PM Reveals New “Limited” Concessions For Bahamians
By Hadassah Hall
Until there is a recovery of recurrent revenues, the Bahamian people are faced with a limited scope of concessions in the 2004/2005 budget presented by Prime Minister Perry Christie on Wednesday.
These new concessions include adding bath soap to the breadbasket items and eliminating customs duties on ink and certain other materials required for computers as part of the ongoing programme to encourage computerization.
Mr. Christie also revealed that the government would remove customs duties and stamp duty on imports of building material for use by private schools so as to enable them to maintain standards.
Mr. Christie said he is also eliminating customs duties on all musical instruments so as to assist professional musicians and many bands formed by young people.
On the other hand, the government is expected to effect a more “stringent penal regime” to discourage and punish tax evaders in relation to stamp duty collection.
Mr. Christie said the Stamp Act would be extensively amended to reduce the losses resulting from the numerous schemes by tax cheats. He said it is currently the trend in commercial transactions and in the sale of land.
According to the prime minister, the amendments to be laid before parliament in short order are projected to realize an additional $10 million for the treasury.
Mr. Christie added that the government must continue to modernize the existing revenue system. He said this is why the major emphasis is on formulating and implementing measures to strengthen revenue administration.
In addition to strengthening the stamp duty collection system, a new Trade Information Management System is being installed in the Customs Department.
Using the latest information technology, Mr. Christie said, the system will enable customs authorities to identify and control areas where there is or potential for a serious risk of revenue leakage.
Mr. Christie emphasized how crucial it is that all taxpayers meet their obligations.
“It is incumbent on every responsible taxpayer to honour his or her tax obligations in a timely manner,” Mr. Christie urged.
Additionally, the prime minister said the government’s strategy to “deliberately avoid” increasing the burden of taxes on Bahamians is due to the country being on the threshold of achieving significant improvements in revenue collection and administration.
The prime minister is confident that the expanding economy will provide stability and growth to key sectors like tourism and financial services, therefore generating additional government revenues without the need to raise taxes.
Mr. Christie admitted that during the past two years since assuming office, the Progressive Liberal Party government observed with “great concern” the difficult revenue position that he said constrained the full implementation of its policies.
He pointed out that in the two previous budgets, despite the weakness of the revenue position, the government deliberately avoided increasing taxation.
“I believed that the proper course was to concentrate on strengthening revenue administration rather than on increasing the burden of taxation on Bahamians,” Mr. Christie said. “I am continuing with this patient strategy in this budget which contains no new revenue measures impacting directly on the Bahamian people.”
The prime minister said this also includes closing loopholes in the existing system that results in a substantial loss of revenue.
Mr. Christie added that the government at a later date proposes to review a wide range of fees and charges that in some cases have not been changed in decades.
In relation to revenue, Mr. Christie said the government expects a 5 percent increase in recurrent revenue over the 2003/2004 budget level. He said this represents an increase of $132 million or 14 percent over the 2003/2004 projected out turn that was less than the budget estimates.
He also said that the government is making a small number of adjustments to existing sources of revenue to provide $27.3 million. Mr. Christie disclosed that among them is the government’s intention to sell the Radisson Hotel for at a net profit of least $10 million.