Prime Minister and Minister of Finance Perry Christie Monday afternoon restating the government’s commitment to its fiscal consolidation plan saying that the various reform and modernization measures implemented in respect of recurrent revenue have “borne fruit” and produced the targeted, significant increase in the revenue yield of the tax system.
He says proof of this can be seen in the rise of the country’s Gross Domestic Product (GDP) from 16.3 percent when the Progressive Liberal Party (PLP) took office to a current 22.5 percent at the end of this fiscal year.
“Also important have been the comprehensive reform and modernization exercises that we launched in our major revenue areas, including Customs, Real Property Tax and Business License,” Mr. Christie added.
“The further development of the new Central Revenue Administration will also contribute importantly to revenue compliance and enhanced collections going forward.”
The government has also been given funding to provide the Royal Bahamas Defense Force (RBDF) with three modern bases of operations throughout the archipelago in addition to funds that would give the RBDF new vehicle and motorcycles in New Providence and other islands.
Furthermore, Prime Minister Christie pointed out that it is important for Bahamians to note that his government completed an assessment of airports throughout the Bahamas in which it was indicated that recommended improvements could amount to $150 million as well as new accommodations for the Post Office Department.
It is via a medium term plan that he expects the fiscal measures his government has implemented to achieve numerous fiscal goals.
These include the improvement of recurrent expenditure, revenue yield of the tax system, capital expenditure, Government Finance Statistics (GFS) deficit elimination by 2019 as well as significant new investments for national security.
“In the 2016/17 fiscal year, Recurrent Expenditure is estimated at $2,321 million, an increase of $166 million from its projected level this year,” he said.
“The bulk of that increase corresponds to a higher level of Debt Redemption payments, by some $102 million as compared to its level in 2015/16. However, I will stress again that the higher level of Debt Redemption will have no bearing on the GFS Deficit in 2016/17. Going forward and, in line with the commitments contained in our Medium Term Fiscal Consolidation Plan, we are asserting that Recurrent Expenditure will be further constrained and projecting that it will decline as a percentage of GDP beyond the coming fiscal year, by one percentage point or more per year.”
