NASSAU, BAHAMAS — Free National Movement (FNM) Leader Michael Pintard said yesterday that while the opposition understands the government’s argument for taxation across the board as part of its reduction of value-added tax (VAT) slated for next month, it ought to reconsider exempting certain items based on the potential impact on Bahamian families.
VAT will be reduced from the current 12 percent with exemptions and zero-rated items to 10 percent across the board with few exceptions.
During a virtual press conference, the FNM leader suggested that as part of that those changes, the Department of Social Services ought to be prepared to help defer the increased cost on Bahamian families as a result of the tax on breadbasket items for example.
Pintard said the opposition did not oppose the decrease, but cautioned the government to share its plans on how it will make up that shortfall of some $200 million that would have been earned if the rate remained at 12 percent.
The government has said increased collections and increased spending as a result of the reduction in the tax would have this effect.
“We are willing to work with the government to come up with a comprehensive tax policy plan that would enable us to take the burden that VAT, which is a regressive tax, has placed on the Bahamian people, first by the PLP government and then secondly by the FNM when it was increased to the 12 percent,” he said.
“The other thing we say to the government is that we believe that it is in error; it was an error to make the decision to impose the VAT on the breadbasket items.
“In fact, the breadbasket items, the mix of those items ought to be changed to include much healthier items, but again we believe that those Bahamians that struggle spend a greater percentage of their salaries on breadbasket items in order to feed their families and we should have looked at exemptions.
“I understand the discussions that have been held by some members of the prime sector and the government that you needed a uniformly low VAT rate and that increases the chance of collection.
“Well, that’s an internal mechanism that allows governments to be effective in its collection of its taxes. So, that [is] convenient for government, but it’s grossly inconvenient for the Bahamian people who are affected by this change from zero now to 10 percent on these items.
“And that would not be irreversible in terms of the harm if we found other ways to benefit the population beyond the additional allocation to Social Services, which we argue provides a safety net for some of those who will be adversely affected by the increase on breadbasket items.”
As it relates to the Progressive Liberal Party’s (PLP) first 100 days in office, Pintard suggested that while the Speech from the Throne created optimism among the electorate, there remain serious concerns.
However, he said some actions of the government warrant credit, including adopting recommendations to modify the entry requirements into the country as cases of COVID-19, though he said these measures ought to have been adopted sooner.
The FNM leader said there is still a need for a comprehensive plan to mitigate the spread of COVID-19 and the FNM is “waiting for inclusion”, though he said Minister of Health Dr Michael Darville reached out to the opposition last week.
He also said there is a need for a bipartisan approach on some of the issues, ranging from the vaccination education campaign, noting that some Bahamians and residents have not gotten the message that “we are in crisis”, and crime.
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