The Tribune

By RASHAD ROLLE

Tribune Senior Reporter

rrolle@tribunemedia.net

DEPUTY Prime Minister and Minister of Finance Peter Turnquest said the government does not anticipate a need for new taxes when the economy recovers from the COVID-19 crisis.

The deficit is projected to explode to an unprecedented $1.3 billion for the upcoming fiscal year and government debt is projected to top $10bn by the end of the 2021/2022 period.

While the Minnis administration has committed to not raising taxes because of the damage an increase would have on the ailing economy, many fear paying for the increased debt through more taxes will have to happen.

“No, not at all,” Mr Turnquest said in response to the concern during a virtual budget press conference yesterday. “It is our hope that coming out of this pandemic that we will have a strong recovery, both domestically and internationally, will rise all tides as they say. We do not believe that there is going to be a need for new taxes.”

Debt as a percentage of GDP is projected to peak at 85.6 percent by the end of the 2021/2022 before climbing down gradually in the fiscal period after. Debt is projected to be $10.6 billion by the end of the 2022/2023 fiscal year.

Mr Turnquest, nonetheless, said strong growth should help the country.

“We project by January 2021 we should start to see returns to our former tourism numbers,” he said. “To the extent that we get down to the late fall, early winter of 2021 and we do not see the kind of recovery that we anticipate then we will have another set of decisions to make but even then I do not believe that taxation will be the answer because you can well appreciate that if the economy is slowing down, adding taxes on top of that is not going to help us. We would have to make some other interventions.”

Such interventions include revenue enhancement initiatives, he said.

“We continue to look at new sources of revenue from commercial services that the government may provide to ensure that we are maximising the opportunities. We are looking at continuing to inspire both domestic and foreign direct investment that will help us to grow the economy and through those initiates as well as our cost rationalisation efforts we hope and as we have shown its the past three years that those efforts will accomplish savings that will eventually allow us to reach our fiscal consolidation or balanced budget objectives and we can start to pay down on this debt that we’ve accrued over the last many years.”

Financial Secretary Marlon Johnson added the country was on the right track before Hurricane Dorian and COVID-19.

“Before Dorian, before COVID, in normal economic times the deficit was going down,” he said. “From 2017 to before Dorian hit, the last two fiscal periods we saw a 67 percent reduction in the deficit. Once we get to some measure of normality that dynamic will continue on. Over time the deficits will shrink and the debt to GDP ratio will start to go down.”