The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former attorney general yesterday urged all political parties to stop creating confusion around tax reform by simply “throwing things at the Bahamian people” in the general election run-up.

John Delaney QC, who held the post in the last Ingraham administration, told Tribune Business that too many politicians, commentators and private sector commentators were simply “pulling something out of a hat” with no empirical data or evidence to back their proposals.

With VAT rate cuts, and talk of personal and/or income tax options, dominating discussion in recent weeks, he argued that all were ignoring “the missing ingredient” that The Bahamas has lacked this entire century - the need for a “holistic” assessment of its tax structure that takes into account the government’s revenue needs, economic growth and the country’s competitiveness.

Arguing that the focus on individual tax measures is “doing a disservice to the Bahamian public” because it fails to provide them with the necessary information and understanding, Mr Delaney called on all political actors to clarify “their intentions so that people can assess whether their approach serves the national interest”.

“What’s important is that matters of a fiscal nature be done and addressed in a holistic manner,” the Delaney Partners’ law firm principal told this newspaper. “That is the missing ingredient in our recent 20-year history as to whether we as a country have examined how we raise revenue and meet our objectives, and make sure there is a system that is rationale and joined up to meet the country’s needs.

“This has to be done while meeting the objective of creating growth in commerce among businesses and individuals in a sustainable manner.” The release of the Progressive Liberal Party’s (PLP) so-called economic plan, though, has produced a focus on the more headline-grabbing elements such as cutting the VAT rate to ten percent for a year and the proposed minimum wage increase.

Railing against the emphasis on individual elements, rather than the collective, in tax reform discussions, Mr Delaney said: “If someone’s to say throw in corporate tax, or personal income tax, all these things are not advisable unless looked at in a holistic sense because you’re pulling something out of a hat.”

The government’s revenue requirements, the taxpayer’s burden and ability to pay, and the need to avoid so-called “double taxation” and “excessive hardship” among Bahamians were all issues that had to be studied and weighed carefully in any tax reform discussion, the former attorney general said.

“All of that does a disservice,” he argued of the concentration on separate elements. “All talk about individual tax measures does a disservice to the Bahamian public at large because it doesn’t present the information in a way that is helpful to the wider public in understanding the issue.

“It’s throwing things at them, and it comes across as ulterior motives being behind it; an attempt to curry favour here or there as opposed to dispassionate and realistic measures on what the public needs and the community’s ability to pay.”

Mr Delaney argued that “the cherry picking is happening all around”, including outside The Bahamas where the likes of the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD) are seemingly moving closer to attempting to dictate what this nation’s tax system should be.

“The question is what our considered agenda ought to be for the welfare of Bahamians, our country and sustainable development,” he added, urging that the fiscal/taxation system must enable The Bahamas “to navigate some of the tremendous difficulties we are currently facing”.

“I really hope that as we enter the political season that those offering to form the Government on either side make it clear what their intentions are so the Bahamian public are able to assess whether their approach is likely to serve the collective interests of the country,” Mr Delaney told Tribune Business.

“As I sit here, I don’t have the answers as to whether or not these tax reform options are going to create dislocation and be unwise for our economy. I haven’t done the assessment, and I don’t think others have done the assessment. I’m doubtful many of those pushing it internally or externally can say their conclusions are based on a comprehensive review as to revenue impact, economic impact and sustainable development objectives for growing the economy. I doubt many of them can say that.”