Prime Minister Philip Davis yesterday hit back at former Prime Minister Dr. Hubert Minnis over his call for the government to raise taxes on the rich, assuring that his administration is taking a strategic approach to increase revenue and provide some relief for those most in need.
Davis suggested Minnis was being hypocritical in his criticism.
“He ought to follow his own advice,” the prime minister said.
“If you’ve noticed, when he came to office, the very first thing he did was to reduce the taxes on the rich. Just look at the business license fees that were reduced when he came into office.
“All businesses earnings, I think, over $50 million had a tax break. He needs to take his own counsel. … You will see when we present our budget, the efforts and the initiatives we will be taking in respect to inflation and in respect to looking at what taxes we can raise to assist us in our efforts going forward.”
The Bahamas, like much of the world, has been struggling with rising consumer prices since late last year.
In March, the Central Bank of The Bahamas said domestic consumer price inflation rose to 2.3 percent in the last quarter of 2021, an increase over the 0.2 percent registered
during the same period in 2020.
The International Monetary Fund has projected that consumer prices in The Bahamas will increase by 7.3 percent this year.
The increased consumer prices coincided with the Davis administration’s decision to reduce value-added tax (VAT) from 12 percent to 10 and reintroduce the tax on breadbasket items.
The Minnis administration increased VAT from 7.5 percent to 12 percent in 2018.
The Free National Movement has repeatedly criticized the government for reintroducing VAT on breadbasket items. It continues to call for a reversal of that decision.
Speaking to the issue on Wednesday, Minnis said, “So, why not review history and make your adjustments and make your plans and properly communicate to the people exactly what they’re experiencing and what you’re doing?
“They have essentially increased tax on breadbasket items. What they did is they decreased tax for the rich in that once you’re buying property for $2 million or more, rather than paying 12 percent, you’re paying 10 percent.
“So, what they can do is put that back to 12 [percent] and the extra money that they would get from just that one factor, they could use that to alleviate the breadbasket items.
“They’re always asking about where they can get the money from. We have a list of areas where they can obtain the money from.”
Minnis noted that inflation is not a new phenomenon. He said the government just needs to “do their homework” to address it.
Office of the Prime Minister Press Secretary Clint Watson yesterday insisted that the reintroduction of VAT on breadbasket items is not hurting lower-income households.
He accused the opposition of using the issue as a political football.