While Bahamians pay less taxes as a percentage of the country’s gross domestic product than most countries in the region, there seems to be a disparity in the perceived value for tax money paid, outgoing President of the Bahamas Institute of Chartered Accountants (BICA) Gowon Bowe told Guardian Business yesterday, adding that the failed management of the nation’s electricity infrastructure has placed a huge burden on Bahamians in regards to taxation.
Bowe added that the cost of fuel and the government’s fuel bill drives the cost of everything higher.
He explained that the tax burden placed on Bahamians due to inefficiencies in state-owned enterprises, the lingering energy burden and the perceived value for taxes paid, have bred the perception that Bahamians are over-taxed.
However, Bowe said the distribution of the cost of living is “out of whack” given the country’s current system of consumption taxes. He added that businesses are also feeling the pinch due to the business license regime’s system of taxing revenue and not profit.
“Most businesses would happily move to a corporate tax system,” he said.
“Meaning you don’t pay if you don’t have profit. Right now I put up the risk capital and the government is taking a risk-free dividend.”
According to Bowe, while many businesses in the U.S. enjoy a tax rate of around 25 percent, Bahamian businesses pay 35 to 40 percent on revenue.
Bowe said The Bahamas’ real challenge moving forward will be the inequitable distribution of the cost of living, which he explained can be corrected through the implementation of a progressive tax and eventual doing away with the more regressive ones.
Bowe also said as government streamlines the public sector and uses the introduction of renewable energy to democratize power production, Bahamians could begin to see greater returns on their tax investment.
Education: Florida International University, BS in Journalism
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