The Tribune

THE past week has seen a political back-and-forth over a report from the International Monetary Fund (IMF).

Prime Minister Philip “Brave” Davis used the report’s existence to claim that the FNM were planning to increase Value Added Tax (VAT) to 15 percent, based on its recommendations. Now former Prime Minister Dr Hubert Minnis said not so, and he’d never even seen the report.

But there’s more to the report than just that – with the IMF also suggesting that The Bahamas gets ahead of the international move to introduce a global minimum corporate tax rate of 15 percent.

There was also the prospect of a personal income tax on high earners.

Now there’s the political knockabout getting in the way – these were after all recommendations and are as binding on the new government as they were on the old, which is to say not at all. At the same time, though, Dr Minnis may not have laid eyes on it personally, but his former Minister of State for Finance Kwasi Thompson certainly seems to have done.

It was already well known that there is a push by the US in particular to ensure the global corporation tax is introduced, IMF report or not. Perhaps these are some of the “headwinds” that Dr Minnis referred to as reasons why he called an early election – though it’s hard to know given how he hasn’t given any specifics.

Either way, there is a bigger picture here than the finger-pointing between one party and another – and that is the issue of tax reform for our country.

The issue of corporate tax isn’t going away anytime soon – so we would be unwise to bury our heads in the sand about it. It’s not an issue being put forward by one party or the other, but an external pressure that we have to decide what we are going to do anything about.

Mr Davis’ policy of cutting VAT by two percent, meanwhile, has been highlighted in a University of The Bahamas report as potentially worsening the fiscal deficit and the debt-to-GDP ratio.

After Hurricane Dorian and the pandemic, we don’t have a lot of wiggle room in our economy, and precious little leeway at all when it comes to the level of our deficit and our debt.

The proposals in the IMF report will come up again – so don’t focus on the fingers of blame, focus on what is being done to raise our economy again, and how we will face the international pressure on taxation.

Whoever won the election was going to face these issues. So let’s hear what we’re doing about them, not who is to blame.

Cotton Bay

When Sir Franklyn Wilson criticised the “terrible public policy” of former Prime Minister Hubert Ingraham after the signing of a revised Heads of Agreement for the Cotton Bay project, there was always going to be more to the story.

Mr Ingraham himself weighed in yesterday on the matter, and bringing more details to the table.

According to Mr Ingraham, his stance was that he would not approve further purchases of land in South Eleuthera until the man behind the project, Dr Luis Carlos Sarmiento, made progress with the agreed development.

In other words, if you want more, get on with what you’ve already agreed. That doesn’t sound like bad public policy at all – in fact, it sounds the opposite. Why give away more to someone who hadn’t started what they’d already promised?

Other steps were taken – including acquiring and redeveloping the airport.

The project has taken a long time – with Mr Ingraham lamenting that it had not moved forward in the past 25 years – and hopefully the way forward will be smoother, and faster.

But credit to Mr Ingraham for not giving away everything while seeing nothing when it came to progress. Expecting investors to live up to their promises is something we ought to see more of, not less.