business@tribunemedia.net
MONDAY, JUNE 5, 2023
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Gov’t ready to guarantee Nassau’s $290m hospital By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
• Minister: ‘Real money set aside’ for facility THE Government is prepared to guarantee the $290m financing for New • Switch from PPP model Providence’s new hospital, a Cabinet minister as costs too high revealed yesterday, adding: “This is a worthwhile • Talks with Sir Franklyn investment for the Bahamian people.” on Perpall Tract site Dr Michael Darville, minister of health and wellness, told Tribune Business “there’s a lot of appetite” - and that the Davis administration has been “getting some good hits” - from potential financing sources after switching away from the previously-planned publicprivate partnership (PPP) model for the new hospital’s development. That would have involved a private sector group financing, constructing and operating/
managing the facility, but he explained that the Government had moved away from this approach because it felt the interest rates, or cost of financing, available under the PPP model was too high. Confirming that he is now moving to “finalise” the project’s financing, Dr Darville told this newspaper that while there is “money out there” it has to be at a price/cost that Bahamian taxpayers
can bear. To achieve that goal, he explained that the Davis administration felt the project is of such critical importance to the population’s health and well-being it is prepared to underwrite any borrowed financing with a government guarantee - even though this will add to the $11bn national debt. The new hospital’s total projected cost, $289.399m, is revealed for the first time in documents
DR MICHAEL DARVILLE accompanying the 20232024 Budget. Some $2m, and $8m, of that sum will be spent on “preparatory works” during the 20232024 and 2024-2025 fiscal years, respectively, with construction projected to ramp up in 2025-2026 with an $160m outlay. The minister said these figures, together with those for the Grand Bahama hospital, “demonstrate
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ONE out of every $5 spent by the Government on its recurrent costs during the upcoming 2023-2024 fiscal year will go towards paying the $612.726m interest bill on its outstanding $11bn-plus national debt. Documents accompanying the 2023-2024 Budget reveal that 19.99 percent of recurrent, or fixed cost, spending is earmarked to cover debt servicing costs which remain the largest single line item in the Davis administration’s
expenditure Budget for the 12 months to end-June 2014. And, with subsidies to loss-making state-owned enterprises (SOEs) consuming a further $408.098m, some $1.02bn of recurrent spending - equivalent to one-third of the total, or one out of every $3 spent by the Government - will go on this and interest payments alone. The Budget forecasts reveal that central government debt, in absolute terms, is not forecast to peak until the upcoming fiscal year when it is
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Property tax cap up 25% to hit $150,000 By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN realtors have given a mixed reaction to the Government’s decision to increase the annual real property tax cap by 25 percent to $150,000. The Davis administration, in amendments to the Real Property Tax Act tabled in the House of Assembly to accompany the 2023-2024 Budget, has moved to further increase the maximum amount that can be paid by one taxpayer after doubling this sum during the previous fiscal year. “Clause two of the Bill makes provision for the increase of the maximum
DAVID MORLEY tax on owner-occupied property from $120,000 to $150,000,” the Real Property Tax (Amendment) Bill 2023 stipulates. The $30,000 increase, which will take effect from July 1, 2023, comes swiftly behind the prior year’s $60,000 jump
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Key tax arrears jump $230m to hit $1.13bn • Gov’t to forego $318.449m in tax concessions By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
20% of Gov’ts fixed costs go to debt bill By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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TAX arrears owed to the Government from three key revenue streams increased by a collective $230m during the first nine months of the current fiscal year to hit $1.13bn at endMarch 2023. Documents accompanying the 2023-2024 Budget reveal that unpaid VAT, real property tax and Business Licence fees combined, together with associated fines, penalties and surcharges, rose by around 25 percent compared to the total $900.391m arrears at end-June 2022. While outstanding VAT remained relatively steady, the Department of Inland Revenue (DIR) figures showed a further surge in real property tax delinquency and non-payment. Commercial property tax delinquency was shown as rising by 45.9 percent during the nine months to end-March 2023, with
arrears jumping from $196.814m to $287.171m. Outstanding property taxes owed on foreignowned vacant land jumped by 26.4 percent over the same period, rising from $214.493m to $258.177m, while delinquencies for owner-occupied properties surged by 31.1 percent to $163.855m from $124.436m at the close of the 20212022 fiscal year. Property tax arrears on residential property that is not owneroccupied increased by 17.2 percent during the period, growing from $149.52m to $175.296m. Meanwhile outstanding Business Licence fee payments increased by almost $30m, or 53.3 percent, during the first nine months of the 2022-2023 fiscal year to $86.13m. This compared to $56.18m at end-June 2022. The data, provided by the Department of Inland Revenue, and based on world tax systems, is admittedly a one-time snapshot
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