NASSAU, BAHAMAS – No increase in Value Added Tax (VAT) is expected as government presents its 2019/2020 budget in Parliament today, Minister of Finance Peter Turnquest confirmed yesterday.
The Minnis administration increased VAT from 7.5 percent to 12 percent last year, reasoning that the increase was necessary to lowering the country’s climbing debt.
“The government issued a three-year consolidation plan last year. In that budget document there is no indication of an increase in VAT,” Turnquest explained. “We explained very clearly that that plan would be sufficient and we are proud to say that we were faithful to that plan [and] it has been working.”
Ahead of today’s budget presentation, rumors circulated indicating that government was preparing to increase VAT again by 2 percent. But yesterday, Turnquest shot down those assertions.
“I take note of the fear mongering, particularly from the opposition who should know better. They do what they do because they have nothing else to talk about I guess.” Turnquest said. “It’s not anticipated that there will be any increase in VAT. The budget will be presented tomorrow (today) and generally speaking, you will be pleased.”
In an earlier interview, former Minister of State for Finance Michael Halkitis said that if the Progressive Liberal Party is successful in the next general election they will have to look at how the VAT rate can be reduced. Halkitis telling Eyewitness News at the time that 12 percent was too high and must be reviewed.
Meanwhile, several consumers expressed yesterday that it is their hope that this year’s budget will allow more money to go into the hands of Bahamians.
“I hope that they will look at ways of ensuring that the small man is able to benefit and not the rich getting richer as they have been doing,” one consumer said.
Another person suggested that government put more resources into policing to help further reduce the crime rate.
“We really need to solve this gun problem. If they put more money behind that we would be ok.”
Another said that government should revamp its education program so that more Bahamians can have better access to a higher level of education.
“We have to look at this and ensure that people repay their loans to giver other a chance. The more we educate our people the better off we will be.”
VAT was first introduced in The Bahamas in January 2015 under the Christie administration and increased under the Minnis administration last year.
Turnquest also announced an increase in police record fees, fingerprinting fees for casino employees and labor certificate fees.
He also announced a significant increase in gaming house taxes through the introduction of a sliding scale of rates applied to taxable revenue, which has since been reviewed and lowered.