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MONDAY, MAY 31, 2021
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Tax increases ‘have to come’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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CCOUNTANTS have warned new and/ or increased taxes “have to come” if The Bahamas is to slash its near$10bn debt, as they branded the Budget “no game changer” for the nation’s economic crisis. Craig A “Tony” Gomez, the Baker Tilly Gomez managing partner, told Tribune Business that while the government’s 2021-2022 fiscal plan “don’t set off any alarm bells” for Bahamian businesses and consumers it had merely postponed the inevitability of certain tax hikes in years to come to pay for the debt blowout sparked by COVID-19 and Hurricane Dorian. While the Minnis administration was correct not to endanger the post-COVID recovery by avoiding any across-the-board increase in VAT or other taxes, he added that it was alarming that the national debt is forecast to increase by almost $4bn in just five years. Warning that The Bahamas has “a history of falling short” with its revenue forecasts, resulting in greater-than-predicted
• Accountants warn: Budget ‘no game changer’ • Govt ‘history of falling short’ over revenue • Service must match public sector wage rise
CRAIG A “TONY” GOMEZ
KENDRICK CHRISTIE
deficits, Mr Gomez added that it was critical that taxpayers see value for every dollar spent by the government such as the planned $100m public health sector upgrades. And, with the total civil service wage bill forecast to increase by some $11.5m to $670.935m in the upcoming 2021-2022 fiscal year, he argued that it was vital Bahamians see something in return via an “improvement in service across every sphere of the government”. Mr Gomez was backed by Kendrick Christie, the Crowe Bahamas accountant and partner, who branded the government’s fiscal plans as “a transition budget” that did not go far enough in
containing spending. While backing many of the budget measures unveiled by the government, he asserted that there was “not enough to go the distance” when it came to generating sufficient gross domestic product (GDP) growth to pull The Bahamas out of its post-COVID slump. Describing the Budget as “straightforward”, as the Minnis administration sought to balance multiple competing priorities, Mr Gomez indicated that the decision to leave new and/ or existing major revenue sources well alone had only delayed the inevitability of increases for at least one more year. “I don’t think there’s
Business licence ‘not fit’ to realise digital ambitions By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A TECHNOLOGY entrepreneur has warned the business licence process is “not fit” for the government’s digitisation ambitions given a frustrating “five-plus months” trying to obtain approval. Brent Burrows II, in a widely circulated posting on Facebook, exposed the disconnect between the government’s technology and “ease of doing business” rhetoric and the reality faced by many budding entrepreneurs by describing the latter as “the exact opposite” of its ambitions.
Detailing his frustrations, which will likely be familiar to many in the private sector, Mr Burrows wrote: “How many brilliant ideas by young Bahamian entrepreneurs go unrealised due to government red tape and antiquated processes? “I don’t normally come on Facebook to vent, but I’m over it. I’m now going on five months-plus in my venture to form a company and obtain a business licence for a web-based business. Doing so with no connections and no grease.” Mr Burrows, the e-commerce head and brand strategist at CBS Bahamas
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Marinas chief raises clearance concerns
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Association of Bahamas Marinas (ABM) president is predicting the industry will have been “at 70 percent” of pre-COVID levels over the Memorial Day weekend as he urged government to ease vessel clearance. Peter Maury told Tribune Business that his marina and others were trying to “work through all the issues” relating to the processing of boat permit applications
and the payment of fees via Customs’ Click2Clear website, which he described as “far more complicated than necessary”. “Right now I have a couple of boats that are having trouble with paperwork and stuff,” he revealed. “It’s a long process. My thing is that someone from the government needs to go on there and clear a yacht with a family of five to six people and a couple of crew. Eight people.”
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a lot of alarm, and alarm bells, that immediately go off,” he told this newspaper. “I think for the most part people were looking for VAT increases and also possibly the introduction of personal income taxes. None of those items have appeared at this point in time. I think the government has done great in not increasing VAT. “But, from a financial perspective, we know the picture this budget paints indicates it’s not long in the near future, with the deficit running as high as $951.8m...... It has to come. There will be increased taxes or even a personal income tax.” Mr Gomez’s comments contrast sharply with those of Marlon Johnson, the Ministry of Finance’s acting financial secretary, who last week told a post-budget press conference that the “reflation” of the Bahamian economy post-COVID as tourism returned and more industries re-opened would “obviate” the need for new and/or increased taxes.
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GOWON BOWE
MARLON JOHNSON
‘Walk and chew gum’: Subsidies, debt cost $938m
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Bahamas “must walk and chew gum” on its fiscal and economic revival, a leading banker has warned, with $938.5m - one third of government spending - taken up by debt and subsidy costs. Gowon Bowe, Fidelity Bank (Bahamas) chief executive, compared the public finances to “a turnaround situation” with a private company, adding that the government needed to both invest to stimulate future growth while reducing its debt levels and associated interest costs at the same time. He spoke out after a deeper dive into the budget revealed that the $512.5m the government is due to pay in interest costs on its existing debt in the upcoming 2021-2022 fiscal year,
together with $426m in taxpayer subsidies to stateowned enterprises (SOEs), will account for one-third or $1 out of every $3 - of the $2.826bn spent on recurrent expenditure. Adding in the $742m forecast spending on civil service wages, salaries and allowances, and some $1.68bn or 59.5 percent of the government’s 2021-2022 budget will be accounted for by just three line items - wages, debt servicing costs and subsidies to struggling SOEs. Assessing the task facing The Bahamas, Mr Bowe told Tribune Business: “It’s about saying how do we make this the most dynamic Budget that helps us to get back to financial stability but also allows us to grow. “It’s like a turnaround situation with a company. You have to walk and chew gum
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