Turnquest: Govt close on fulfilling VAT promises
The removal of value-added tax (VAT) from healthcare, water and electricity bills, as well as children’s and babies’ clothes could be on the horizon for Bahamians, though it remains unclear whether those campaign commitments of the Minnis administration will be introduced in the upcoming budget.
The pledge was shelved after the FNM came to office and claimed it met the cupboards “bare”.
The government announced this month that it would remove the tax, introduced in January 2015, from breadbasket items in the next budget, however, there was no mention of removing VAT from other promised areas.
In an interview with The Nassau Guardian, Deputy Prime Minister and Minister of Finance Peter Turnquest said the government has been working to achieve these campaign pledges, but noted that the loss of revenue from the tax would have to be supplemented somehow – a formula that has yet to be revealed in the case of breadbasket items.
When asked whether the removal of VAT will occur in the upcoming fiscal year, Turnquest said, “Wait for the budget.”
Pressed on the matter, the minister repeated that the Bahamian people should wait for the government to present its new budget.
Asked how close the government was to removing the tax on the areas in question, Turnquest responded, “Close.”
“This is always a balancing act between ensuring that we don’t have diminishment on the revenue, while at the same token giving those most vulnerable amongst us an opportunity to come up without having this onerous tax burden,” he said.
“We are looking for ways to be progressive in the way that we apply tax.
“That’s really what it boils down to.
“It has been said before, but we are doing some studies, modeling exercises, and even as we consider WTO and how that’s going to have an effect on our overall revenue.
“We won’t make any rash decisions, and we will evaluate and come to those conclusions as the data becomes available to us.”
The promise to remove VAT on breadbasket items came on the 2017 election campaign trail.
At a rally on April 7, last year, Prime Minister Dr. Hubert Minnis said, “It is unconscionable that the PLP put VAT on healthcare. When you, or your children, or your parents get sick, the last thing you need is VAT on your health bill.”
The government recently released its white paper on its Over-the-Hill Community Development Partnership Initiative, which will provide tax concessions for business people and property owners.