Prime Minister Philip Davis announced broad tax reform measures yesterday as he delivered the 2022/2023 budget communication, which he said would ensure the country’s tax system is fair and equitable.
The prime minister announced that financial service providers and commercial banks would now have to pay business license fees, among other new fees intended to help bolster revenue and streamline collections.
“To ensure equity with insurance companies we are eliminating the premium tax, and are now requiring insurance companies to pay business license fees,” he said in the House of Assembly.
“We are increasing royalty fees for the export of seafood, and we are also formally prohibiting the export of conch in commercial quantities, in order to encourage sustainable fishing of this precious resource. We are also implementing a service fee for those individuals who want to obtain their passport within three hours.
“Our emphasis is to ensure that the tax system is fair and equitable, and that no single taxpayer has an advantage. In that regard, we have standardized the excise duty for the production of beer. It is actions like these which demonstrate our willingness to make the decisions which benefit the many and not the few.”
Additionally, the prime minister said, “We are clarifying the law on foreign yacht charters to ensure that operators of foreign yacht charters register and pay VAT. Operators will, therefore, now, be subject to the stringent policies of the VAT Act.”
Davis said his administration will still hold fast to its commitment to provide $50 million to small business development through various institutions, including the Bahamas Development Bank, the Bahamas Agricultural and Industrial Corporation, the Bahamas Entrepreneurial Venture Fund and the Small Business Development Centre, utilizing resources that have yet to be tapped into.
“We believe that these institutions will be leading this effort, especially the Small Business Development Centre, which has unused loan resources, and the Bahamas Development Bank, which is in discussions with the Caribbean Development Bank to receive substantial funding. As part of an overall effort to increase access to capital for small businesses, in this fiscal year we also propose to study the operations of our capital markets. We recognize that $50 million per annum basis is just a portion of the required funding that small businesses need to grow in this economy,” the prime minister said.
“With commercial bank lending focused primarily on the consumer market, we have to create other avenues for small business financing. In partnership with The Central Bank of The Bahamas, we also propose to increase efforts to increase the circulation and use of the Sand Dollar. We believe it is a great tool, which will help to reduce the transaction costs many small businesses face when handling cash. The Sand Dollar makes digital financial services available to micro, small and medium-sized businesses, that will also make transactions for those businesses faster and more secure.”