NASSAU, BAHAMAS – While insisting that the Minnis administration’s fiscal consolidation plan for The Bahamas over the three years does not include increasing any existing taxes or introducing any new taxation measures, Deputy Prime Minister and Minister of Finance, Peter Turnquest said his ministry has continued to research various tax models to potentially respond to global shifts.
Turnquest said in that regard, “We are taking nothing off the table”.
He was responding to Clearing Banks Association (CBA) Chairman Gowon Bowe, who asserted last week that it would be “foolish” to leave any kind of corporate or income tax off the table as the government advances the restructuring of the country’s tax environment.
Bowe also noted that the government ought to consider diversifying its tax base if it wants to remain competitive in the global market.
In a recent interview with Eyewitness News Online, Turnquest said, “As I have always said, we are as a ministry, building our research capability to be able to do modeling and to do projections into the future to see what different taxation systems may mean for The Bahamas given the developments globally that we see in terms of digital transactions and shared economy and all these things, which we know will have some effect on our tax base.
“However, those medium to long-term considerations; in this, our current fiscal consolidation plan for the next three years there is not anticipation of any kind of corporate tax.
“There is no anticipation of any increase in value added-tax or any other tax at this particular point.
“So again, I take Mr. Bowe’s position and I think he shares the same that I do in terms of ensuring that we do the kind of research from a macroeconomic point of view to ensure that in the event there is any global shifting that affects our tax base, that we’re able to respond in a relatively efficient manner.
“This is not to mean that we have ruled in or ruled out.
“This is research and we want to develop our capabilities here such that when people ask us the questions ‘have you done the analysis, do you have the data’, we can say yes we have and this is what we produced — a quality, professional product — and that we are in fact looking and planning for the future.”
According to Turnquest, the ultimate goal is to achieve a range of models to test again domestic and international shifts.
He said a government should always have set of policy options, adding that the country’s fiscal affairs and constraints has largely been the result of a failure to properly plan in the past.
“We go from year to year based upon the priorities of the government of the day, without necessarily considering what the fiscal implications of that, not only today, but in the future,” he said.
“So, we are restructuring the Ministry of Finance to be more of a technical, research-driven ministry so that we can support the wishes and priorities of the government with fact.”