PM says he will keep VAT promise

Davis says PLP will honor what it committed to doing

Prime Minister Philip Brave Davis said yesterday his administration will move forward with fulfilling campaign promises, including reducing value-added tax (VAT) and increasing minimum wage, “as soon as the dust settles”.

“We are still putting our government in pieces together,” said Davis, who was sworn in as prime minister last Friday.

“As soon as we get to the actual business of governing, which requires a structure to be put in place. I’m meeting the proper personnel. You will see us complying with the promises we made.”

The cost of living has been a public concern for some time in The Bahamas, with residents frequently expressing frustration over increased expenses and stagnant salaries.

The high cost of living has been exacerbated by The Bahamas’ fragile economic situation triggered by the ongoing COVID-19 pandemic, which caused a months-long shutdown of the country’s tourism industry last year, and Hurricane Dorian, which severely damaged Abaco and Grand Bahama – the second and third largest economies in The Bahamas – in September 2019.

Currently, the minimum wage is $210 per week.

In July 2018, the Minnis administration increased value-added tax (VAT) from 7.5 percent to 12 percent.

In the Progressive Liberal Party’s (PLP) “Blueprint for Change”, the party promises to recommend to the National Tripartite Council that it move towards a minimum wage of $250 per week.

While on the campaign trail, Davis promised to lower VAT from 12 percent to 10 percent for 12 months. The pledges is also made in the party’s blueprint.

In March, then Minister of State for Finance Kwasi Thompson said the PLP’s plan to reduce VAT was “completely irresponsible”.

He said it would be impossible for the government to maintain its spending levels with the projected loss in revenue.

“It is regrettable that the opposition would use a matter as serious as our fiscal and economic health to choose to engage in rank populist politicking. They will say anything to win an election,” Thompson said.

However, the PLP has countered that decreasing VAT would spur activity in the domestic economy.

Davis has indicated that his administration intends to move forward with the tax cut.

On Saturday, when asked for a timeline on the reduction of VAT, he replied, “As soon as I decide on our minister of finance and what we will do with that. We will very shortly make an announcement on that in the coming weeks.” 

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Jasper Ward

Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues. Education: Goldsmiths, University of London, MA in Race, Media and Social Justice

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