While the government has begun its social policy move of reducing customs duties on some of the most imported items into The Bahamas, in order to bring relief to Bahamians of lesser means, the move to reduce tariffs is also in line with the country’s accession efforts to the World Trade Organization (WTO), Acting Financial Secretary Marlon Johnson said during the Ministry of Finance’s budget press conference, held at the British Colonial Hilton hotel.
Johnson explained that the government has vowed to bring down customs duties by $100 million over a three-year period, and while this is in line with the requirements of WTO accession, Johnson said it is being done more so to bring relief to poor communities by bringing down the price of goods.
“In the government’s WTO offer you would have seen that the government intends to bring down the tariffs and customs duties by an average of 15 percent, which turns out is about $50 million in foregone revenue,” Johnson said.
“More than that, the government would have committed over three years to bring down the customs duties by $100 million, which is double the number projected for the WTO. So yes, the short answer and overarching picture looks at the context of WTO accession, but the more ambitious target is what the government would have committed to in its policy documents of changing the balance between duties and value-added tax and other taxes.
“Driving that is, the more expensive goods and commodities are in the economy, the more potential drag that will have, particularly on persons of lesser means. So the government strategy is to try to rebalance that share of taxes between services and goods.”
Johnson said as an “operating policy” the government’s plan is to continue to break down duties to make goods more affordable for the poorest communities.
Johnson said the government is moving in line with what the country’s WTO offer is, though The Bahamas’ offer is still being negotiated.
However, he pointed out that the government would have made the same amount of reductions for economic reasons, whether or not the country was moving towards WTO accession.
Education: Florida International University, BS in Journalism