NASSAU, BAHAMAS — The government intends to collect more than 75 percent of the real property tax that is billed within the next four years, according to Prime Minister Philip Davis KC who noted that government currently collects less than 40 percent of the real property tax it is owed.
Davis made the comments while commencing the debate on the 2022 Fiscal strategy report and the medium-term debt management strategy for the fiscal year 2023/2024 and fiscal year 2025/2026. He sought to address some of the comments in the press about the fiscal strategy report itself.
“The basic fact is that we collect less than 40 percent of the real property tax that is billed annually,” he said.
“The Government of The Bahamas collects less than 40 percent of the real property tax that is billed annually,” said Davis, noting that the government’s revenue from real property taxes would be more than doubled if all real property tax billed, was collected.
“That has to change and to do so, we are making some necessary investments in technology and people. Within the next four years, our goal is to collect more than 75 percent of the property tax billed. Additionally, having completed the first mass re-assessment exercise in New Providence, over the next three years, we are embarking on a comprehensive real property tax reassessment exercise in the Family Islands. This is a key component of our plan to triple revenue from the family islands over the next two years.
Davis noted that this effort will be of substantial benefit to the Family Islands, due to the commitment that 25 percent of collected real property tax collected will go into the Family Island Development Fund.
“We have also intensified our efforts in respect of the collection of property tax arrears. The previous administration allowed contracts with private collectors to expire. We have reinstated them. I am happy to report that these efforts have already produced a very favourable, early harvest.”
He continued: “Another issue which has generated some erroneous commentary, relates to the fuel arrears amassed by BPL. The facts are simple: the spike in the global price of fuel, which was caused by the Russian invasion of Ukraine was the primary cause of the build-up of arrears by BPL. There was no negligence by the Government, and the false reporting of this fact does not make it so.
“The fuel hedges which were purchased, and which are still in place, are aligned to the fiscal year. When this administration came into office, the window for extending those contracts had closed, because of the still unexplained indecision by the previous administration. This is yet another example of the confusion, incompetence, and poor judgment which I referred to earlier. While overlapping arrangements were possible, given the liquidity challenges faced by the Government, to do so was not advisable.”
According to Davis, even if an overlapping hedge had been purchased, the impact of the Ukrainian crisis would have had a great impact on BPL.
Opposition leader Michael Pintard again insisted that the Davis administration’s actions had resulted in a 163 percent increase in BPL’s fuel charge. He further asserted that the administration’s failure to execute BPL’s fuel hedge strategy resulted in a $150 million liability for the government and alluded to the recently tabled Fiscal Strategy Report.
Prime Minister Philip Davis however maintained that the sum was legacy debt and was in no way connected to the fuel hedge issue.
