NASSAU, BAHAMAS —The government must now move into a mode of seamless implementation of its revenue enhancement initiatives to hit its 25-percent revenue to GDP target, a governance reformer said yesterday, while noting the window for success is “extremely narrow”.
Hubert Edwards, head of the Organization for Responsible Governance’s (ORG) economic committee was commenting on the Ministry of Finance’s press release on the government’s efforts hit the revenue target by 2025/2026.
He said: “Regardless of how the recent conversations have been framed, the bottom line issue faced by The Bahamas is the extent to which it is able to generate sufficient revenue to meet its obligations. This paper by the Ministry of Finance (MoF) goes to the heart of that conclusion and should go a far way in allaying some concerns. Specifically, the paper is likely to have a positive impact on the credit market primarily because of the underlying reforms suggested.”
Edwards said: “In my opinion, by outlining firm initiatives, quantifying impact together, and detailing a number of crucial administrative and legislative reforms the MoF has sent a clear signal of commitment while seeking to reassure the reasonability of its revenue projections, and by extension, the veracity of the deficit trend forecast to 2025/26. This is fundamental to the near and mid-term fortunes of the country and is, therefore, a big positive.”
Edwards noted that pursuing the 25 percent revenue-to-GDP is imperative for the economic future of the country.
“The paper accurately conveys a sense of urgency while underlining the implications of not being able to improve tax revenue. In this regards it should prove extremely useful in shifting the nature of the debt conversations and conveying greater confidence,” he continued.
“Taking into consideration that the paper was completed in March, one would expect these result to start materializing over the next six months or so. Reestablishing of the Revenue Policy Committee and the Revenue Enhancement Unit; strengthening the DIR; initiatives, etc. are very clear initiatives and reiterate discussions from the budget presentation and the fiscal strategy report. On balance, a few appears more speculative in nature but this, in my view, has not significantly diminished the value of the presentation given the stated ease of implementation,” said Edwards.
According to Edwards, the Davis administration must now “move into a mode of seamless implementation”.
“The window for success is extremely narrow but there appears to be reasonable possibilities. While the ultimate target is to get to 25 percent realizing the trajectory of reducing deficits, as projected in the 2022/23 budget, is fundamental to the desired impact of plans. The Ministry of Finance should be commended for responding in such a comprehensive manner and we look forward to and anticipate positive outcomes over the ensuing months,” said Edwards.
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