The Tribune

By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

FREE National Movement deputy leader Shanendon Cartwright continued his criticisms of the government yesterday over its position that value added tax will not be removed from breadbasket items, saying it was a betrayal to tens of thousands of Bahamians who need relief.

Mr Cartwright in recent weeks has continued to urge the government to remove the tax from the items, which were zero-rated under the previous Minnis administration.

On Friday, Economic Affairs Minister Michael Halkitis said removing VAT from the breadbasket was not feasible at this time.

“Bahamians need relief,” the St Barnabas MP said in a press statement yesterday. “The government’s defiant proclamation that they will give no consideration to tax relief to tens of thousands of Bahamians and continue their 100 percent tax increase on breadbasket items and medicines is short-sighted and simply a betrayal to tens of thousands of struggling Bahamians.

“The announcement that VAT on breadbasket items is here to stay means that the pain and struggles for many poor, working and middle class Bahamian families is here to stay as well. This struggle will unfortunately continue everyday the government refuses to bring tax relief to the most vulnerable as they did for multi-millionaires.

“On behalf of the Bahamian people we call upon the government to reconsider and not dismiss the cries of the people.”

Since the tax was implemented in January, the government has frequently come under attack from the opposition, which has sought to portray the Davis administration as insensitive and heartless in view of the move.

Some in the business community have also backed calls for the removal of VAT on the food items, including Super Value’s President Rupert Roberts.

Asked to respond to those calls, Mr Halkitis maintained that the government did not intend to change its position on the policy, which he said followed best world practices and expert advice.

“It’s not feasible,” Senator Halkitis said during a press briefing at the Office of the Prime Minister Friday.

“When we first introduced it at seven and a half percent, our advice after considerable deliberations and discussions and back and forth with the private sector, with academia, with scientists and scholars - the best policy is to have a low rate with minimal exemptions which is what we did and it was very effective and lauded around the world as being effective.”

“When the FNM administration came in in 2018 and they made a promise that they would take it off the breadbasket items which they did, but at the same time that they took it off the breadbasket items, in order to be able to do that, they raised the rate from 7.5 percent to 12 percent and so I hear this call coming mostly from the political corners about doing this because okay, it’s a good political point to make, but to recognise that when you begin to introduce exemptions, the only way you can do it is if you pay the higher rate on everything else.

“So, we have studied this and we’ve gone back and forth and our best advice is a lower rate that’s the 10 percent, lower than the twelve, but with minimal exemptions because it’s more efficient and again, it’s not something that we did haphazardly,” he also said.

In January, VAT was reduced from 12 percent to 10 percent across the board with few exemptions, but also reintroduced on breadbasket items.