The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Governance reformers yesterday argued that the discretion afforded the minister of finance by proposed legislation enabling the introduction of so-called 'sin' or 'sugar' taxes is "too open ended".

Matt Aubry, the Organisation for Responsible Governance's (ORG) executive director, told Tribune Business that "parliamentary oversight" and other checks and balances need to accompany the Government's ability to raise revenue by taxes, levies and other fees.

Both the Customs Management (Amendment) Bill and Public Finance Management (Immigration Levy) (Special Fund) Bill give the minister of finance the power to introduce levies seemingly without going through Parliament's normal Budget and taxation processes.

The former, which provides for a health and wellness levy, stipulates: "The minister may, after consultation with the minister of health, make regulations providing for payment of a health and wellness levy on the import of specified goods, and domestically manufactured goods, deemed to have a negative impact on health and wellness."

In similar fashion, the Immigration Levy Fund legislation seemingly empowers the minister of finance to impose an additional, unspecified levy on work permit fees that will be used to finance Immigration enforcement, health and wellness promotion and education and training programmes.

Agreeing that the legislation provides the finance minister with too much discretion, Mr Aubry told Tribune Business: "When fees, levies and taxes become institutionalised, there should be structures that are very clear and they have a level of oversight when decisions are given. At the moment it's too open-ended in all honesty.

"We're seeing that play out a lot, obviously on the discussion over this potential sugar tax. If there's a broader fiscal strategy, and that strategy determines we are going to be moving to these types of fees and levies to drive a certain level of revenue, it should be structured, it should go through the same level of review and parliamentary oversight, and it should have the same dynamics or mechanism as any tax. How do you minimise that discretionary language."

Michael Pintard, the Opposition's leader, has also voiced concern over the levy-raising powers granted to the minister of finance in legislation accompanying the 2023-2024 Budget. Arguing that these changes “delegate taxation powers down to the minister”, he added: "The amendments would allow the minister unilaterally to establish and set rates for mandatory fees and levies to be charged to taxpayers.

“The Budget speech made no mention of a possible sugar tax or wellness tax, yet the Government is proposing an amendment to the Customs Management Act that would delegate to the minister of finance the ability to levy the much-discussed sugar tax without seeking parliamentary approval. This cannot be. If the PLP wants to implement a sugar tax, it must come to Parliament and get approval for the structure and for the rates.”

Prime Minister Philip Davis KC subsequently reassured that the Government has no plans to introduce a 'sugar tax' or any similar levy in the near-term. Mr Aubry, meanwhile, said the Economic Recovery Committee appointed by the Minnis administration in COVID-19's aftermath, and of which he was part, examined the 'sugar tax' concept and found it required broad-based education and community support and buy-in if it is to achieve its revenue and other objectives.

"We did some research on a 'sugar tax' in the Economic Recovery Committee. What we understood is that tax is only successful if accompanied by projects that involve an education aspect, a community outreach aspect and an engagement with education and health and wellness programmes," Mr Aubry added. "Then you get returns on your policy.

"You're trying to anchor that, have something more meaningful tied around the strategy of what you're trying to achieve. Part of the strategy is trying to reduce public health spending on the likes of diabetes and hypertension. That has to be tied to an economic strategy. Sugar is in everything. Sugar is in Starbucks, sugar is in fast foods. Where does that play out? Are we placing emphasis on reducing sugar consumption by financial means?"

Mr Aubry said it is harder to obtain broader buy-in and engagement from the community if they only see such reforms for the first time in legislation, rather than there being discussions and consultations on it beforehand. The Bahamian private sector also voiced misgivings about any introduction of a so-called 'sugar tax'.

Walter Wells, Caribbean Bottling Company's chief executive and president, told Tribune Business: "The debate makes it sound like sugary drinks are the cause of obesity in the country, and you and I know that's not true," he added. "It's calories in, calories out. If you eat more on a daily basis than you burn up, you gain weight. You cannot tax a country into good health, you need to educate the country into good health."

Kendrick Delaney, owner/operator of the New Duff, told Tribune Business that the Government would be better off implementing a national lottery rather than trying to implement a sugar tax that will not be effective in the long run.

"I believe that sugar taxes work extremely well as a revenue generator, but it's a poison pill for businesses, small businesses in particular, because the costs are really passed on to consumers, therefore making our products more expensive. I don't believe it's the best way to have the same outcome as reducing chronic care illnesses overall," he said.

“A better way to achieve that would be to be brave enough to ask the number houses to be nationalised and use those funds to train kids from a young age to learn the effects of sugar, fat and salt on their diets, as opposed to trying to fix this after the fact. Because if people are already addicted to sugar, how are we going to change that behaviour by increasing the cost of it on the business? It's not the best solution.”

Mr Davis, meanwhile, said there will be “no new taxes” on sugar products or otherwise. “We are attempting to cause Bahamians to understand what sugar is to their health. We have put a framework in place to determine whether or not it will be done, but nothing is happening in that regard and nothing is happening any time soon," he added.

“We're talking to industry to see how they're able to lessen sugar in the ingredients for sodas, etc, because the stats have shown it is one of the significant contributors to the non-communicable diseases, something that this country is struggling with as I speak. So know that that is not going to be done this year. I don't see it coming very soon either.”