The Tribune

When is a tax rise not a tax rise?

When it mostly affects foreigners, apparently. At least, that’s according to Minister of Economic Affairs Michael Halkitis, who says people are “splitting hairs” when pointing out that Prime Minister Philip “Brave” Davis made much of saying in his Budget communication that the focus would be on increasing revenue “without raising taxes”.

Mr Davis went on to list that there would be “no increase in the VAT rate, and no increase on Customs duties, excise duty, tax rates, and real property tax rates”.

He also talked of raising “much-needed revenue without adding any new taxes”.

It all sounded very good – but the devil is always in the detail.

One of the measures in the Budget that did not get a mention in Mr Davis’ speech, but is right there in the paperwork, is an amendment to the Passenger Tax Act, increasing the amount that passengers will have to pay. You will notice the word tax, right there in the name.

FNM leader Michael Pintard yesterday suggested that the Prime Minister had misled Parliament.

He said that a new passenger tax levy will see air passengers pay a total of $4 per round trip in and out of the country. Along with increases in taxes for boaters and cruise passengers under the same amendment, that is expected to bring in more than $100m in revenue.

As Mr Pintard says, “How then did the Prime Minister say that there are no new taxes in the Budget? It is frankly disturbing and embarrassing that the country’s chief executive would continually mislead Parliament and the public in such a glib and gratuitous manner.”

Mr Pintard also pointed to changes in immigration and customs that would delegate some taxation powers to the minister. The customs changes, he said, could see the introduction of a sugar tax without the need to seek parliamentary approval.

As for Mr Halkitis, he said most Bahamians believed “I’m concerned about taxes on me, right? So if you raised the departure tax on cruise ships, I don’t think you’ll get an argument from anybody because if you survey 100 Bahamians – 99 percent will tell you we don’t get enough from them anyhow.”

Perhaps they will, Mr Halkitis, but that doesn’t excuse not mentioning it. If Bahamians agree with you, all the more reason to herald the addition. And plenty of Bahamians also travel on cruise ships and by plane, so they will be paying too.

And if any of those increased charges cause a slowdown in the number of bookings we receive as it pushes the price of a trip a little higher, lots more Bahamians will be feeling it.

So yes, there has been an increase in taxation – albeit not in the bigger categories – and it is slightly disingenuous to say otherwise.

Whether that is misleading or a rhetorical overreach is a matter open to debate, but it seems unlikely to be an accusation that will halt the Budget in its tracks, or the Prime Minister with it.

Still, it does raise the question of why it wouldn’t be mentioned, especially if as Mr Halkitis says it would be popular with the electorate. And not mentioning such items as a possible sugar tax, possible increases to fees at immigration, or leaving out entirely the situation with regard to the National Insurance Board fund raises even more questions.

A Budget Communication should provide clarity and certainty, instead of leaving so many question marks hanging in the air.

The NIB concerns will apparently be addressed this week. We shall await with interest.