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THURSDAY, JUNE 1, 2023
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Deficit’s 75% cut hinges on $400m revenue surge By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
• Gov’t ‘very confident’: Income 7% above forecast THE Ministry of Finance’s top official yesterday asserted he is “very confident” the • Opposition: Projections Government will increase revenues by $400m year-over‘hugely, hugely optimistic’ year, and slash its fiscal deficit by 75 percent, in the absence of new and/or increased taxes. • No new/increased taxes, Simon Wilson, the financial but plenty subtle tweaks secretary, told Tribune Business his optimism surrounding the 2023-2024 fiscal projections comes from current trends with revenues presently surpassing projections and prior year performance by 7 percent and 10 percent, respectively. And, while no headline-grabbing tax measures were announced, legislative changes accompanying the Budget revealed fee adjustments and other tweaks (see articles on Page 1B). The Davis administration, unveiling its 2023-2024 Budget in the
House of Assembly, largely stayed true to previous forecasts by projecting that it will cut the GFS deficit by some $389.5m compared to the outturn for the current fiscal year which still has a full month to run. The numbers show this will be achieved by holding the Government’s recurrent (fixed cost) and capital spending in line with 2022-2023 levels, with a $400m yearover-year revenue increase to $3.316bn driving the
SIMON WILSON
deficit - which measures by how much its spending exceeds income - down to $131.1m for the upcoming fiscal year. The latter figure, which strips out debt principal redemption to capture the Government’s net new debt or borrowing, is less than $6m more than the $125.3m deficit projected for 2023-2024 in last year’s Budget. The Davis administration is basing its
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Gov’t near-tripling cruise departure tax to $145m By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government is aiming to near-triple revenues earned from departing cruise passengers to $145m in the 2023-2024 Budget via a series of new and increased fees, it was revealed yesterday. Revenue estimates for the upcoming fiscal year revealed the Davis administration
is seeking to increase “sea departure taxes” from $50.642m in the current fiscal year via a combination of increases to the existing $18 per passenger departure tax and two new levies. The Passenger Tax Amendment Bill 2023, tabled in the House of Assembly yesterday to accompany the Budget, reveals that the existing $18 tax is being increased to $23 for “every cruise passenger”
leaving The Bahamas via Nassau and Freeport, and to $25 per head for all those who exit “by sea from a private island not visiting any other port in The Bahamas”. The revised tax structure, while designed to incentivise the cruise lines to call on Nassau and Freeport, and thus better spread the wealth through their passengers spending with more Bahamian companies and their
VAT filing cut for $5m companies By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Ministry of Finance’s top official yesterday voiced optimism it will “not be a big problem” for Bahamian companies with annual turnovers exceeding $5m to file and pay their VAT returns within 14 days. Simon Wilson, the financial secretary, speaking after legislation was tabled in the House of Assembly to reduce the filing time available to major firms by one-third, told Tribune Business the move was linked to the Davis administration’s plans to set-up a Large Taxpayer Unit. The VAT Amendment Bill 2023, which defines
a “large taxpayer” as an entity with annual turnover of $5m or more, stipulates: “A registrant that is a large taxpayer must file with the Comptroller a VAT return in the prescribed form within 14 days after the end of each tax period whether or not tax is payable by the registrant in respect of the period.” The VAT sum due must also be paid within the same 14-day period, and large taxpayers will be prevented from gaining an extension to the filing timeline is this is passed into law. And the VAT comptroller also has the ability to identify companies as “large taxpayers” in the VAT rules.
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Bahamas is exploring ‘debt for nature’ swap By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government is exploring a “debt-for-nature swap” with the Inter-American Development Bank (IDB) that could result in at portion of its $11.2bn national debt being forgiven, the Prime Minister said yesterday. Philip Davis KC, unveiling the 2023-2024 Budget in the House of Assembly, said the move was part of wider discussions with the multilateral lender on “two policy-based guarantees” designed to give The
Bahamas access to financing at lower-cost interest rates. “The Government is presently seeking IDB Board approval for two policy-based guarantee instruments, which will allow access to market financing at even more favourable rates,” Mr Davis said. “These guarantees will support the Government’s debt management operations during the upcoming 2023-2024 fiscal year, which also contemplates a debtfor-nature swap. “A debt-for-nature swap is an arrangement whereby
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employees, imposes departure tax increases of $5 and $7, respectively. They are equivalent to a 27.8 percent and 38.9 percent rise. In addition, the Bill will also introduce a “tourism environmental levy for every cruise ship passenger arriving or leaving The Bahamas” worth $5 per head. And, finally, for good measure, The Bahamas
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‘Throwing darts’: PM pledges ‘decisive action’ on Freeport • Places Haywards and St Georges on notice • Warns that Hawksbill Creek ‘doesn’t work’ • And Port ‘must change’ with reaction mixed By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister’s decision to put the Grand Bahama Port Authority’s (GBPA) owners on notice that he plans to take “decisive action” to halt Freeport’s two-decade decline PHILIP DAVIS KC yesterday provoked mixed reactions from residents and politicians. Philip Davis KC used the platform provided by the 2023-2024 Budget address to assert that Freeport’s founding treaty, the Hawksbill Creek Agreement, “does not work” and that the GBPA’s governance model “must change” if the city is to “realise the promise, growth and prosperity” it aspires to. While not setting out specific details on the “decisive action” his government plans to take, the Prime Minister suggested these could be revealed during the Budget debate over the next month. His comments drew a mixed response, with one Freeport entrepreneur suggesting he and the Government should “stop throwing darts” at the GBPA and instead meet with its owners and management to map out the city’s revival. Michael Pintard, the Free National Movement (FNM) leader, and who as Marco City’s MP is one of three Opposition parliamentarians on Grand Bahama, yesterday told Tribune
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