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Bowe: Proper analysis of the revenue target shortfall needed

A deeper explanation is needed from the government on why it won’t hit its revenue target for the 2018/2019 fiscal year, Chairman of the Clearing Banks Association (CBA) Gowon Bowe asserted.

Since the government has only collected 63.7 percent of its $2.6 billion revenue projection for this fiscal year up to the end of the third quarter, Bowe questioned how the numbers are going to play out in “the bright economic future” the government has been speaking about.

He said it’s the singular thing that’s been missing from the past few weeks of the budget debate in the House of Assembly.

“We still have not really done a significant debrief over last year’s outturn, what we are projecting will be the actual performance with the revenue shortfall. We’ve heard that will be offset by some expenditure gains in terms of reduction in expenditure. But we really should be analyzing that because if you don’t know your history you’re bound to repeat it,” Bowe said in an interview with Guardian Business.

“Every year we come to budget and we talk about the next year’s budget and we never talk really about what happened relative to the previous budget. Businesses and households don’t operate that way. If you find that you haven’t achieved your budget, you usually sit down and say what you need to change moving forward. Now that may be done internally but it should all be done externally for the people who you’ve set the budget for.”

The economy grew by 1.6 percent in 2018, lower than the 2.5 percent projected by the International Monetary Fund (IMF), which has projected further growth of 2.25 percent for 2019.

Bowe said it is more likely The Bahamas will again miss that target.

“We have economic growth that is being projected and there are some mixed messages in the sense that we are saying we will have positive growth but the revenue collections are flat with what they have budgeted for this past fiscal year that they have not achieved,” he said.

“What that suggests is the GDP (gross domestic product) growth is either somewhat tenuous because there are so many global factors taking place, trade wars between China and the U.S., civil unrest in the Middle East in terms of potential threats of war and issues taking place in that regard, so from a numbers perspective it’s probably fairly prudent and conservative to say that we expect the economy to roughly remain flat and our underperformance last year would be made up where we didn’t collect what we thought we would have. But persons are interested in understanding what the numbers mean.”

Although the government may miss its revenue target, collections are up 15 percent due largely to the increase in value-added tax (VAT) at the beginning of the fiscal year.

Paige McCartney

Business Reporter at The Nassau Guardian
Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas.
Paige started working as a business reporter in August 2016.
Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News
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