business@tribunemedia.net
THURSDAY, JUNE 5, 2025
$5.39 $4.75 Opposition MP hits ‘desperation’ over $100m VAT evasion t A4RVFF[F NBZ AESZ VQ XFMM GSPN SFBM FTUBUF t 1. EBZ SFBMUPS SFQPSUJOH OPX PO BMM TBMFT t 3FBMUPST TBZ ATRVFF[F PO UIFN JT APWFSSFBDI By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN Opposition MP yesterday asserted the Government is enacting “desperation” measures to crack down on tax avoidance said to be costing it $100m annually, warning: “One day the well will run dry.” ADRIAN WHITE Adrian White, the St Anne’s MP, and a real estate and commercial attorney by profession, told Tribune Business that the enhanced compliance and enforcement measures confirmed by the Prime Minister during his Budget opening address threaten to “squeeze” a sector that generates significant tax revenues for the Government - especially since the economy emerged from its post-COVID lockdown. He hit out after Philip Davis KC also revealed that planned VAT Act reforms, which require Bahamian realtors to inform the tax authorities of all newly-constructed property sales, and those involving land set to be employed for such new builds, within 30 days of closing or be exposed to sanctions equal to 3 percent of the transaction’s value, will now be extended to all real estate deals. This is designed to ensure all Bahamasbased land, property and real estate sales are swiftly reported to the Department of Inland Revenue in the Government’s latest bid to crack down on what it alleges to be significant avoidance, and evasion, of VAT payable on such transactions. Mr Davis admitted that previous efforts to close loopholes, and bolster compliance, produced “disappointing” results. “In previous Budget communications and statements to this House, I have spoken about the under-performance on VAT on real estate. I have also introduced a variety of measures to address this under performance, including an
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Union chief ‘blindsided’ by civil service wage increase t #146 QSFTJEFOU A-VEJDSPVT OP ATFBU BU UBCMF THE Bahamas Public Services Union (BPSU) presi- t .BOBHFSJBM SJTF UIJT dent yesterday said he was NPOUI GPS PUIFST “blindsided” by the Prime Minister’s pledge of imminent civil service pay rises and a t (PW U XBHF CJMM UP SJTF $112m jump in the Government’s wage bill. N UP N CZ A By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Kimsley Ferguson told Tribune Business that he and other union executives were last week informed they would be unable to see the public service salary review, which Prime Minister Philip Davis KC yesterday said justifies between 2 percent to 8 percent salary increases for non-managerial civil servants, before it was approved by Cabinet. While “excited” about higher incomes for all civil servants, he argued it is “ludicrous” for the union to be denied “a seat at the table” over the salary review
because it will be unable to identify - and advocate for the correction of - any shortcomings that may negatively impact its members as the Government will have already made decisions. And Mr Ferguson told this newspaper he was unaware that 2025-2026 Budget data is forecasting a 13.9 percent, or more than $112m increase, in the size of the civil service wage bill over the next three fiscal cycles. Total wages and salaries are projected to be $807.459m in
the upcoming 2025-2026 fiscal year, which begins on July 1, before further increasing to $881.692m in 2026-2027 and then reaching $919.734m in 20272-2028. The BPSU chief said a key driver behind the projected increases is likely to be “allocations” for salary increases given that a number of public sector union deals expire at end-June 2025. The data, though, signals that The Bahamas’ size of government is set to further
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PHILIP DAVIS KC
KIMSLEY FERGUSON
PM: Rating goal ‘ambitious’, may be longer than 3 years By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister yesterday conceded his threeyear timeline for restoring The Bahamas to ‘investment grade’ status is “ambitious” but asserted that achieving this is more important than how long it takes. Philip Davis KC, leading off the 2025-2026 Budget debate in the House of Assembly, subtly signalled that escaping ‘junk’ status’ may take longer
than the 2028-2029 fiscal year target he set last week but pledged that the Government “will not flinch” from the four key indicators it is focusing on to attain it. Responding to suggestions that a “massive debt reduction” will be required for The Bahamas to move upwards through the four ratings separating it from a return to ‘investment grade’ status with Moody’s and Standard & Poor’s (S&P), he said: “I’ve taken note of commentary suggesting that this objective
may not be achievable within the three-year timeframe I proposed, or even at all. “Yes, the targets are ambitious, but ambition is necessary if great things are to be achieved. Four years ago there were many who scoffed at the idea that we could achieve a balanced Budget. And yet here we are. These are our goals and we have set out our road map as to how we will achieve them. “Yes, it will require strong, continued fiscal discipline and wise stewardship of the
economy, but we do not flinch from either responsibility. This administration believes in setting high standards and working relentlessly to meet them. Whether we reach investment grade in three years or slightly beyond, the important thing is that we are moving decisively in the right direction, with discipline and with purpose.” Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune
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PM accused of ‘deflection’ over $120m Grand Lucayan proceeds By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Opposition’s finance spokesman yesterday accused the Prime Minister of “deflection” after he failed to answer how much of the $120m Grand Lucayan sales proceeds have been paid to the Government. Kwasi Thompson, the east Grand Bahama MP, told Tribune Business that Philip Davis KC “didn’t answer the question” he posed during the 2025-2026 Budget debate over how much of the purchase price for the resort has yet to be received from the Miamiheadquartered purchaser, Concord Wilshire.
KWASI THOMPSON The former minister of state intervened on a ‘point of order’ after Mr Davis, in leading off the Budget debate in the House of Assembly, confirmed that legal fees and other transaction closing costs will be
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PM: $1m VAT crackdown to stop Treasury losing out By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister yesterday asserted that cracking down on VAT deductions for construction projects worth over $1m will ensure the Public Treasury no longer loses out to “private interests”. Philip Davis KC, leading off the 2025-2026 Budget debate in the House of Assembly, asserted that private companies and homeowners not involved in real estate development or sales have “disproportionately” benefited at the expense of Bahamian taxpayers by being able to recover the 10 percent tax
paid on building materials, equipment and other construction supplies. “With respect to another amendment to the VAT Act, a taxable person or entity will no longer be permitted to claim ‘input’ tax deductions for goods and services used in major construction projects, or building docks, reclaiming land or undertaking developments valued at over $1m unless they are in the business of supplying real property as part of their regular operations,” he explained. “In other words, if a real estate developer is building homes or commercial
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