBERS ...ACROSS THE SAME THREE 3 FEET WIDE TABLE....?????.......THE REST OF THE POPULATION .........LESS THE ......SAME LEGISLATORS........JUS GETTIN GOOSIED....TIME AN TIME AGAIN....crazy talk bout the economy swing couple weeks ago...!!!
birdiestrachan 6 years, 5 months ago
Not only is Turnquest a foolish man he is a confused liar. He claims he is reducing the pain of the Bahamian people.. but he is killing them with TAXES
They lied in 2013 when they said they were against VAT . And now in 2018 when they have increased VAT. I knew who they were. I did not vote for them Mr: Myers said the poor and middle class will be hurt by these taxes the people who voted for them .
jamani2 6 years, 5 months ago
Most on this board are very short-sighted. Truthfully, your ire needs to be directed at the previous governments that specialized in waste and abuse, putting foreigners first and no the Bahamian people. This government had no idea what they were walking into. That's another issue for discussion later. The truth of the matter, is that, once we get our house in order, do what it takes to get the patient well, we should never let that previous regime back into the halls of power. They were irresponsible--I would dare say, not even Bahamian--in the way they abused their power. I have much respect for the present government. I dare say, they are on the right track. The only thing I say, is that we have to make sure the rich and the foreigners pay their fair share. And for God sake, stop selling our islands and cays! When we look at how much money passes through our country it is a shame, it's insane. Some live in luxury, while others live in misery and squalor. We have to solve the problem now! But we have to do so justly and equitably. And whatever we do, we need to keep those like what we had in the last 5-10 years away from the halls of power. "Bahamians First", "Its the People's Time", "Change" must become more than fancy slogans. We need brand new, revolutionary thinking in our country--new approaches. It begins with responsible, sound, transparent, good governance. That is why I applaud this government for what I believe is a courageous step forward. Though painful now, bitter pill as it may seem, it was a right step in the right direction. Now, we must stop playing politics; our words do come back to haunt us. As a people, we have to be mature. We have to use sound judgement. And, we must never, ever go back to governing like those in the last administration. Keep your eye on your neighbor to the north. Obama cleaned up; he and the democrats, almost single handedly, hoisted the car (U.S. economy) that slid off the road into the ditch, back out of the ditch. Here comes an irresponsible group who wants to roll back all of the major accomplishments of the last 8 years. They give huge tax cuts to themselves and their rich friends, forgetting that it is about improving the lives of ordinary people. Every day, every week, every month, every year, it should be the people's time. My point in all of this, is that, as we strive to do what is responsible and needed to address the sins of the past, we must never go back to lousy, short-sighted, and selfish governance. And...and, we must be fair and balanced in our approach. We cant just say an increase of .5 percent on dormant land own by foreigners. Everybody must pay their fair share. The Bahamas needs to be a paradise for all!
tetelestai 6 years, 5 months ago
Peter Turnquest, is that you?
Well_mudda_take_sic 6 years, 5 months ago
It sure sounds like him.
realfreethinker 6 years, 5 months ago
He / she is the only person who truly understands what is happening in the country. jamani2 I applaud you for your sound reasoning. The chicken has come home to roost. Bahamians are just use to these one year budgets that uses smoke and mirrors to mask the depth of our financial situation. At least this gov has a well laid out three year plan to stabilize our country. KPT is the only minister in the past many years who has really told us the real truth about our financial status. He should be applauded.
realitycheck242 6 years, 5 months ago
I concur with this post. I would like to add that Bahamians need to develope a more discipline mindset and adopt the Chinese way of generational thinking. because finally we are being governed by higher principles and standards than we have ever been in since independence.
jamani2 6 years, 5 months ago
Thank you, Reality Check! And let me say--no pun intended--a reality check in our country has been long overdue. And, thanks to The Tribune for providing this forum and allowing our humble voices to be heard.
realfreethinker 6 years, 5 months ago
At least there is another one here that gets it.
jamani2 6 years, 5 months ago
No, I am not Peter Turnquest. However, I do view it as a compliment. I am a Bahamian nationalist, though, like KP. We have to rebuild, fortify, and stabilize our country. In other words, we have to care about our country. We have to make The Bahamas great again. We must put our country first! It is very unfortunate that we find ourselves in the predicament we are in. However, it is not by any accident. Mismanagement, waste, corruption, arrogance, cronyism, acting as if the country belonged to a select few, that is what got us in this mess. Again, having found ourselves where we are, it would have been foolish for any responsible government to just ignore the problem, borrow some more, keep spending, turn a blind eye to the developing crisis--which, by the way, would have been an economic tsunami heading our way, where every one flees, international banking institutions, foreign investors, you name it. What was our financial rating status again?! All we have done for the last 5 years is kick the can down the road, act like the sand crabs on the beaches of our beautiful country--hunker down, shut their eyes tight, tight, when they see a problem coming and pretend it's not there. Trust me, we did not have to be in this position. But, here we are. We certainly can't continue doing the same thing. That's madness! We can't do nothing, and just pretend that the problem will go away. That's stupid and self-defeating. It's painful, I would agree. Any form of discipline is. All I say--and all I have been saying--is everyone deserves to feel the pain. The other thing I have been saying is, keep those buzzards, criminals, and crooks, brazen neo-colonialists far, far away from the halls of power. Let those of us who really care about our country clean it up and make it a paradise for all. God Bless the Bahamas! God Bless the leadership! God Bless the great people of The Bahamas!
realitycheck242 6 years, 5 months ago
The Gov Budget for 2018-2019 will ensure that the Bahamas does not have to make the dreaded call to the IMF that Barbados newly elected Prime minister The Hon Mia Mottley has had to make last week for a bail out by that agency. Major economic restructuring was now necessary in the face of an out-of-control debt of 175 per cent of gross domestic product, an estimated $15 billion which is said to be $9 billion more than what the previous Democratic Labour Party administration inherited in 2008 when it took office.Can you imagine that Bahamians ? Barbados with a population of 285,000 much smaller than the Bahamas has a national depth of 15 Billion.Dollars.compared to the 9 Billion for the Bahamas. This fact alone iis all the more reason that we should all support the increase in Vat and the government's three year plan to reach a balanced budget and have a surplus in three years time.. God forbid, Barring any massive natural disaster for our country over that three year time frame we will all (even the now Critics) be singing the praises for this administration for this bold step to turn this ship of state around from going the way of Barbados and Greese in the European union.
sheeprunner12 6 years, 5 months ago
Agreed ............ But some of our ignorant or selfish citizens cannot understand what the FNM inherited from Perry dem ........ That is why the PLP needs to be banished from ruling this country until everyone in Perry/Brave political generation is dead ......... Like what happened to the Israelites in the wilderness.
realitycheck242 6 years, 5 months ago
Sheep .....The Fiscal responsibility Act should ensure that the Mess this country is in Financially does not happen again unless a Brave administration get in power and repeal it. ..That is why it is my hope that right thinking Bahamians would be in the Majority again next election and keep the opposition in the wilderness if the likes of Brave is the leader....could you imagine them running a dual Min Of finance in the Perry govenrment. One was actually in the office of the Prime minister and the other was at the Min of works. ...thats the height of foolishness and thats the king of thing Brave would do again.
sheeprunner12 6 years, 5 months ago
RC242 ........... Barbados dollar is 2:1 US dollar ....... so recheck your stats ..... $15 Billion Bajan is about the same as our national debt.
And what happened to Perry and Halkitis???? ........... They were NEVER asked to account for what they did in MOF 2012-17?????? ........... I found that very suspicious.
realitycheck242 6 years, 5 months ago
Good points .....it seams like When you loose power in this country you are never held accountable for anything unless there is a commission of Enquiry...and even when the truth is reveled no one is sent to jail...In some countries malfeasance results in forfeiture of assets to the state, Jail time or even sent into Exile
BONEFISH 6 years, 5 months ago
A very simplistic view.This problem goes beyond the last five years.In fact,the hard and bitter choices go back to the days of the late Sir Lynden Pindling.
TalRussell 6 years, 5 months ago
Sometimes left think some makeup the leadership red party are not really dark skinned. I mean the way red comrades does keep trying blame their governing incompetence on Pindling - and often his wife too - makes them appear just be masquerading UBP's with heavier than normal suntans. Truth is some them so light-skinned they couldn't have possibly been under sun more than few minutes..... and be honest some main ones too light-skinned even try identify anything other than UBP's off springs.
sheeprunner12 6 years, 5 months ago
Tal .......... I really think you are trying to provoke Bahamians with common sense .......... Cuz, you sure as hell has NONE. .......... Do you think every thief in this country is black????? ........ Do you think every swindler is black???? ....... Do you think every dealer is black?????? ........ Do you think every fraudster is black????? .......... Do you think every lousy worker is black?????? ....................... Are you black??????? ..............Is that you POV??????? ............... SMH
BahamaPundit 6 years, 5 months ago
If Perry dem stole the money, then lock them up!!! If you let criminals run free, I don't care how long or thoughtful a post you write, you just a fool to me!!!
Sign in to comment
OpenID