NASSAU, BAHAMAS — The government has no plans to raise the Value Added Tax (VAT) rate or any other tax at this point, Deputy Prime Minister and Minister of Finance K Peter Turnquest said today.
Speaking with reporters ahead of a Cabinet meeting this morning, Turnquest said: “Now is not the time to be talking about increasing taxes”.
He explained the government will try its best to manage with the resources currently at its disposal – something he acknowledged will require creativity and bold steps.
“There is no plan to go up on VAT or any other tax at this point,” he said.
“We certainly want to try our best to manage this as best we can with the resources we have. Bear in mind that this crisis is going to cost some significant loss in revenue to the government as it is to individuals and businesses.
“We are going to have to figure out how we are going to address that long term. One thing we cannot afford to happen is for us to amass significant debt that we saddle future generations with. We want to be careful with that and be as responsible as we can but at the same time we must understand that this is a difficult period. Job creation is going to be slow and this is not the time to be talking about increasing taxes.”
He continued: “We have to figure out some things to make some adjustments to ensure that we live within the means that the people have given us. It is going to take some creativity. It is going to take bold steps in respect to our state owned enterprises and how they operate to make them more efficient and less of a burden on the tax payers.”
Turnquest noted the world and country are in “tremendously uncertain times”.
“We certainly are very sensitive to the plight of the individuals as well as the businesses and what this shutdown and crisis has meant to their personal fortunes,” he said.
“We are doing our best to first ensure public safety and that is paramount and outweighs any economic considerations we might have. We recognized that the are some entities that provide critical services to the community that having been shut down for as long as they have, have built up a bit of demand”.
When asked to explain the rationale behind the government’s decision to open more businesses amid rising COVID-19 cases, Turnquest said: “I don’t know that one is necessarily connected to the other.”
“If you follow the schedule of openings and types of businesses being allowed to open and the insistence by the public health officials as to how these entities are to open, I believe the risks are being significantly considered and mitigated as best we can. This shutdown has been difficult and there are persons who have legitimate needs for services and goods to protect life and health.
He added: “We have to be sensitive to that and allow some relief for persons to be able to access those goods and services.”