business@tribunemedia.net
THURSDAY, FEBRUARY 2, 2023
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‘No new tax measures’ for $4bn revenue goal By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s top finance official yesterday reiterated his optimism that “no new tax measures” will be required to grow its revenues by some 43 percent to over $4bn during the next four years. Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business that closing the “VAT gap” and stricter compliance and enforcement are among the initiatives that will enable the Davis administration to expand the Public Treasury’s income by almost $1.2bn between now and the 2026-2027 fiscal year. Speaking after the Government tabled its 2022 Fiscal Strategy Report in the House of Assembly, he also revealed
• Growth, ‘VAT gap’ close to drive $1.2bn jump • Bahamas forecast to grow economy to $16bn • GDP rise to finance bigger Gov’t, surpluses plans to modernise the Department of Inland Revenue (DIR) via a joint review by the KPMG accounting firm and LTI. Mr Wilson, describing the latter as “a big Indian conglomerate”,
said the outcome was intended to transform the Government’s main revenue collection agency into a top-level tax administrator. However, fiscal observers yesterday again voiced scepticism that the Government will hit its $4bn revenue goal - also representing its 25 percent revenue-to-GDP ratio target - without the imposition of any new and/or increased taxes. They argued that relying solely on economic growth to generate increased tax and fee income was unlikely to be enough to meet the Government’s objectives. Hubert Edwards, the Organisation for Responsible Governance’s (ORG) economic development committee head, told this newspaper: “Having moves from around $2.4bn in revenues to
BPL’s hedge mishandling to cost Bahamians $150m By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Government is hoping to release a public consultation paper on possible corporate income tax reforms before the 2023 first quarter’s end, it was revealed yesterday. Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business that the Davis administration was “very close” to releasing a so-called ‘green paper’ on The Bahamas’ options to comply with the global push for a minimum 15 percent corporate tax rate. The Deloitte & Touch accounting firm was hired by the Government to examine the implications for the Bahamian economy and its financial services sector
BAHAMIANS have been burdened with a $150m bill due to the mishandling of Bahamas Power & Light’s (BPL) fuel hedging strategy, it was revealed yesterday. The full cost, branded “a significant unbudgeted liability” for the Government, was revealed in the just-released Fiscal Strategy Report, which said BPL’s arrears must be paid off to prevent electricity supplies being interrupted. “The recent disclosure of approximately $150m of payment arrears of Bahamas Power & Light (BPL) represents a significant unbudgeted liability of the Government,” the report said. “To ensure continued provision of essential electrical services to the public, the Government has committed to ensuring payment of this liability by the corporation.” This means the unpaid bills will have to be picked up by Bahamian households and businesses, either as taxpayers or BPL consumers. The report’s revelation is the first time that the full cost of the decision not to execute the trades underpinning BPL’s fuel hedging initiative, and not adjusting the energy monopoly’s fuel charge sooner, has been publicly disclosed. To-date, only the $90m unpaid fuel bill owed to Shell, BPL’s supplier, has been disclosed. The Fiscal Strategy Report thus indicates that a further $50m-$60m of costs and payment arrears has been incurred, some of which may relate to loans advanced to BPL by the Government to enable it to hold its fuel charge at 10.5 cents per kilowatt hour (KWh) until October 2022. BPL’s customers are now paying-off these arrears via fuel charge hikes that will peak at a 163 percent increase over last October’s bill between June and August this year, when consumption is at its peak due to the summer months. Much of the burden will fall on consumers using over 800 KWh per month, meaning that
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SIMON WILSON $2.8bn, to now make that jump to $4bn suggests there is significant underlying tax treatment going to be applied.” The Fiscal Strategy Report shows the Davis administration is betting that growing The
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Gov’t revenues beat early goal by $50.6m Corporate income tax By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s top finance official yesterday said “close to $50m” in real property tax arrears has been collected during the 20222023 fiscal year’s first seven months as it seeks to crack down on tax and bill duckers Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business the Davis administration is encountering “more positives than negatives” in its push to resolve the country’s fiscal crisis by eliminating persistent annual fiscal deficits and restoring national debt sustainability. “I’ll give you one number: Real property tax arrears,” he said. “For
this fiscal period we have collected close to $50m to-date. That tells you some of the success we have seen. We have got to work and focus on doing more. There are more positives than negatives. We are still seeing some negatives, but there are more positives.” Mr Wilson spoke to this newspaper after the Government yesterday unveiled its Fiscal Strategy Report 2022 in the House of Assembly, which disclosed that total revenue collections for the first four months of the current fiscal year had beaten targets by $50.6m. “As a result of improved economic conditions, coupled with revenue policy and revenue administration strategies articulated during
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paper before Q1 end By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net