The end of May saw Deputy Prime Minister and Minister of Finance Peter Turnquest deliver the Budget Communication 2017/18 in the House of Assembly.
Speaking in Parliament May 30, Turnquest (pictured, centre, carrying the red briefcase) said that the current administration was looking at a number of ways to generate additional revenue, including a sliding scale of taxation on gaming house activities and an increase in immigration fees.
Turnquest also said there will be an introduction of new port fees; the Real Property Tax on foreign-owned vacant land to 2 per cent of value, up from 1.5 per cent; licensing fees on large commercial vehicles by $50 for Class B and Class C vehicles; and increases to police record fees, fingerprinting fees for casino employees, and Labour Certificate fees.
He said: “Most substantially, the government is proposing an increase in the rate of Value Added Tax from the current 7.5 per cent to 12 per cent effective July 1.”
He said, “Our government fully appreciates the sacrifice that the substantial increases in the VAT rate and other taxes will represent for our citizens.
“But as I have repeatedly said on record: this government was elected to do what is right for the welfare of the country and not to do what is politically expedient or politically popular.”
A few days earlier, Turnquest had also emphasized the need for better auditing of public finances and business revenues.
During his address to the Institute of Internal Auditors May 25, Minister of Finance Peter Turnquest said that the government is looking to strengthen the country’s cadre of VAT auditors, as well as promoting “transparency, integrity and accountability” in business.
The Ministry of Finance is currently recruiting 30 accountants: 15 of them will support the needs of the central government as it transitions to accrual accounting and undergoes public financial management reform; 15 of them will be trained specifically to join the VAT audit team.
“Internal audits in the Ministry of Finance will not be hidden or buried, or sit on a shelf collecting dust,” he said. “This is an important area that we as a government must take a leadership role. If we set the standard it will filter down into the wider society in terms of the kind of discipline and ethical conduct we want throughout our country.”
At the beginning of the month, Prime Minister Dr Hubert Minnis officially opened the Prime Minister’s Delivery Unit (PMDU) for Public Financial Management and Performance Monitoring Reform inline with the overall initiative to better manage public finances.
The project is as a result of an IDB Public Financial Management and Performance Monitoring Reform (PFM/PMR) loan to The Bahamas, which is to increase the government’s capacity to monitor and implement key projects through performance management.
Viana Gardiner is the chief operating officer of the unit and will have a staff of around 12.
In good news for financial services providers in the region, on May 25, the Council removed The Bahamas and Saint Kitts and Nevis from the EU’s list of non-cooperative tax jurisdictions.
The EU’s list is contributing to on-going efforts to prevent tax fraud and promote good governance worldwide. It was established in December 2017.
“Having fewer jurisdictions on the list is a measure of the success of the listing process,” said Vladislav Goranov, Minister for Finance of Bulgaria, which currently holds the Council presidency. “As jurisdictions around the world work to reform their tax policies, our challenge for the rest of the year will be to see that their commitments have been correctly implemented.”
In a statement, The Council of the EU said The Bahamas and Saint Kitts and Nevis have made commitments at a high political level to remedy EU concerns. EU experts have assessed those commitments.
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