Paying off inherited past-due arrears had been govt’s justification for VAT rate hike
$26M in payments remaining in schedule
NASSAU, BAHAMAS — The government settled $52.3 million in payment arrears in the nine months ending March 2021, according to the Ministry of Finance.
The ministry, in its nine-month report on budgetary performance for the period July to March of fiscal year 2020/2021, noted that approximately $289.6 million has been settled to date versus the total scheduled $315.6 in government arrears payments.
The Minnis administration has argued the value-added tax (VAT) rate hike from 7.5 to 12 percent it introduced after taking office was necessary to pay off the past-due government arrears it inherited, which had no budgetary allocation.
Elsewhere, it was noted that government subsidies, which represent transfers to government-owned and/or controlled entities or private sector partners who provide goods and services to the general public, increased by $19.2 million (6.2 percent) to $330 million and represented 89 percent of the budget allocation.
“Subsidies to public non-financial corporations were elevated by $22 million (7.6 percent) over the comparative period to $310.6 million,” the report noted.
“Included in this amount are: $11.2 million in additional assistance to Lucayan Renewal Holdings; $2.6 million assistance to Water and Sewerage Corporation; $34.5 million in payroll and operational support for Bahamasair; $4.1 million in operational support to the Airport Authority; and $4.6 million to Nassau Flight Services.
“Transfers to private non-financial enterprises and other sectors contracted by $0.5 million (2.5 percent) to $19.4 million.”
