Letters to the Editor: When Will the Government Cease With the Constant Tax Increases?

Dear Editor,

In a news article on Monday, September 23rd, 2024, it was alleged that the Department of Water & Sewerage “proposed” raising the cost of water and imposing a tax on private wells. This recommendation is simply too much, and enough is enough! The Bahamian people have been burdened by an unrelenting series of tax increases since September 2021, and now we must ask: WHEN WILL IT STOP?

We are living in an economy that has become unbearably expensive. Since this administration took office, we have seen hikes in electricity costs, National Insurance Board (NIB) contributions, fuel prices, and now water. The list is endless. Between 2021 and 2024, taxes have increased across nearly every sector, driving up the cost of living for everyday Bahamians. Here is a look at some of the most significant increases over the past three years:

1. Value-Added Tax (VAT)—In January 2022, the VAT rate was decreased from 12% to 10%. However, despite initial promises that it would ease the tax burden, this so-called “relief” has not brought any actual respite but rather an overall increase in the cost of goods and services.
2. Electricity Fees – In May 2023 Bahamians were hit with an additional fuel surcharge, increasing electricity bills by an average of 40%. This is especially burdensome as we live in a hot climate where air conditioning and refrigeration are not luxuries but necessities.
3. National Insurance Board (NIB) Contributions – In early 2024, we faced yet another increase in NIB contributions, placing further pressure on both employers and employees who are already struggling with high costs.
4. Water and Sewerage Fees – Water prices have surged by 12% as of June 2023, and now, in September 2024, another increase threatens to be on its way. This is making it difficult for families to afford a basic necessity.
5. Other Government Fees and Permits – From car registration and business licenses to boat permit fees, costs have risen across the board, creating additional barriers to starting or maintaining small businesses.

We must acknowledge the serious toll these financial demands are taking on the Bahamian people. The cost of food, gas, and housing has already made it difficult for families to make ends meet. Global Statista published a study on July 25th 2024, stating that the average Bahamian earns less than $40,000 per year. How is a family supposed to survive with increasing expenses eating away at their already modest incomes?

This tax increase on water, along with the private well tax, would be felt most severely by those in the Family Islands and the Over-The-Hill communities. Many of these residents rely on private wells because it’s their only viable source of water, especially given the rising costs of public utilities. Families are already struggling with the increased costs of gas and basic necessities, and now they must face even higher utility bills and more fees. It’s hard not to feel like the government is out of touch with the everyday struggles of Bahamian families.

When landlords and essential service providers like gas companies raise their prices to account for these tax hikes, the cycle continues. Inflation trickles down, and Bahamians are left to bear the burden once again. More people will struggle to pay their bills, more families will be forced to make heartbreaking sacrifices, and those who are already on the brink of poverty will sink deeper into despair.

Where does this end? The government cannot continue to tax its citizens into the ground. Bahamians are resourceful and resilient, but these constant increases leave us with little room to breathe, much less thrive.

Here are the inevitable outcomes if this pattern continues:

• An increase in the cost of living for all citizens, particularly those in vulnerable communities.
• Families will be forced to make difficult choices between basic necessities.
• An increase in poverty and financial instability across the nation.
• Reduced business growth, as higher costs lead to reduced consumer spending.
• Further pressure on our already strained social services as more people struggle to cope.

There are solutions the government could explore that do not involve constantly increasing taxes. For example, the administration could focus on improving efficiency in public services, eliminating wasteful spending, and finding innovative ways to stimulate economic growth. By encouraging small business growth by waving government fees, providing incentives for green energy solutions, and reducing bureaucratic red tape, we could create a more sustainable economy without overburdening citizens with taxes.

It’s time for the Government to realize that its policies are hurting the very people it was elected to serve. We need responsible governance that prioritizes the well-being of the Bahamian people, not a continuous cycle of tax hikes that drive families deeper into hardship.

Written by: Heather W. McDonald