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PM Wants New Revenue Sources

Prime Minister and Minister of Finance Perry Christie said the government must diversify its revenue sources.

Mr. Christie made this statement as he addressed the opening ceremony of the World Customs Organization IT Conference and Exhibition at the Our Lucaya Resort in Grand Bahama on Wednesday.

“Customs administrations worldwide play a key regulatory role in their countries. The Bahamas is no different with customs contributing significantly to revenue generation in the course of border protection. In the case of economically advanced countries however, the role of customs has shifted from being primarily responsible for revenue collection to one focused on border protection and control,” the prime minister said.

He added that The Bahamas has relied heavily on import duties and taxes as a source of revenue like many other Small Island Developing States and small vulnerable economies, to fund government expenditure for public goods including education, health, social security, and of course public sector salaries.

“Direct customs duties and taxes account for approximately half of the total revenue collected by The Bahamas Customs and Excise Department, which translates into approximately 25 per cent of total government revenue. As I have stated in other forum, this situation is not sustainable. Global economic realities dictate that the government must diversify its revenue sources,” Christie said.

“We have implemented the economic partnership agreement (EPA) as part of the Caribbean Forum with the European Union, which requires customs duties and taxes on a broad range of products to be reduced in the coming years. The ongoing CARICOM-Canada negotiations to liberalise trade will no doubt lead to a reduction in tariff rates even further.”

Prime Minister Christie further stated, “In addition the government of The Bahamas has commenced the accession process to the World Trade Organization. WTO obligations will require further commitments on our part to reduced reliance on customs duties and taxes.

“It is clear that the trend for direct customs duty and tax rates is downward. Without alternative sources of revenue the Government of The Bahamas could inevitably face significant revenue challenges.”

On January 1, 2015, as other small economies have done, the government introduced value- added tax.

Stating that the government recognizes the importance of improving the revenue collection capabilities for the existing taxation areas, the prime minister added that raising revenue is not just about introducing new taxes.

The government’s efforts in collecting revenue are very consistent with the theme of the conference, “Inclusiveness through Information Technology.”

Mr. Christie said, “It is in our interest here in The Bahamas to pursue an inclusive approach to the introduction of the new IT systems. These new systems must bring benefits, not only to government, but also to commercial operators and to the general public who will use these services.”

“This, aggressive drive for automation of course includes the Bahamas Customs and Excise Department, which, even with the decline in direct customs duties, will continue to be a very significant revenue collection agency. The investment, by the Government of The Bahamas, in Trade Sector Support Programme, funded by a loan from the Inter-American Development Bank indicates the level of importance we place on having a modernized and efficient customs administration,” the prime minister said.

With the programme in full swing the WCO Conference and Exhibition could not have come at a better time, he said. The Bahamas Customs and Excise Department will have the opportunity to share ideas with and gain knowledge necessary for operating in a modernized customs environment.

“Of course this conference is not just about The Bahamas. It is an international conference, which provides a great opportunity for participants to discuss strategies and share ideas on an important topic which can have a profound impact on international trade,” the prime minister added.

With representatives from over 75 countries, the prime minister welcomed the group and said he hoped they enjoyed their beautiful surroundings.

Once it was clear that the World Customs Organization had chosen The Bahamas for the global conference, he ensured that it was possible to host the event in Freeport.

“It is no secret that the countries of this region have suffered significantly from the global economic crisis. Recovery from the crisis has been slow. The Bahamas is now showing signs of sustained recovery. My government wants to ensure that this recovery is felt all throughout The Bahamas.

“The hosting of this WCO event, which is quickly following on the heels of the very successful IDB Caribbean Governors Meeting, is one example of the government’s commitment to bringing business opportunities to Grand Bahama.”

Consisting of 179 member administrations, the World Customs Organization is recognized internationally as a driving force of international trade facilitation.

“Delegates will recall that the WTP concluded negotiations on a Trade Facilitation Agreement at the Bali Ministerial Conference, in December 2013.

“A subsequent study conducted by the Organization for Economic Cooperation and Development (OECD) concluded that implementation of this agreement, even on a partial basis could result in the reduction in international trade costs of approximately 12 per cent.”
The WTO Trade Facilitation Agreement, he said, owes a lot to the technical work already carried out at the World Customs Organization.

With Freeport being the host country, said the prime minister, the island is in distinguished company with the conference having been held in places such as Brisbane, Australia, Dubai, United Arab Emirates, Johannesburg, South Africa and Seattle, USA.

Prime Minister Christie told the delegates that Grand Bahama has a lot to offer in terms of commercial activity and tourism.

The island has a 240 square mile free zone area, which is always open for new business; a major container port, which as the capacity to handle the largest container ships, including the new mega-ships; a pharmaceutical plant and other light manufacturing facilities; The Grand Bahama shipyard with its ship repair facilities; and oil refining and bunkering facilities.

“These are just a few examples of the great business potential here in Grand Bahama. Ladies and gentlemen, apart from business opportunities we have fantastic tourism products available, not only here in Grand Bahama, but throughout the entire country of The Bahamas,” he said.

Written by Jones Bahamas

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