Opposition leader Philip Brave Davis yesterday said that Deputy Prime Minister and Minister of Finance Peter Turnquest’s acknowledgment that the Minnis administration’s budgetary goals could shift as a result of an at least $8 million loss in gaming taxes is a sign of a much more serious problem concerning the government’s fiscal projections.
While speaking at the PLP’s headquarters on Farrington Road, Davis said the government has refused to accept responsibility for its new tax regime and the subsequent consequences.
“The Progressive Liberal Party (PLP) finds it both comical and silly that 16 months into office, the FNM still refuses responsibility for their failed tax policy,” Davis said.
“The Deputy Prime Minister and Minister of Finance Peter Turnquest blames the PLP for the government’s challenge in enforcing [its] new gaming tax regime.
“The unilateral imposition of this tax hike stands at the root of the government’s problem and it must now deal with the collateral legal challenges.
“Further, the tax hike was ill-advised and wrong for two principle reasons.”
The Nassau Guardian reported on Monday that the lawsuit by web shop owners could see the government lose at least $8 million in revenue as of result of what could be a prolonged delay in the implementation of the new sliding-scale tax on gaming house operators and a stamp tax on gaming patrons.
Until the matter is heard on October 5, the government stands to lose out on collections for July, August and September, at a cost of approximately $2.8 million per month.
While Turnquest said it is too early to tell what exact knock-on effect may occur, that number could balloon if the current suspension of the collection of those taxes is extended because of a continued impasse at the court level.
Davis said, “To forecast massive budgetary changes and adjustments in light of an $8 million gaming tax revenue shortfall suggests to me a deeper budgetary challenge than the government is letting on.
“The government must come clean to the Bahamian people on whether it will meet any of its revenue and expenditure targets as projected in the fiscal year.”
In an interview with The Tribune, Turnquest also said the challenges the government has encountered with the gaming sector and the taxes it has sought to impose on the industry stem from failures of the previous administration.
The minister said as a result of the Christie administration going against the January 2013 referendum, a handful of “favored” operators were provided licenses.
But Davis said the proposed new taxes were politically motivated with the intention of “crippling illegitimate, high regulated and Bahamian-owned industries”.
He added that the government has an interest in displacing the seven gaming operators in favor of their own supporters and friends.
“The policy was inherently discriminatory, in that while the government offered generous tax concessions to various other sectors and grouping such as the Grand Bahama industrial sector and the residents of Lyford Cay, it sought to first demonize, then crush the gaming sector,” Davis said.
“In the meantime, the empirical evidence and research findings that between $400 and $600 million within the tax system remain uncollected were ignored and set aside by this government.
“Why would this government, the FNM government, not want to collect delinquent taxes duly owed to the government? Do the wrong people owe these taxes in the eyes of the government?”
The government has said it will talk to gaming operators about the taxes before the court date.