Prime Minister Philip Brave Davis indicated yesterday that the Value-Added Tax (VAT) Amendment Bill will likely be up first on his administration’s legislative agenda, and added that the government will also have to “recast” the 2021/2022 budget because the previous administration presented and had passed an unrealistic spending plan.
The government pledged in the Speech from the Throne last week to amend the VAT Act to lower the rate of VAT across the board from 12 percent to 10 percent.
The Progressive Liberal Party (PLP) previously pledged that this reduction will be for a period of 12 months, following which a review of that decision will take place.
Asked yesterday what will be up first on the legislative agenda, Davis said, “We haven’t decided. It’s a Cabinet decision. We know that we have to meet certain commitments. It may not necessarily require legislative intervention. For example, the VAT reduction requires that, so that will be one of the first items we put on the agenda.
“We are now looking at recasting the budget because what we are finding is that the budget was not truly a reflection of what the state of affairs were but rather just a wish list to get over an election.
“So, we hope to revisit the budget and perhaps that may be the second most important thing we do is to recast the budget for the next nine months to meet and to enable us to carry out our functions.”
Twin crises hit The Bahamas six months apart — Hurricane Dorian in September 2019 and the COVID-19 pandemic in March 2020.
Dorian, which caused $3.4 billion in damage, severely damaged Abaco and Grand Bahama, which are the second and third largest economies in the country.
The ongoing pandemic resulted in a months-long closure of The Bahamas’ tourism industry and other commercial sectors.
At the end of the 2020/2021 fiscal year, the fiscal deficit stood at $1.3 billion, up from $811.7 million in the previous year.
The national debt climbed to $10.3 billion.
Gross borrowing was at $3 billion for the fiscal year.
The economic situation, which Davis last week described as “dismal”, has led some to question if the PLP will be able to keep some of its campaign promises like reducing VAT and increasing the minimum wage.
When asked about this yesterday, the prime minister replied, “We have not arrived at a decision yet. I do not intend to put off any of my commitments. I intend to see how we can work with what we have to get our commitments fulfilled.”