The Tribune

By MICHAEL HALKITIS

Minister of Economic Affairs

In 2022, the Davis administration is laser-focused on moving The Bahamas beyond recovery into a period of robust, broad-based economic growth. This means building an economy that widens the circle of opportunity and lifts all Bahamians - not just a few.

In the first 100 days of the Davis administration, we have already made significant progress toward these goals. We have made good on our promise to provide pension payments, we have paid salary arrears, and repaired our schools to ensure they are ready to provide students with a safe and quality environment to learn. And we have re-opened our economy, resulting in hotel occupancy rates returning to near pre-pandemic levels and enabling Bahamians to get back to work.

Our goal is to ensure that every Bahamian feels the recovery. But recovering from a public health crisis and an economic crisis - one that saw record levels of unemployment and the most significant shrinkage of GDP and government revenue in recent history - will not happen overnight. There is more work to do.

That is why the Davis administration has committed to making long-term investments in our people and institutions that will benefit all our citizens.

Our investments will revolutionise our education system - the great equaliser - to ensure our children have the opportunity to be competitive on the global stage. They will enable us to harness our people’s full economic potential and resources by modernising our blue economy, accelerating the expansion of our green economy, and spurring innovation in our orange economy. We will make investments to support our entrepreneurs, usher in an e-Bahamas revolution, and build a modern, digital economy that will provide a foundation for future economic growth. And we will strengthen our social safety net so that all Bahamians can hold their heads up high, and with dignity, despite the challenges we have experienced.

These investments will ensure our economy works for all Bahamians. But to unlock this potential for our country, we need to restore our fiscal health and stabilise our public finances. This is why the Prime Minister has announced a commitment to achieve a revenue-to-GDP target ratio of 25 percent by the end of our five-year term in office, and re-established the Revenue Enhancement Unit (REU) with the goal of increasing tax revenue collection by $200m in 24 months.

Our focus is not raising taxes. In fact, we have already decreased taxes on all Bahamians by reducing the standard VAT rate from 12 percent to 10 percent across the board. Instead, our focus is on ensuring everyone pays their fair share. No longer will we allow a few honest Bahamians to responsibly pay their taxes while others refuse to do the same.

If the global pandemic has taught us anything, it is that we are all in this together. We are a nation of artisans and entrepreneurs, business leaders and labourers, but we rise and fall together as a society. And when we all do our part, we benefit one another and our country. So, if we want to invest in building an economy that creates an opportunity for all Bahamians, we all must do our part.

Everyone in The Bahamas should know that if you avoid paying your taxes, you fail to uphold your responsibility to your fellow citizens, and we can no longer tolerate this. That is why we have re-established the Revenue Enhancement Unit (REU) to focus on eliminating tax evasion and fraud in The Bahamas. The REU has been fully resourced and has begun addressing non-compliant taxpayers, including concentrating on nearly 50 percent of real property taxes that are not consistently paid.

I encourage anyone who owes taxes or Customs duties to come forward. The Government will continue to work with those who would like to comply but are unable to due to financial hardship. But for those who can pay what they owe and simply refuse to honour their responsibility, the REU will identify you and take the appropriate action.

A critical part of ensuring that everyone pays their fair share is ensuring that real property tax assessments reflect the property’s actual value. Yet despite how critical this is to a fair and equitable tax system, a complete re-assessment of all properties in New Providence had never been done. For years this meant people who built new homes but did not register them paid no taxes. And in many cases, people in high-value properties were paying far less than their fair share of taxes while others were compliant.

This unfairness is now over. When taxpayers in New Providence receive their 2022 real property tax bill, it will reflect an accurate assessment of their property’s value – the result of a multi-year re-assessment. This effort was led by the Department of Inland Revenue, which made a significant investment to ensure accuracy. Reassessments were conducted by experts and based on thousands of field inspections and data analysis, and leveraged the latest technology and global best practices.

This has long been a priority for the Government across multiple administrations. We promised to get this done for the people of The Bahamas, and we have now delivered on that promise.

By fixing the unfairness that has long been in the real property tax system, we have potentially unlocked nearly $450m in additional revenue over five years from real property taxpayers whose properties were either not registered or under-valued. And we have done all of this while not increasing real property taxes for nearly 70 percent of owner-occupied properties.

In fact, the Government is taking the unprecedented step of giving all owner-occupied properties a rebate of up to $312.50 on their 2022 real property tax bill. While property tax bills will now reflect a fair and accurate assessment of property value, we recognise that because reassessments have never been done before, taxpayers whose properties were either not registered or were under-valued would have experienced this correction all at once. This rebate will help mitigate the effects of this correction and provide relief to taxpayers.

These steps, and the ones that will follow, will ensure that we can put our country on the path to transformational growth. This effort will enable us to invest in our children, our country and the future of all our people. By working together and doing our fair share, we will rebuild a nation where all things are possible for all people.