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Thursday, May 28, 2026
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Gov’t targets $470m revenue jump but cuts surplus forecast BY NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government is targeting a $470m revenue increase for the 2026-2027 fiscal period despite this year’s collection pace lagging 2024-2025, it was revealed yesterday, as it cut the forecast Budget surplus by 24 percent. Michael Halkitis, newly-appointed minister of finance, in his first-ever Budget presentation told the House of Assembly that the lower surplus projected for the upcoming fiscal year - now $223.1m, as opposed to the previously forecast $291.4m, representing a reduction of $68.3m - was justified by the Davis administration’s decision to “prioritise the needs of the Bahamian people” by investing in healthcare improvements.
Trimmed by 23% in upcoming fiscal year to ‘prioritise Bahamian people’s needs’
Gov’t eyes neartripling of corporate income tax revenues through larger base
NEWLY-appointed minister of finance, Michael Halkitis (centre), pictured giving his first-ever Budget presentation.
And bills Grand Bahama Port Authority for $99m to cover Freeport expenses Explaining that the downward revision was also made against the backdrop of the still-simmering Middle East conflict, which has rocked fuel and energy markets and sparked renewed global inflation and pricing pressures, the minister asserted that the reduced surplus and overall fiscal position “remains positive” as the $223.1m forecast - if achieved - will represent by how much the Government’s revenue income exceeds its spending.
TAX arrears owed to the Government under some of its most important revenue streams grew by $382m or 26.7 percent during the first nine months of the current fiscal year to hit $1.812bn at end-March 2026, Budget documents released yesterday revealed. The increase from $1.43bn at end-June 2025 was worsened by the inclusion of the $99.228m bill issued to the Grand Bahama Port Authority (GBPA), as the Government renewed its bid
But owner occupied property taxes down $38m to seek reimbursement from Freeport’s quasi-governmental authority for public services it has provided in the Port area, and recover costs that exceed tax revenues generated by the city. Stripping out that bill reduces the combined arrears increase for VAT, real property taxes and Business Licence fees to $283m for the first three-quarters of the present fiscal year. While the figures represent a one-time snapshot, and could have
been significantly reduced over the past two months, they make a case for the Davis administration’s continued focus on heightened enforcement, compliance and administration as opposed to introducing new and/or increased taxes. VAT arrears, representing past due and owing taxes, suffered the biggest increase in jumping by 33.6 percent in the nine months since the 20242025 fiscal year ended. They rose by more than $103m, increasing from $309.24m at end-June 2025 to $413m as at the close of March 2026. Not far behind was commercial real property tax
Taxpayer SOE subsidies surge by 19% to $655m BY NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net TAXPAYER subsidies to loss-making state-owned enterprises (SOEs) are set to increase by more than $103m to $655m during the upcoming 2026-2027 fiscal year, driven largely by expanded healthcare spending, with other efforts focused on boosting transparency and efficiency for public-private partnerships (PPPs). Documents released during yesterday’s unveiling of the 2026-2027 Budget reveal that total subventions
to the likes of Bahamasair, the Water & Sewerage Corporation, University of the Bahamas (UoB) and Straw Market Authority are forecast to increase by 18.8 percent from the $551.015m projected for the current fiscal year. The bulk of the increase, around $64m, comes from increased taxpayer and Public Treasury support for the Government’s drive to invest in healthcare infrastructure throughout The Bahamas and thus improve access to critical treatment for Bahamians. The Public
STRUCTURE - See Page B9
‘Cite the law’ used in $700m debt transfer BY NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Opposition’s leader yesterday urged the Government “to cite what law they are following” after it was revealed that $700m in net new borrowings, or debt, has been transferred to the National Investment Fund. Michael Pintard told Tribune Business that disclosures during the 2026-2027 Budget’s unveiling raised questions over whether the Davis administration is using the correct
legal mechanisms to effect such a move or if this was merely to keep new debt off the Government’s balance sheet so it did not blow the forecast $75.5m Budget surplus for the present fiscal year. He spoke out after Michael Halkitis, minister of finance, told the House of Assembly: “Our improvement is reflected in the increased borrowing and debt repayment activity during the year, driven mainly by our ongoing financing operations and
SWITCH - See Page B5
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Pension reform revival to cap $3bn unfunded Gov’t liabilties ‘White Paper’: Civil servants must pay towards their retirement Officials pay 3% of salary, with Gov’t contribution equal to 5% SOE liabilities near $400m amid fears of ‘barrier to progress’ BY NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
arrears, which were shown to have increased over the same nine-month period by 31.2 percent - from $341.331m at end-June 2025 to $447.899m at the end of March this year. Outstanding and past due real property taxes on foreign-owned vacant land also surged by a similar amount, increasing by 33.8 percent from $307.174m to $411.077m, thereby expanding by more than $103m. However, the data from other real property tax categories suggests the Government’s compliance efforts may be enjoying some
THE Government yesterday moved to revive long-awaited public sector pension reform in a bid to halt growth in unfunded liabilities that now stand at $3bn through the creation of a scheme where civil servants will help finance their own retirement. A so-called ‘white paper’ outlining the latest reform proposals, tabled in the House of Assembly by Michael Halkitis, minister of finance, after the 2026-2027 Budget’s unveiling calls for qualifying civil servants to contribute a mandatory 3 percent of their monthly salary to a new defined contribution scheme with the Government injecting a sum equal to 5 percent of their earnings. The move will ultimately phase-out the existing ‘pay as you go’ civil service pension where public officials pay nothing towards their retirement which, instead, is financed 100 percent by Bahamian taxpayers from the annual Budget. Pension payments to public officials were pegged at $154.434m for the current 2025-2026 fiscal year, with some $113.917 of this amount paid out during the first nine months, and this is forecast to steadily increase over the next three years to hit $166.75m by 2028-2029. And, with unfunded civil service pension liabilities forecast to increase by another $1.1bn over the next six years to hit $4.1bn by 2032, change is becoming ever-more critical to resolve what Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business in an April 5, 2024, interview is “the top risk” to the stability of the Government’s finances and need to be “dealt with as soon as possible”. “The continued growth in pension liabilities and cash outflows is fiscally unsustainable,” the Government’s ‘white paper’ asserts. “With annual cash outflows of $184m and accrued
ENFORCE - See Page B9
RETIRING - See Page B11
COLLECT - See Page B6
Key tax arrears jump 27% to reach $1.8bn BY NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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