NASSAU, BAHAMAS — The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) is not satisfied with the government’s ‘Robin Hood-style approach to pursuing perceived wealthier companies,’ highlighting its adverse impact on consumers and smaller enterprises while advocating for a more strategic and collaborative strategy.
The BCCEC, in a lengthy response to the 2024/2025 budget, lauded the government for several initiatives while also raising some concerns. Prime Minister Philip Davis has indicated that his administration intends to pursue the country’s largest and wealthiest taxpayers to ensure they pay their fair share, aiming for a more equitable distribution of the tax burden.
The BCCEC in its statement noted: “The BCCEC and its members lament the ‘robin-hood’ approach to revenue reform being presented by the budget as it seeks to attempt to balance the budget by increasing related fees for perceived wealthier companies, which will still ultimately impact the consumer as these increases will inevitably find themselves on the backs of smaller companies and consumers who rely on these larger companies for goods and services. We encourage a more strategic approach to revenue increases with input from organizations like the Chamber, which often provides viable alternatives as recommended by its members and financial experts.”
The BCCEC lauded the government for fiscal reforms that have resulted in a deficit reduction, EU blacklist removal, B1 credit rating with a stable outlook, climate finance measures, and increased external reserves.
However, it stated, “We remain concerned over the invasiveness of new practices and policies, lack of business community inclusion in decision-making, seemingly limited consultation with industry experts, cumbersome restrictions that impede the ease of doing business, and limited measures to strengthen the country’s MSME landscape.”
The BCCEC added: “The budget debate lorded the increase in external reserves by $547 million to $2.9 billion due to net foreign currency inflows from the private sector rather than borrowing, and while we appreciate the letter of the law, we are concerned that this seemingly welcomed increase has instead been met with contempt for the business community rather than embrace, with invasive inspection strategies toward compliant businesses for documents easily obtained through portal access.”
The BCCEC pointed out that tax revenue increased from July 2023 to March 2024, but its impact on the business community was overlooked. Despite framing increased business costs as fiscal prudence aimed at boosting 24/25 revenue to $3.4 billion, expenditure remains high at $3.61 billion, raising more questions. The organization suggested that the government might benefit from consultative fiscal reforms focusing on controlling expenditure rather than imposing more revenue burdens on the electorate.
“While we note, with keen interest, the suggestion of more public-private partnerships, government-guaranteed loans, and reform of State-Owned Enterprises, we are concerned over the lack of collaboration with the business community through entities like the BCCEC, ORG, and SBDC, which are in the trenches with those most impacted by these reforms. We strongly believe that genuine consultation with stakeholders is the route to better outcomes. The new budget was touted as a tax-free vehicle; yet, the six-month delayed business license tax conundrum has only exacerbated the already confusing system overhaul at the Department of Inland Revenue (DIR), potentially favoring unregulated businesses over compliance. Additionally, the introduction of Cloud Bahamas in January 2025 to standardize compliance is commendable, but we hope for public training or stakeholder involvement to prevent a repeat of the DIR’s past dilemmas. The BCCEC welcomes the opportunity to collaborate with the government to ensure that the voice of the business community is considered in such changes.”
The BCCEC lauded the announced decrease in the deficit to 3.8 percent of GDP due to taxes; however, it expressed concern that the budget lacks an adequate plan to address the inflation crisis.
“Additionally, while the allocation for national capital infrastructure is commendable, there appears to be no concrete plan to engage the Bahamian business community in projects such as new hospital construction, Bay Street redevelopment, upgrades to national historic sites, airport construction, hotel sales, acquisition of the Bazaar with surrounding properties, and the Rodney Bain Building, among others. We will be watching closely for outcomes and will continue to engage our members to explore potential opportunities from these projects.”
The BCCEC further noted, “The robust energy reform appears to have included Bahamian involvement but overlooked input from non-governmental energy experts, environmentalists, and the business community. Moreover, despite assertions that only general service companies should expect bill increases, we question the control and segregation mechanisms in place to accurately and consistently monitor and bill such accounts. We welcome the opportunity to offer the government viable alternative energy solutions available 24/7, unlike solar, utilizing oceanic currents, waves, and wind energy, as discussed with experts.”
The BCCEC welcomed stricter measures to dismantle gangs through anti-crime measures, noting member concerns over increased residential and commercial robberies.
The BCCEC acknowledged the expanded duty concessions and reduced rates but questioned the process of determining these specific measures.
“Were there business community surveys or feasibility studies conducted? Was there consultation with organizations like the BCCEC and SBDC, which interact daily with the business community? Additionally, while no new taxes have been introduced, the government has increased fees on governmental services where the cost of providing the service has risen. For instance, the fee for customs entries over $750,000 has increased from $750 to $1,000, leaving our members to wonder about the increased level of service provided under the same system requirements and entry specifications as those below this threshold,” the BCCEC queried.
The BCCEC also noted that the introduction of the International Business Income tax, as previously outlined, is problematic without proper legislation, continued consultation, and input from the business community through entities like the BCCEC, which relies on expert opinion from its members and tax reform committee.
