The Tribune

By FAY SIMMONS 

Tribune Business Reporter 

jsimmons@tribunemedia.net

THE government must be more transparent about its spending, said Opposition leader Michael Pintard yesterday, saying that the FNM will not support any “additional revenue measure” until the Davis administration fully implements the Freedom of Information Act and abides by the Public Procurement Act.

“First, this Davis-led PLP administration should not come to the Bahamian people with any proposed

significant tax measure unless it is accompanied by a clear and documented plan to contain government spending and eliminate the wasteful and gratuitous spending by public officials and public entities," said Mr Pintard.

“Second, the FNM will not support any discussion on additional revenue measures until this administration fully implements the Freedom of Information Act and begins to follow the provisions of the Public Procurement Act which would provide the public with the details on who are getting government contracts and in what amounts. No more blank cheques for the Davis administration. They must show the Bahamian people how they are spending their tax dollars before asking for more.”

On Monday, the Davis administration released its draft domestic minimum top-up tax bill for consultation revealing its plans to implement a Pillar 2 corporate tax.

The 15 percent corporate tax on profits will apply to large multinational enterprises (MNEs) with at least €750m in annual turnover and is intended to ensure The Bahamas complies and fulfills its obligations as one of 140 countries that have signed on to the G-20/ Organisation for Economic Co-Operation and Development (OECD).

The consultation process will end on September 16, with the bill anticipated to be submitted for Parliament approval on October 9.

Mr Pintard criticised the Davis administration for not undergoing “robust public consultation and education” about the corporate minimum tax since its green paper was published last year and said the FNM did not receive a “substantive” response when it offered feedback on its implementation.

“This Green Paper was supposed to be the start of a fulsome national conversation and dialogue on major tax and fiscal reform. As is convention, the Green Paper ought to have been followed with robust public consultation and education – after which a White Paper should have been published with a clearly articulated policy and related strategy for tax and fiscal reform that would be informed by the outcomes of the national discourse and debate ” said Mr Pintard.

“Unfortunately, after we in the opposition and other stakeholders provided written feedback on the Green Paper as requested, the government abandoned the national consultation. We never received a substantive response. No public engagement was undertaken. No White Paper was prepared.”

In a letter addressed to Simon Wilson, Financial Secretary on July 31, 2023, Mr Pintard said he did not oppose a corporate income tax in principle given the international pressures and The Bahamas’ commitment to the G-20/OECD 15 percent “global minimum tax” drive. However, he added that the implementation of such a tax must be accompanied by “fulsome reform.... that would abolish” the current business licence fee regime that is levied on companies’ gross turnovers as opposed to net profits.

Mr Pintard added that The Bahamas has an “obligation to get it right” on tax reform through wide consultation, conducting the necessary empirical studies and seeking expert advice.

Also calling for a system of tax credits and incentives to be created for Bahamian firms that hire more workers, or invest in expansion, under a corporate income tax, Mr Pintard argued that should such a levy be implemented it must “respect” Freeport’s free trade zone status and not be imposed on the city’s businesses.

And the Opposition leader added that any tax reform, whether corporate income or otherwise, needed to align with the government’s fiscal targets and objectives of eliminating the annual deficit and cutting the debt-to-GDP ratio to 50 percent by generating sufficient revenues.