The Tribune

MINISTER of Economic Affairs Michael Halkitis accused the Free National Movement of continuing to “peddle its misguided tax policy” by trying to pass a last-minute amendment to the government’s Value Added Tax Bill in the House of Assembly last night.

The amendment was put forth by Official Opposition leader and Marco City MP Michael Pintard, however it was not successful. During debate on the government’s amendment, Mr Pintard had suggested the Davis Administration consider a lower rate of VAT on certain breadbasket items, instead of placing a 10 percent tax on the items as planned.

“Despite the abundance of empirical evidence and being denounced by local and international experts, the opposition continues to peddle its misguided tax policy by attempting to pass an eleventh-hour amendment to the government’s VAT Amendment Bill,” Mr Halkitis said in a statement last night.

“The Davis Administration has looked closely at the evidence and consulted widely with local and international experts to design a supplementary budget that balances restoring the nation’s fiscal health while providing economic stimulus and direct relief to the Bahamian people.

“To upset that balance by retaining the ill-advised zero-rating regime would further deepen the government’s revenue shortfalls, and also hinder our ability to support middle-class Bahamians and the most vulnerable populations in our country through the relief measures proposed in the supplementary budget.

“The evidence has shown that the last administration’s zero-rating policy allowed the rich to accrue more savings than any other group while lower-income households accrued the least benefits.

“The Bahamian people should consider the government’s approach holistically. Working together, each element is needed to support our goals for this supplementary budget.

“We are eliminating zero-rated items to ensure that the application of VAT is as fair and equitable as possible.

“Simultaneously, we are introducing an overall decrease from 12 percent to 10 percent to bring net savings to every household and business, stimulating consumption and protecting against rising global costs.

“These changes have given the government leeway to bring further relief to the Bahamian people through the return of annual increments for civil servants, clearing up the promotions backlog, increasing pensions for civil service retirees, extending unemployment benefits, paying a $500 lump sum payment for all unemployment programme beneficiaries, and re-introducing the RISE programme for direct cash transfers to the most vulnerable.

“The stated measures allow us to provide more targeted relief that does not have the unintended consequence of disproportionately benefitting higher-income households more, which was inherent in the previous administration’s approach.”

Mr Halkitis accused the opposition of opting for political theatre instead of empirical evidence and expert advice.