The real property tax system suffers from a number of critical structural defects, and as result, annual revenues generated by the system fall significantly short of the amounts that should rightfully be collected, Prime Minister Perry Christie has said.

The Prime Minister made the remarks during the presentation of the 2012/2013 Budget Communication last week.

“It is estimated that with administrative improvements alone, annual property tax revenues could be increased by almost 100 per cent over the next five years,” he said.

“The government will pursue a comprehensive multi-year strategy and implementation plan to reform and modernize the real property tax system. An international expert has been engaged to help guide this process.”

The Prime Minister also noted that the proper control of tobacco imports and the collection of excise taxes due on such products as tobacco is another area that is fraught with leakage.

He said that as a means of instituting proper controls and securing excise revenues on tobacco products, the Ministry of Finance is in the process of finalizing preparations, with the assistance of the Canadian Bank Note Company, for the introduction of Excise Stamps on all tobacco products.

Prime Minister Christie explained that the stamps will attest to the payment of excise taxes, facilitate audit and compliance activities to combat smuggling and secure an important source of government revenue.

The Prime Minister also said that the government intends to initiate negotiations with the US in respect of the Bahamas Civil Aviation Flight Information Region (FIR).

Currently, the US Federal Aviation Administration (FAA) exercises air traffic control over Bahamian airspace, from the Miami Air Route Traffic Control Centre.

“Despite the air navigation charges imposed by the FAA, The Bahamas receives no funds from thousands of aircraft which transit our airspace,” Prime Minister Christie said.

“The government will engage in negotiations on the FIR as a means of enhancing revenues in this area,” he added.