The Progressive Liberal Party (PLP) will not support any new taxes that the Minnis administration proposes until there is better efficiency in collecting existing taxes, Shadow Minister of Finance Chester Cooper said yesterday.
Cooper’s comments follow a recent International Monetary Fund (IMF) statement, which recommended that The Bahamas review its taxation system and create one that is more equitable.
The IMF also recommended that the government reduce expenditure and increase investment in statistics to inform policy decisions.
“What is clear from the latest International Monetary Fund staff concluding statement of the 2019 Article IV Mission and the government’s response to it is that nothing delights the minister of finance more than making the IMF and credit ratings agencies happy,” Cooper said in a statement.
“The reality on the ground for most Bahamians is harshly different than the rosy picture the government would wish to paint.
“The Minnis administration released a statement yesterday basking in the glow of praise from the IMF while indicators in the country where we actually live are dismal.”
On Monday, Finance Minister Peter Turnquest praised the report and noted that it demonstrated that the government is moving The Bahamas “on the right track”.
But Cooper disagreed.
“Though there will be economic growth in this fiscal year, what has been achieved has been through growth in tourism driven in large measure by Baha Mar, a key plank in the former government’s policy achievements, and a roaring U.S. economy that may be poised for a slowdown,” Cooper said.
“That the government seeks to pat itself on the back for something it had little to do with is amazing, though not surprising given the Minnis administration’s lack of accomplishments thus far.
“The fact is that unemployment is up and the healthcare plan is in shambles. We don’t have enough ambulances to service our population. We don’t appear to have the wherewithal to fix a traffic light. The roads are sparingly paved as potholes abound. Ragged Island is still in disrepair, her people desperate for relief. People cannot keep the lights on. People are living in cars and the government cannot keep a constant supply of electricity.
“All the while the government is starving capital expenditure in a vain attempt to meet a deficit target.”
Cooper noted that the government’s narrow focus on achieving its deficit target at any cost is “concerning”.
He said the Minnis administration must focus on the collection of existing taxes to increase revenue, instead of additional expenditure cuts in light of “continued human suffering and crumbling infrastructure”.
The government implemented VAT at 7.5 percent in January 2014.
Last year, in a move that was met with significant public criticism, the Minnis administration increased the rate to 12 percent.
But Cooper pointed out yesterday that despite the 60 percent increase, revenue at the mid-year point underperformed.
“The government hopefully now sees that it botched the VAT increase implementation with ineffective, politically-motivated exemptions,” he added.
“We said before there were more effective ways to help low income households via social services. Yet, the suffering continues.
“Hopefully, now that the IMF says the government must focus on economic growth, the Minnis administration will do that, notwithstanding the fact that we in the PLP have been saying exactly that for the past two years.
“But be warned, the PLP will support no new taxes in the upcoming budget exercise, or in future, until there is renewed efficiency in collecting the existing taxes.”