Categorized | National News

“Expect Higher Taxes” – -Davis paint grim picture

Opposition leader Phillip Davis is warning the public to expect increased taxes in the new 2018/ 2019 budget of  the Free National Movement government . 

In a statement released yesterday, the opposition leader claimed that the public can expect an increase in the VAT rate  to offset the elimination of VAT on certain goods and services, an increase in selective customs, excise tariff rates, and real property taxes, the introduction of new and additional taxes, among other effects due to the “anemic” revenue growth over the past fiscal year. 

Further, Mr Davis said, “the  introduction of new and additional taxes to fund the deferred capital expenditure and assist in the ambitious deficit reduction target of the draft Fiscal Responsibility can be expected.

Mr Davis also projected no real increase in the recurrent allocation for any of the critical areas such as health, education and national security. He said the manpower and skills deficit in national security, health and education would continue to widen.

“A freeze on public service increments or a reduction  of public service employment levels;  Public sector salary increments automatically upwardly adjusted recurrent expenditure by about 1 percent per annum; Increments along with  the increase  in interest expenses and  principle amortization would likely breach the  3 percent rule,” he said.

Mr Davis  said reduction in subvention to public corporations would certainly mean job losses.

The Member of Parliament for Cat Island, Run Cay, and San Salvador said that the Free National Movement (FNM) administration lacks a growth agenda to push the country forward. 

He said, “In the first year in office,  many of the gains made by the previous administration have evaporated.  For example, there has been anemic revenue growth notwithstanding the opening of Baha Mar.  Revenue for the first 9 months is trending on par with actual revenue for the last fiscal year. This is disturbing as the last fiscal year’s revenue yield was decimated by Hurricane Matthew.”

Mr Davis said, “With the phased opening of Baha Mar and the absence of major storms impacting New Providence, revenue yields should have been at least 10 percent  above the last fiscal year.  A  5 percent  increase in recurrent revenue would have allowed the Government to fully execute its capital budget.”

On the expenditure side of the budget, the opposition leader expressed concerns about the “widespread yet very selective terminations of contractual workers”.

He  said, “Expenditure levels have not dropped in comparison to last year. This is concerning , as vendors are not being paid on a timely basis to such an extent that arrears have risen to levels which is creating unsettling chatter among the business community about the Government’s solvency.” 

Mr. Davis also addressed the expectations of the public service. 

He said that in critical areas like health, education, infrastructure, and national security need more resources and improved services on par with more developed countries. 

He also spoke on the FNM’s public policy promises which include eliminating VAT on a variety of goods and services, introducing economic empowerment zones in New Providence, providing free tuition at the University of The Bahamas, increasing public private partnerships, and drafting a Fiscal Responsibility Act to keep recurrent expenditure growth less than 3 percent  of the previous year’s level and or less than the growth in nominal GDP. 

He said that for a government without a real growth agenda, this is a bleak outcome and a recession inducing budget. 

Written by Jones Bahamas

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