NASSAU, BAHAMAS — Prime Minister Philip Davis and Opposition leaders clashed in Parliament on Tuesday over VAT relief, with both sides offering sharply different interpretations of who bears responsibility for the tax burden faced by Bahamians and whether recent reductions amount to meaningful relief.
Shanendon Cartwright, MP for St. Barnabas and Free Nation Movement Deputy leader accused the Davis administration of placing a prolonged burden on Bahamian households before attempting to take credit for easing it.
“This government has had its foot on the neck of the Bahamian people. For almost five years, the government has had its foot on the neck of the Bahamian people, and now they want credit for taking it off after keeping it there for nearly five years,” Cartwright said.
He argued that the VAT reductions recently announced should have been implemented years earlier, asserting that the Government had increased taxes immediately upon taking office.
Prime Minister Philip Davis announced during a national address on Monday night that on April 1, the Government will eliminate Value Added Tax (VAT) on unprepared food, calling the move a necessary step to ease the cost-of-living pressures still facing Bahamian families. He also announced expanded property tax relief for homeowners. Owner-occupied duplexes and triplexes will now qualify for the residential property tax exemption, alongside expanded concessions for first-time homeowners.
Cartwright however stated: “What they have announced, they should have done three years ago. They were the ones who said that if you elected the Free National Movement, they would increase your taxes, and the first thing they did when they came into office was raise taxes on the Bahamian people,” Cartwright said.
Prime Minister Philip Davis strongly rejected the claims, describing the Opposition’s statements as inaccurate and lacking specifics.
“This refrain that this government led by brave Davis increased taxes on Bahamians is far from the truth. Instead of just saying we increased the tax burden, perhaps the member ought to give further and better particulars as to where those taxes were imposed,” Davis said.
He emphasized that his administration has focused on relieving Bahamians of taxes while carefully managing the economy following what he described as a national crisis.
“What we did is relieve Bahamians of taxes. We said in our blueprint for change that we would reduce their tax burden, and that is what we did. But it had to be done responsibly. We inherited a country in crisis. Relief could not come at the cost of adding further burden to our people, so we approached it responsibly,” Davis said.
The Prime Minister cited the reduction of VAT from 12 percent to 10 percent as an early action by his Government, contrasting it with the previous FNM administration, which had raised VAT from 7.5 percent to 12 percent and reportedly planned a further increase to 17 percent.
“So what we did was immediately, upon coming into office, reduce the VAT from 12 percent — which was a 60 percent burden placed on Bahamians by the previous government within two years — from 12 percent to 10 percent,” Davis said.
He added that as economic conditions stabilized, the Government expanded VAT relief, including reductions on food items and a move to zero-rated VAT on certain essentials.
“As we stabilized the economy and saw recovery taking hold, we then further reduced VAT on food items by 5 percent, and we are now at zero for certain essentials because of what we have been able to achieve over these years,” Davis said.
The Prime Minister acknowledged that VAT had been reintroduced on breadbasket items but maintained that the overall impact still resulted in savings for Bahamians.
“The only thing is that VAT was reintroduced on breadbasket items. Yes, it was, but the net result still represents a savings for the Bahamian people,” he said.
Opposition Leader Michael Pintard dismissed the Prime Minister’s claims as misleading, particularly assertions that the FNM had planned further VAT increases.
“The Prime Minister continues to spin this tall tale. It’s untrue that the FNM was going to increase taxes. That is an untruth. What he is talking about is absolute nonsense,” Pintard said.
He also criticized the Government for failing to provide figures demonstrating the net impact of its tax policy decisions.
“This government has never brought any figures to show the net result of the tax choices it has made. The Prime Minister ought to do that exercise,” Pintard said.
Pintard further challenged the Prime Minister’s characterization of the economic conditions the administration inherited.
“The Prime Minister continues to talk about coming into government and finding an economy in crisis. When this administration came to power, the economy was already open. In fact, he presided over an economy experiencing double-digit recovery,” he said.
