Observations on taxes
I note with great concern Attorney General Carl Bethel’s hostility toward the Bahamian web shop gaming industry and his diabolical plot to tax the Bahamian, but not the foreign-owned, sector of the industry to death. During the 2017-2018 budget fiscal year it was disclosed that the government collected some $37 million in revenue from the web shops and casinos. In the interests of transparency, will the government reveal the breakdown figures of the taxes that were collected from our local web shops, and the amount of revenue that was paid into our public treasury by those foreign-owned casinos? According to my sources, the local web shops paid some $ 33 million in gaming taxes and fees. In contrast, the foreign-owned casinos can obtain VAT refunds and tax concessions. The local web shops are not entitled to either.
I wish to highlight the principle of diminished returns, which states that the more highly a person, business or product is taxed, the less revenue the tax collector obtains; I use as an example the state of California and its recent legalization of recreational marijuana. Notwithstanding its legalization of recreational marijuana, the black market of marijuana sales is estimated to have grown by 10 percent on an $ 11 billion industry. This growth in the black market is widely believed to be the result of the state over-taxing the legal industry.
Moreover, under the rules of the World Trade Organization, it is unlawful to have different rates of taxation between local and foreign companies on the grounds of discrimination.
— Kevin Mckenzie