Dames: Tough decision on tax hike will pay off for Bahamians
While the vast majority of participants in a new Public Domain survey oppose the government’s decision to increase value-added tax (VAT) in The Bahamas, Minister of National Security Marvin Dames opined yesterday that the Bahamian people will come to understand the admittedly unpopular move.
Speaking to The Nassau Guardian, Dames expressed that he does not believe the move will result in a loss of political capital.
“We have made our case,” he said. “I think one of the things is, you know, it’s a tough decision, right,” he said.
“But, you don’t want to, three years down the road, say ‘wow, we should have done it, you know’. The facts are all there. We are where we are. What are the other options? I think the public will come to understand.”
Dames said successive governments have functioned on a similar fiscal model of borrowing to operate, but “sooner or later that bubble has to burst”.
He said instead of borrowing more and more, this government has made the tough decision.
“Sometimes people elect governments to make decisions and sometimes decisions have to be made that are very tough, very difficult,” Dames said.
“I think what is even more frightening is to lose control of our fiscal affairs. To me, that is more frightening than anything.
“I thought that the deputy prime minister made a real good case.
“As I said during my contribution, I had some concerns going in, and after we would have delved into it as a Cabinet, and as a government, we felt that this was the most responsible decision to make.
“Oftentimes we have to make responsible decisions for our people.
“Sometimes, it’s unpopular, but you have to make it because I hate to think that – and we have never been there – we end up in the same situation as is Barbados, as they are enduring right now, because it [would] be painful, extremely painful.”
The new Public Domain survey showed that 73 percent of respondents who participated oppose an increase in VAT from 7.5 percent to 12 percent and 86 percent believe the government should have engaged in public consultation prior to proposing the new budget.
Meanwhile, 76 percent of those surveyed oppose the budget, and a further 62 percent said the budget is designed to benefit special interests within the Free National Movement.
Public Domain conducted a telephone survey between June 2 and June 6, 2018.
Eight hundred respondents throughout The Bahamas were interviewed.
The budget was brought to Parliament on May 30.
Yesterday, Minister of Health Dr. Duane Sands; Minister of Finance Peter Turnquest; Minister of State for Legal Affairs Elsworth Johnson and Minister of Tourism Dionisio D’Aguilar declined to comment on the results of the poll.
However, D’Aguilar said he will address aspects of the poll during his contribution to the budget debate, which he expects to make tomorrow.
Pineridge MP Frederick McAlpine and Centreville MP Reece Chipman, both FNM backbenchers, objected to the VAT hike during the budget debate last week.
McAlpine said the increase is “void of transparency and compassion and highly disrespectful to Bahamians”.
Meanwhile, Chipman argued the increase will result in additional hardship for Bahamians.
The government’s decision, announced by Turnquest during his budget communication, has received widespread rejection and backlash from various quarters of society.
The Bahamas Chamber of Commerce and Employers’ Confederation nor the Bahamas Christian Council support the increase.