An Ode to Majority Rule Day in The Bahamas - January 10

Majority Rule in The Bahamas

We're now one people under the law

…with the collective power to choose

It has been a long and hard-fought battle

…to where we are today

The noble struggle of our forebears

…against injustice and indifference

Produced an honored people of variety

…to rule our blessed Bahama Land

We're free to determine our destiny

…the roads of which we choose to travel

Peace, love and prosperity

…or war, hate and poverty?

The choice is in the hands of the Bahamian people

…for better or worse

The obstacles of oppression and inequality

…has been optimistically eliminated

Thanks to the unselfish freedom fighters

…our fate is with us now

Majority rule has succeeded

…where do we go from here?

The meaning of the victory in reflection

…something that we must all contemplate

Let’s not waste the revolutionary opportunity

…to thrive in harmony

Bahamians together for a prosperous nation

…the unborn generations will celebrate our feat

The torch of freedom and opportunities for all

…burns deep in our humble hearts

Every citizen deserves liberty

…we all have a duty to ensure the same

Let’s rule with the vision

…and take care of each other

Let the majority remain the keepers of justice

…and minority, civil and satisfied

God bless The Bahamas

…where majority rule reigns with love and compassion

© 2014...2025 Dennis Arthur Dames

Value Added Tax would be a critical element of tax reform in The Bahamas ...as the country battles significant fiscal deficits ...and alarmingly high debt

VAT storm builds

Year in Review

By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Nassau, The Bahamas

In recent months, concerns about value-added tax (VAT) have been mounting.  The debate over VAT has emerged as one of the most significant stories in 2013 and the expectation is that it will also be an important story in 2014.

The government has announced that VAT will be introduced on July 1, 2014.

The tax system would be a critical element of tax reform in The Bahamas as the country battles significant fiscal deficits and alarmingly high debt.

Financial Secretary John Rolle has said repeatedly that the cost of inaction would result in an unchecked rise in debt, less capacity to borrow for emergencies, which increases our vulnerability to shocks like hurricanes and sudden contractions in foreign economies on which we depend for tourists.

“There will also be a credit downgrade and eventual loss of access to credit markets,” he warned. “This will result in one outcome: Much higher tax increases, larger reductions in spending, possible reduction in public sector employment [and] scrutiny of the exchange rate parity.”

The Bahamas’ financial future faces a crisis.

On our current path, it is no understatement that we are doomed without action.

Government debt as at June 30, 2014 is projected to be $4.9 billion, compared to $2.4 billion as at July 2007.

The Bahamas has a legacy of high budget deficits.

Over the last two fiscal years, the government has seen a total deficit in excess of $500 million. The projected deficit at the end of 2013/2014 is $529 million.

The government intends to borrow $465 million to finance the projected revenue shortfall in the 2013/2014 fiscal year. This would add to the $650 million the current administration already borrowed.

Almost one out of every four dollars in revenue collected by the government must be allocated to pay the interest charges on the public debt and cover the debt repayment.

This current state of fiscal affairs is worrying on many levels, and it is unsustainable.

In the government’s white paper on tax reform, Prime Minister and Minister of Finance Perry Christie notes that the government’s revenue base is extremely narrow and ill-suited to the expanding needs and demands of modern Bahamian society.

The country’s tax system is out of balance as it predominantly focuses on goods, he pointed out.

It does not share the tax burden with those who are providing services in a way that is either fair or adequate.

The government has decided to go the way of value-added tax to secure an adequate revenue base in support of modern governance.

According to the white paper, the government intends to effect the eventual reductions in import duty rates that will accompany The Bahamas’ accession to the World Trade Organization (WTO), and reduce excise tax rates to compensate for VAT.

As a consumption tax, VAT provides a broader base for government revenue; imposes taxes on goods and services equally and imposes greater discipline on businesses, the white paper says.

It also says it encourages investments by providing incentives to business on capital expenditure, and the audit trail that would be required promotes greater efficiency in the collection of taxes.

In its look at various options for tax reform, the white paper highlights VAT as a more favorable option than a sales tax, which is a tax imposed at the final point of sale.

Agriculture and fisheries; social and community services; health and education services are among the areas that will be exempted.

But exemptions will be kept “to a bare minimum”, the government has advised.

The effectiveness of the tax is tied to many factors, including how it is implemented, tax experts and others with experience in effecting tax reform have said.

The VAT legislation and regulations are now in circulation, but it is unclear when they will be introduced in the House of Assembly.

Christie has said that while July 1 is a target date for implementation, it is not set in stone.

December 30, 2013

thenassauguardian

Mandela is an unsurpassable example for Latin America and the Caribbean

• Speech given by Army General Raúl Castro Ruz, President of the Councils of State and Ministers, at the funeral honors for the historic leader of South Africa, Nelson Mandela, in Johannesburg, December 10, 2013, Year 55 of the Revolution

President Jacob Zuma:

Family members of Nelson Mandela:

High ranking dignitaries:

Sister people of South Africa:

Full of emotion, we pay tribute to Nelson Mandela, who is recognized as the supreme symbol of dignity and unyielding dedication to the revolutionary struggle for freedom and justice; as a prophet of unity, reconciliation and peace.

Together with his comrades in struggle, he led his people in the battle against apartheid, in order to open the way to a new, non-racial South Africa, united in the search for happiness, equality and the well-being of all its sons and daughters, and to overcome the consequences of colonialism, slavery and racial segregation.

An example of integrity and perseverance, he then led the effort directed toward the elimination of poverty, the reduction of inequality and the creation of opportunities for all.

Mandela is an unsurpassable example for Latin America and the Caribbean, which are advancing toward unity and integration to the benefit of their peoples, respectful of their diversity, with the conviction that dialogue and cooperation are the way forward for the solution of differences and civilized cohabitation among those who think differently.

Humanity cannot respond to the colossal challenges which are threatening its very existence, if it does not do so through a new coordination of efforts among all nations, such as the life of Mandela extols.

Cuba, which has African blood in its veins, rose up in the struggle for independence and for the abolition of slavery and, subsequently, has had the privilege of battling and building together with African nations.

We shall never forget Mandela’s moving tribute to our common struggle when he visited us on July 26, 1991, and stated, "The Cuban people hold a special place in the hearts of the people of Africa."

A symbol of the sisterhood between Africans and Cubans, I recall his close friendship with Fidel Castro, who affirmed, "Nelson Mandela will not go down in history for the 27 consecutive years he spent incarcerated without ever renouncing his ideas; he will go down in history because he was able to expunge from his soul all the poison that such an unjust punishment could have created; for the generosity and wisdom with which, at the hour of the already uncontainable victory, he was able to so brilliantly lead his self-sacrificing people, knowing that the new South Africa could never be constructed on the foundations of hatred and vengeance."

Eternal honor and glory to Nelson Mandela and the heroic people of South Africa!

Thank you very much.

December 11, 2013

Granma.cu 

The potential impact of value added tax (VAT) on The Bahamas

IDB: VAT will lead to higher growth, lower debt, lower unemployment IDB study assumes all additional revenue goes to paying down debt

By ALISON LOWE
Guardian Business Editor
alison@nasguard.com
Nassau, The Bahamas

Although projected to lead to a decline in disposable income at all levels, a newly-released model prepared for the government projects that value-added tax (VAT) will lead to higher gross domestic product (GDP) growth and tax revenue, decreased debt, lower unemployment and lower inflation after an “initial surge” in the first year.

The model and accompanying report, prepared by the Washington, D.C.-based Inter-American Development Bank, suggest that real GDP growth will be higher relative to baselines once VAT is implemented “especially” if VAT is implemented at 15 percent.

Lower unemployment is anticipated by the IDB model in light of a projection of higher tax revenue and the assumption that with this, there would be lower levels of government borrowing which would make it easier for the private sector to borrow, invest and stimulate employment.

Meanwhile, the expectation of a decline in public debt levels is said to depend on the assumption that all of the “additional revenue” generated through fiscal reform would be “directed toward debt reduction”.

The IDB study supports the government’s claims that VAT will lead to no more than an additional three to four percent rise in price levels above normal inflation in the first year, and has been taken by the government to support the case for the implementation of VAT as the cornerstone of the government’s fiscal reform program aimed at reducing debt levels.

However, the IDB states clearly that VAT, particularly at 15 percent, as opposed to a lower rate, would have a detrimental effect on poverty levels without increases in social spending.

Released on Friday along with an accompanying report, it was prepared on behalf of the government to ascertain the potential impact of a VAT on The Bahamas.

“Tax reform cannot be defined and put in place without in-depth studies of its impact on growth, income distribution, fiscal cost, economic efficiency and a comprehensive tax policy and administration reform. Transparency and predictability rest on the best possible estimates of the revenue consequences of reform that available data allows,” states the IDB report.

In this regard, the model looks at the effect of VAT at varying rates on economic growth, inflation, tax revenue, public debt, poverty, employment and the distribution of income.

It has been much anticipated by the Coalition for Responsible Taxation, which is hopeful of using it in particular to look at what VAT’s impact would be on the economy but also what the potential alternatives might be.

The model, described by the IDB as an “economy-wide” one that “describes the behavior of producers and consumers and the linkages among them”, will be shared with members of the coalition, along with staff from various government agencies, today.

The government said in a statement accompanying the release of the study that it supports its plans to implement VAT on July 1, 2014.

“The study predicts that the introduction of VAT, alongside other reforms to reduce the public debt, would have positive economic and fiscal benefits.

“The IDB’s results are consistent with expectations for the type of fiscal reform package that is being considered for The Bahamas. Reducing distortionary taxes on business activities, and placing more direct emphasis on consumption taxes, would stimulate a projected increase in national savings and investments.

“The private sector investment climate would also benefit from expanded access to financing that would no longer be needed to fund government deficits. These are forecasted to contribute to stronger growth potential and reduced unemployment, which would be felt across all broad sectors of the economy.”

The Coalition for Responsible Taxation declined to comment on the results of the study yesterday, which were presented in a 165-page report published on the government’s website.

Robert Myers, co-chair for the coalition, said he would reserve comment until he had met with the IDB today and had a “better review” of the document.

Speaking prior to the release of the study on Friday afternoon, Gowon Bowe, co-chair of the Coalition for Responsible Taxation, said the group was eagerly awaiting the model, and in particular, whether it predicts the possibility of economic growth and only moderate price level increases as the key determinants of whether the private sector advocacy group can accept value-added tax (VAT) as a solution to the country’s fiscal challenges.

“That’s a piece of information that is an integral part of looking at how it will impact the economy. The most important thing is to look at empirical information now to make a determination; there’s been a lot of emotion that’s gone into it up to this point,” said Bowe.

He added: “The pipe dream would be that the model says we would have economic growth with minimal price increase impact. I think there’s sufficient experience that when you take money out of the economy through tax that has a negative impact on economic growth because you are taking money out of the pockets of consumers, but what we will be looking for is whether the price increase is not as high as 10 to 15 percent, which a lot of us are concerned about, and that it is based on good data and is a reliable model. That will give a level of assurance that [VAT] would be positive and not negative.”

However, Bowe noted that the coalition would still harbor concerns about the capacity of the government to successfully administer the VAT, notwithstanding that ministry officials “have placed great hope in the inherent checks and balances in a VAT system”.

The study looks at 16 alternative scenarios, which involve applying different rates of VAT, hotel tax, average import tariff rates and social “safety net” spending, with VAT ranging from 7.5 percent to the proposed 15 percent.

It does not appear to specifically address the question of what happens under a scenario in which there is significant non-compliance or ineffective administration of the VAT, a point which the coalition and other private sector stakeholders have expressed concerned about with respect to VAT.

It also does not appear to consider the potential outcomes should the government not direct all additional revenue from VAT implementation towards reducing its debt levels.

December 09, 2013

thenassauguardian

Russia had no stomach for the Grenadian revolution

By EVERTON PRYCE

IT is often said that the marginal Marxist-Leninist Caribbean state of Grenada under Maurice Bishop's New Jewel Movement (NJM) of 1979-1983 was a satellite of Russia. But many readers of this column may be surprised to learn that Moscow had no desire to aid the spice island economically or otherwise, at levels the native revolutionaries expected.

Shortly after seizing power on March 13, 1979, the NJM's expectation of fraternal assistance from Moscow went into overdrive based on the assumption that communist countries had a greater concern than the West for the plight of Third World peoples.

BISHOP… seized power on March 13, 1979

And given the large cache of Russian-made guns, ammunition and military hardware that found their way in the control of the People's Revolutionary Army (PRA), the outside world also formed the impression that Russia was backing, unconditionally, the aims and objectives of the revolution.

The Bahamas government's Value Added Tax (VAT) option in a fiscal crisis environment

Why VAT and When?

By ARINTHIA S. KOMOLAFE
Nassau, The Bahamas

The Ministry of Finance (MOF) released the draft Value Added Tax (VAT) Bill, draft Value Added Tax Regulations 2013 and Guide to VAT legislation.  This release follows weeks of clamor and demand by various stakeholders.   In the days ahead, it is expected that the public discourse on this crucial component of our tax reform program will intensify as we begin to decipher the documents and properly assess the impact it will have on The Bahamas and Bahamians.

Consultation on VAT

A quick review of the draft VAT Bill will confirm what a number of Bahamians had known in relation to the initial discussions between the government and various industry groupings.

This observation is apparent by a simple comparison of the proposals contained in the white paper released in February 2013 and positions proposed in the draft VAT Bill.  It would be disingenuous therefore to suggest that the consultation period has only just begun with the release of the draft documents.  While none of the concessions agreed upon or compromises made during initial discussions could be said to be concrete or documented before now, it is apparent that the MOF had chosen to incorporate some of the portions agreed with the various sectors, associations and interest groups into the draft that was released last week Friday.

The arguments put forward

The discussion on the introduction of VAT has been predictable until recently.  As was expected, the government has sought to articulate the importance of broadening its tax base to increase revenue as part of its fiscal consolidation plan to correct the country’s fiscal imbalance.   The MOF in leading this charge has highlighted the critical condition of The Bahamas’ finances and submitted that VAT is the best option for boosting government revenue at this point, bearing in mind that tariff rates must be reduced and trade barriers addressed if we are to accede to the World Trade Organization (WTO).

It has been stated and noted that The Bahamas remains the only country in the Western Hemisphere that is not a member of the WTO and the government has warned that this puts us at a competitive disadvantage from an international trade perspective.   While the government has stated its commitment to curbing its spending and reducing subventions to its agencies and statutory bodies, the impact of reducing the public service with the current unemployment figures has been outlined using statistics on the multiplier effect on the economy and consumer spending by the MOF.

On the other hand, the private sector had taken the position that the government need not introduce new taxes but rather focus on cutting its expenditures and efficiently and effectively collect existing taxes including those that remain outstanding.  The private sector had further suggested that the introduction of VAT at this juncture, considering the current economic climate, would be inappropriate and further slow down an economy trying to fully recover from the Great Recession.  A reduction in the size of government, cutting of the public sector workforce and divesting of state-owned enterprises have also been recommended in a bid to address the GFS deficit and national debt.

The meeting of the minds

Our ability to come together in a non-partisan manner in times of crisis for the common good of our beloved country and future generations of Bahamians has become pronounced in recent times.  While it is our hope that this is not an isolated development, it is imperative that we applaud the Tax Coalition of the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), the opposition party and other economic experts for what appears to be a willingness to contribute to the discussion and work with the government to address our fiscal crisis.

While enough blame for our current precarious fiscal position can be placed on successive administrations responsible for the governance of The Bahamas, the Tax Coalition was right in stating that we are all responsible for this predicament and all Bahamians have a role to play in solving our financial woes.   James Smith, former governor of the Central Bank and former minister of state for finance, on his part had reiterated that tax reform, and more specifically the implementation of VAT, will not be without pain.

The meeting of minds on the seriousness of the state of affairs of our finances and the consequences of not embarking on an urgent correction program must precede any logical discussion on the structure, details and specifics of the tax reform framework.  As we appear to have arrived at this point, hopefully the discussions will be elevated to ensure that all parties adhere to their commitments in returning The Bahamas to better financial health and prevent any further downgrades by international rating agencies, multilateral organizations and any potential loss of investor confidence in our economy.

At the core of this matter is the realization that successive administrations have with the help of local and internal experts considered the issue of tax reform and VAT for several years; however, the fortitude to confront the proverbial elephant in the room has been lacking until now albeit this has been spurred by the desperation created by the predicament we find ourselves in.

Preparing for VAT

As the July 1, 2014 proposed VAT implementation date approaches, enough has been said about the need for public education.  Ironically, it has been reported that the turnout for the educational and informational sessions held by the MOF to date have not been too impressive.   The MOF has promised to strengthen its VAT education and awareness campaign in the weeks ahead.   However, it is important that all stakeholders get involved in this process following the release of the VAT governing documents.  The media, industry associations, regulatory agencies, business entities and Members of Parliament will have to play significant roles in enlightening the masses in what is perhaps the most substantial change to our tax system in decades.

The private sector must also ensure that their concerns are documented and brought to the attention of the government.   It would be a worthwhile exercise to properly review the draft legislation with a view to providing constructive criticism and useful recommendations to improve the draft bill.   Business entities will also need to invest their time and resources into understanding what VAT will mean in the context of their operations.

Finally, the general public must fully recognize and appreciate that VAT is a consumption tax; that is, it taxes us on what we consume.   The final consumer will bear the ultimate burden of VAT and hence we must familiarize ourselves with the various goods and services that are subject to 15 percent VAT, 10 percent VAT, exempt status and zero-rated status.   Attendance at upcoming briefing and educational sessions on VAT by all Bahamians and local residents is therefore encouraged by this writer.

The VAT challenge

Regardless of where the VAT debate takes us in the months ahead, we must remember that there is hardly any gain without pain and there is seldom triumph without trials.  Indeed, in Christianity we often state that where there is no cross there is no crown. I n this sense, the days ahead will have challenges but we must look beyond these to the future of our Bahamaland and work towards restoring her by putting country first.

That being said, the government must double its efforts to simplify the VAT debate for the average Bahamian.   The MOF must work tirelessly to consider and address all concerns raised by the public during the consultation period.   The relevant systems must be put in place and resources engaged to ensure the effective and efficient administrative of VAT.   More importantly, the government must continue to demonstrate commitment to fiscal prudence and containment of expenditure.

If our country fails, we all fail, as we have nowhere else to call home or to claim as our own.   It would be illogical not to state that no amount of preparation can guarantee a hitch-free implementation, and the introduction of VAT will not be perfect.  The record shows that other countries have had challenges in spite of having devoted years to preparation.   We must be determined to make it work and co-operate with one another if The Bahamas is to emerge successfully from this fiscal crisis.   In the final analysis, the government will have to unequivocally convince the public as to why VAT is the best option at this time and confirm the implementation date.   One thing is certain: The urgency of now does not provide us with much time.

• Arinthia S. Komolafe is an attorney-at-law.  Comments on this article can be directed to a.s.komolafe510@gmail.com.

December 03, 2013

thenassauguardian

The history of ganja and the Jamaican society is interesting and instructive

The ganja law of 1913: 100 years of oppressive injustice

By Louis MOYSTON

THIS year marks the 100th anniversary of the Ganja Law of 1913. This law was rooted in fear and also in a tradition of law-making that discriminated against lower class black people. It is a racist law that epitomises the oppressive injustice of slavery and the colonial/planter system. This racist law was the idea of the Council of Evangelical Churches in Jamaica. The Law gave the police special powers which members of the force used, in a brutal and repressive manner, against the people in general and the Rastafarians in particular. The Ganja Law of 1913 must be abolished and replaced by a new regime. The earliest debates on ganja were informed by elite white perception and anecdotal evidence. They lacked the philosophical, logical and scientific perspectives.

The history of ganja and the Jamaican society is interesting and instructive. It is interesting because of the major characters and setting associated with the Law of 1913 and its subsequent amendments. It is instructive because it illustrates the brutal nature of law-making process in post-slavery society, and its oppressive application against the masses, lower class black people. The emergence of the campaign and preparation of this oppressive instrument, the 1913 Law and its Amendment in the 1920's, was led by the Church and white elites. During the 1930's and 1940s the newspaper in combination with elite perception, the police and the Resident Magistrate were the major characters in the amendments in that period. In the pre-and post- Independence period the government through the Ministries of Home Affairs and later the Minister of Health led the ganja debate of the 1960s and 1970s. Today it is the Minister of Justice who plays the lead role for the government in the current ganja debate. The planter-controlled society meted out severe punishment to black labourers in the form of extremely high fines for penalties from court cases in the post-emancipation period. The fine for ganja, "a victimless crime", was exorbitant for people who had little or no money. When the fines were not effective as deterrent, they were combined with mandatory imprisonment. It was this law that introduced "mandatory imprisonment" in the jurisprudence landscape of Jamaica. This measure did not curb the use of ganja.

At the end of the 19th century into the early 20th century, the church in Jamaica saw its power declining. There were the emergence of the revivalist movements and also an increasing of vices — use of opium, ganja and alcohol. It felt that it had the moral obligation to curb, if not destroy these vices. Many newspaper reports have illustrated the issues of the church regarding ganja smoking among the "natives"; and also its association of ganja to insanity. In 1912 there was an Opium Convention at The Hague. There were also increasing concerns in Jamaica on ganja smoking among the "natives". According to one study, the Council of Evangelical Churches prepared the Law and sent it to the Legislative Council in 1912. It was not acted upon. In the same period the newspaper published that out of 283 people admitted admitted to using ganja. About the same period there was another article on the "Dangers of ganja smoking among the natives of this colony" illustrating the dangers of ganja smoking now that there is increasing evidence of ganja smoking among black people. The white elites associated violence with ganja smoking; and since they perceive black people as 'brutes' they developed narratives of the 'evils of ganja smoking' among lower class blacks. During the colonial/planter rule racism was the order of the day; and high fines as oppressive penalties were meted out against lower class black people for the simplest of crimes. The matter of race emerged again in the mid-1960s was raised by government Senator Ronald Irvine in the ganja debate with Opposition Senator Ken McNeil.

The Ganja Law of 1913 was employed against the "cultivation and importation" of ganja, punishable by a fine of one hundred pounds or up to 12 months imprisonment. The same Council of Evangelical Movement observed that the Law of 1913 was "practically useless". According to reports the Church called for amendments for smoking selling and entering premises upon which ganja is grown by the police. There was no regard for the rights of man on how he used his private property. This reflection on the second amendment took at the time of the 1924 UN Opium conference in Geneva. The 1924 Amendment, inspired by the Church called for drastic increased of fines and imprisonment on first conviction. It was renamed "Dangerous Drug Law of 1924". The 1930 and 1940's was marked with the rise of the early Rastafari movement and the role of lower class black people resisting oppression. The leading newspaper and the white elites began a national campaign against ganja against their fears about the plant. The police and the Resident Magistrates of the parishes were the leading characters in the amendment of the 1924 Law. There was concern that ganja smoking may have been associated with the uprisings among the masses in 1938. The 1937 Marijuana Tax Act may have provided propaganda during the period.

The 1940s amendment was, in part, a response to the emergence of Leonard P. Howell and the early Rastafari movement. The development of the Ganja amendments in the 1960's was also associated with radical activism by Rasta and also violence associated with the Henry back-to-Africa movement. It was the period of the "Coral Gardens Affairs" that the amendments of the 1960s took place. New developments in Jamaican politics in the 1970s and influence from scientific developments about ganja smoking, smashed the anecdotal allegations of the past. This led to profound change of the ganja law in the 1970s by removing the list of criminal activities associated with the law and its mandatory imprisonment characteristic. A study of Ganja Smoking in Jamaica completed by Rubin and Comitas in 1972 may have also had influence on the ganja debates of the 1970s. Changes in the USA during the 1990s and 2000s, have influenced levels of ganja lobbying in Jamaica that led to the Chevannes Commission in 2000 and the current initiative led by the Minister of Justice, Minister Mark Golding, respectively. The time has come for a new regime for ganja, similar to the license and regulation of alcohol. According to Fraser (1974) in his study on the ganja laws in the region, the eradication of ganja is impossible and the time has come for a new legal regime.

Louis EA Moyston

thearchives01@yahoo.com

December 02, 2013

Jamaica Observer

Obama’s unfulfilled Gitmo promise

• Five years after his election, the U.S. President has not closed the prison on the illegally held Guantánamo Naval Base

By Manuel E. Yepe

THE failure to fulfill electoral promises made by candidates who win U.S. presidential elections is not news.  In fact, this is corroborated by the corporate press in that nation.

 

However, in the case of current President Barack Obama – whose triumph had much to do with the relatively daring promises which allowed him to overcome the odds against him, given his ethnic and social origins and age, among other aspects – his failure to meet his promises has placed him in a position which could prove damaging to the Democratic Party in the 2016 elections.

 

One glaringly evident case little mentioned in the media is that, during his 2008 presidential campaign, Obama described the case of Gitmo (as the illegally naval base is identified in the United States) as “a sad chapter in American history,” and promised that, if he were to be elected, the base would closed in 2009.

 

Shortly after his election, the new president reiterated his promise to close the base in an ABC television interview.

 

However, in November 2009, Obama was forced to acknowledge that it was not possible to set a specific date for the closure, while announcing that it would most likely occur at some undetermined point in 2009.

 

On December 15, 2009, a presidential memorandum issued by Obama ordered the closing of the prison camp and the transfer of the detainees to the Thomson Correctional Center in Illinois.  Shortly afterward, in a letter to Congressman Frank Wolf, who was making every effort to avoid the transfer of the Guantánamo detainees to Thomson, U.S. Attorney General Eric Holder stated that such a move would violate legal prohibitions which he was determined to uphold.

 

And thus this vacillation has continued to date, in a clear demonstration of the President’s unwillingness to confront the issue, despite popular will as expressed in the elections.

 

It should be noted that there has been no media reference in recent history to the fact that the base’s very existence is indefensible and that a genuine solution must include, as a principal step, the return to Cuba of this occupied territory.

 

During a workshop with Cuban experts on the 110-year occupation of Guantánamo by the United States, which took place recently in Havana, Jonathan Hansen, associate professor at Harvard’s David Rockefeller Center for Latin American Studies, affirmed that few in the United States acknowledge that the base must be returned to Cuba, and that the problem is how to make this matter an issue for discussion.

 

The United States occupies this portion of Cuban territory in virtue of an unjust agreement of indefinite duration imposed on Cuba in February 1903, as one of the addendums to the Platt Amendment, introduced as an appendix to the Constitution of the nascent Cuban Republic through pressure from Washington.

 

Sooner or later, Guantánamo must disappear and this ignominious enclave will remain as one more sad page in the history of U.S. imperialism.

 

November 28, 2013

 

Granma.cu

If The Bahamas government cannot collect what is now owing ...how will it supervise and collect the taxes from Value Added Tax (VAT)?

Warning On Vat From Barbados

Tribune242 Editorial
Nassau, The Bahamas

OVER the weekend, Elcott Coleby, deputy director of Bahamas Information Services, sent a release to the press to announce the downgrade by Standard & Poor of Barbados’ financial rating – the second in four months. Barbados is listed in tenth place as one of the world’s most heavily indebted countries. From a rating of BB+ it has been dropped to BB-.

“The downgrade reflects the mounting external pressures associated with a persistent current account deficit and external financing challenges, as well as the ongoing high fiscal deficit largely because of a substantial fall in government revenues as a result of the weak economy,” the agency said.

“In reacting to the news,” according to the Barbados press release, the “former president of the Economic Society, Ryan Straughn, said the latest rating has not come as a surprise and suggested that the writing had been on the wall for some time since Government did not go ahead with the expenditure cuts announced by the Minister of Finance in the August 2013 Budget.”

But what interested us even more was Mr Coleby’s warning at the top of the Barbados release. “This,” wrote Mr Coleby, “is where the Bahamas could be headed if it fails to act — sooner than later. So far, the Bahamas government has successfully staved off another downgrade in 12 months — thanks to its fiscal consolidation plan. Barbados was not so lucky.”

Nor will the Bahamas be, if it does not get its reckless spending under control.

However, if this hint from NIB is a message from government to hasten the pace for the introduction of VAT, it should slow down and give the matter more thought. It’s a warning for caution. VAT was introduced in Barbados on January 1, 1997, at the standard rate of 15 per cent. However, Barbados took its time investigating and testing before it took the plunge. Nevertheless, after 16 years, VAT has obviously not been the perfect solution. Barbados still does not have its spending under control and the very event that VAT was meant to avoid has happened — another S&P downgrade. Although several Caribbean countries have VAT, it is interesting to note that Grenada experimented with it in 1980, but quickly abolished it. It would be interesting to know why.

On October 1st, the Barbados government – to bolster its failing domestic tourism – reduced the VAT rate on “hotel accommodation” to 7.5 per cent, extending it to the Direct Tourism Service, which had been 17.5 per cent.

It was noted in an article posted by “David” on August 25 that July 2013 recorded Barbados’ “lowest number of long stay visitor arrivals across the last 11 years in any same month.” The land-based arrivals for the same year in October and November was examined and it was discovered that “both again, alarmingly recorded their lowest comparable monthly figures for the past decade”.

In another article, which noted that Barbados, although it had “enjoyed good credit ratings in days of old because of bullish tourism and international business products,” no longer did so because of the general world picture.

It highlighted several problems that needed urgent attention in view of the international down grading. Bahamians should take note of at least one of them, because, with a few amendments here and there, it is a serious problem in the Bahamas.

“It is apparent,” said the Barbadian writer, “that a few of the statutory bodies have grown to be financial albatrosses around the necks of taxpayers. Barbadians know too well those statutory bodies which political parties ‘pad’ to guard party support. Now that money has dried up this strategy of protecting the party faithful has been exposed for what it is, an unsustainable practice. Deal with it!”

Here in the Bahamas after last year’s election Bahamians saw this in high gear as large sums were spent on clearing land in the name of Urban Renewal. It was claimed that it was part of a plan to clear bushy areas that attracted crime. There was a hue and cry when these “landscapers” went on the land turning areas into arid waste and even trespassing on private property. At the end of this unconscionable waste of public money, nature laughed in the face of the politicians and in a few months the bush, in which the criminals allegedly hid, returned — but the money had already been wasted.

Then there was the flushing out of certain areas of the civil service to make room for party faithful. It was claimed that the price paid for this was a return to inefficiency.

Of course, there is also the non-collection of taxes. The question being asked is if this government cannot collect what is now owing, how will it supervise and collect the taxes from VAT.

Of course, an item that is now of paramount concern to the public – especially in these tight economic times — is the cost of official travel by government ministers at public expense. Former National Security Minister Tommy Turnquest in a page 1 article today has urged Prime Minister Christie to give a financial accounting of his delegation’s trip to CHOGM in Sri Lanka, and the side trips to Rome and London. We shall comment on this in this column tomorrow.

However, the point that rankles Bahamians is government’s apparent reluctance to cut unnecessary spending. Bahamians resent having to be taxed to support the status quo. Unless government sets an example, Bahamians will grumble. This is the frequent complaint that we hear within the ranks of the unions.

November 25, 2013

Tribune 242 

The Bahamas government should not bend to public pressure over value-added tax (VAT) ...says Bahamian Attorney, Wayne Munroe

Munroe: Govt should push ahead with VAT

By TANEKA THOMPSON
Guardian Senior Reporter
taneka@nasguard.com
Nassau, The Bahamas -

Attorney Wayne Munroe said the government should not bend to public pressure over value-added tax (VAT).

The Christie administration has been criticized for not yet releasing the VAT legislation and regulations with the proposed implementation date eight months away.   The government’s VAT public education program has also come under fire.

However, Munroe said these issues do not mean the government should delay or abandon the tax.

“They just need to get it done, all this nonsense about educating the public about tax, [were] any of us educated about the business license or real property tax or customs duties?

“So [why] suddenly the great need to educate us over VAT?  The people who have to collect it, pay it and administer the system must be told and must make themselves aware of what they need to know and that’s it.”

Munroe also suggested that it might be strategic for the government to delay the release of the VAT legislation and regulations, so people have less time to figure out how to circumvent payment.

“The government’s objective is to maximize revenue collection.  If you give me a month with a bill, I will probably be able to show deficiencies that would be able to beneficially impact my client and adversely impact government revenue collection.

“So there is nothing unusual about not circulating a revenue statute in advance and anyone with sense would know that.  The less time I have with it, the more time you have before I find out a clever way out of it.

The new VAT regime proposed by the government would allow the state to impose widespread penalties on those who fail to comply with the new act and its regulations, including heavy fines, shutting businesses down, publicly naming and shaming, the seizure of goods and the auctioning off of assets and even jail time.

The new regime proposes to allow the Central Revenue Agency (CRA), which the government is setting up to regulate and collect VAT, to demand details of assets from banking institutions, garnish money owed to registrants by others and restrict access to travel for those who owe outstanding taxes.

Under the new tax system, delinquent taxpayers can also be restricted from travel until outstanding taxes are settled.

Munroe questioned the rationale of this provision and said it should not be included in the final draft of the VAT legislation.

“You can’t restrict my movement because I owe the government money, because what does one have to do with the other?

“Does that mean poor people can’t move about?  Now, the U.S. for instance can refuse you entry into their country if you owe people money, but that’s because you have no right of entry into the U.S. or any other country other than your own.

“I can’t see them seriously talking about restricting your movement because you owe taxes.”

The government plans to roll out VAT on July 1, 2014 at a rate of 15 percent in the wide majority of cases.

However, Prime Minister Perry Christie has said he reserves the right to delay the implementation date.

VAT is expected to add an additional $200 million in revenue in the first year of implementation, officials estimate.

November 25, 2013

thenassauguardian

Chinese solutions

• Series of measures to advance reforms approved by the
18th Communist Party Central Committee third plenum

By Claudia Fonseca Sosa

CHINA continues to surprise.  The government of the nation which, in the not so distant future, could displace the United States as the first economy in the world has announced a new reform package which seeks to reorient its growth model toward internal consumption and limit the country’s dependence on external markets.

In 1979, a process of socioeconomic transformations designed to unleash the country’s productive forces began.  The development model implemented was based on stimulating foreign investment and exports, with excellent results sustained over the years, which allowed it to accumulate a surplus of billions of dollars.

The Chinese economy was also able to maneuver in order to survive the explosion of the international financial bubble in 2008.

However, the Asian giant now has a dream: to double the gross domestic product and per capita income by 2020, comparing these indicators with those attained in 2010 when the country grew by 10.3%. For that, President Xi Jinping has stated that the country must make strategic readjustments to its economic structure and increase efficiency in state supervision mechanisms.

The government aspires to the entire population of 1.3 billion Chinese equitably enjoying the benefits of development and the measures announced by the 18th Communist Party Central Committee in its recent third plenum are directed toward this goal.

"The fundamental objective of the reforms approved is to improve and develop socialism with Chinese characteristics and to move forward with the modernization of the system and the capacities of the country’s government," states a communiqué read in the event’s closing session.

The document places emphasis on the need "to establish an appropriate relationship between the government and the market" in order to grant the latter more decisive participation in the assignation of resources."

According to the official press, the Communist Party of China (CPC) is to create fair, open and transparent market regulations, as well as to improve the mechanism of market prices so that businesses can operate in an independent manner.

At the same time, China is to undertake fiscal reforms, lower the threshold of foreign investment, intensify the development of free trade areas and increase the opening of interior, coastal and border areas, with a view to creating a new kind of relationship between industry and agriculture.

Other measures approved will allow small farmers to enjoy more property over land and production means, establish a sustainable social security system, create new urban-rural relations in order to solve difficulties arising from large waves of internal migration, and increase the population’s standard of living in terms of access to health and education services.

Also announced was a modification of the family planning policy, taking into account demographic changes in the country with the highest number of inhabitants in the world – and the oldest – to satisfy the desire of many families to have more than one child, which has been the established limit.

The communiqué also announced the decision to direct more resources to the army and to promote scientific and ecological development.

But what is the nature of these reforms?

As Cuban analyst Eduardo Regalado, at the International Political Research Center, explained to Granma, given the financial crisis in its principal markets (Europe and the United States), the Chinese leadership has been obliged to reduce its dependency on foreign capital and strengthen the internal market, one of the largest in the world.

Chinese products which, prior to the crisis, sold very well given that they were cheaper, began to be prejudiced by the competition of European and U.S. products (in other words, from the same countries to which they sold them). At the same time, Chinese acquisitive power has increased and this raises the question of why sell to others if the same goods can be purchased in China.

For Regalado, these adjustment measures seek to further raise the population’s standard of living and to close the gap in development between rural and urban areas. They would also provide a solution to the country’s internal difficulties, which have occurred as a consequence of development itself, such as environmental contamination, migration from rural areas to cities, among others.

Moreover, an important transformation within the projections of Chinese leaders is to transition from a rapid growth model - with the country growing as more factories open - to a model of intensive growth, in which science and technology play a significant role in production processes, a model which, at the same time, is to address ecological issues and depends less on external markets.

November 22, 2013

 

Granma.cu

 

Yes, The Bahamas is in a serious debt position ...but the present government has a nerve to ask the Bahamian people for more tax money ...to support the continuation of the manner in which our past taxes have been wasted

Government Must Be Held Accountable For Public Spending

Tribune 242 Editorial
Nassau, The Bahamas:



SINCE THIS government has come on the scene, it has stumbled from one sink hole into another. Nothing seems to be going right, because there is no planning, no co-ordination, and, as we have said before, each cabinet minister seems to have his own agenda and his own game plan.

Several months ago, when it was suggested that Prime Minister Perry Christie should reshuffle his cabinet, he is quoted as having said words to the effect that the timing was not right as there were cabinet members who had agendas that they wanted to complete. If there were cohesion in the Christie government, the only agenda to be completed would be government’s agenda, and anyone not at one with that agenda would be shuffled out. This goes to the very core of what is wrong with this administration. There is no strong leader who can keep his colleagues following the same road map.

They don’t even seem to speak the same language. For example, with all the negative feedback, Mr Christie seems open to the idea of exploring new avenues to raise taxes, provided businessmen can suggest alternatives to VAT. Despite this, State Minister of Finance Michael Halkitis has said that there are no plans to postpone the July 1, 2014, date for the implementation of VAT. If there are no plans, then why should the Prime Minister ask for suggestions to find a new, less complicated way to raise taxes and drop VAT?

About the only subject on everyone’s lips today is VAT. And the more government spokesmen try to explain it the muddier the waters become. As a matter of fact, these spokespersons don’t seem to fully understand it themselves, leaving Bahamians at the end of their question-and-answer sessions more perplexed and less confident than before. As a result, public anger and confusion has grown. Grown to the point that at the end of the day the country might see a vocal group of young people ban together to hold government’s toes to the fire.

The Insight feature in today’s Tribune is a speech given by a young mother, who is also a branch manager of a local bank.

Tamara van Breugel, because of the lack of information coming from government, went on her own journey of education and was alarmed by what she discovered. Along the way, she also found many intelligent, like-minded young Bahamians who want to turn a new leaf in our history books and build a new Bahamas. They are fed up with the underhanded shenanigans that have been going on for far too long among what old Bahamians used to call their “representers”. So our readers should be on the watch for Citizens for a Better Bahamas. We predict that Mrs van Breugel’s speech is the launch of a vocal, enthusiastic and, we hope, more responsible Bahamian.

As we have said in this column before, for a government promising 10,000 jobs almost as soon as it became the government, the suggestion of VAT was suicidal. True, government has to get itself out of debt not only to prevent its credit rating from being downgraded, but to become a member of the World Trade Organisation (WHO). Among the many rules and regulations that have to be followed is that government will have to drop its tariffs on imported goods so that the goods of WHO members can enter the country more easily. This means that government will have to find a substitute to the present Customs duties. However, it does not mean that VAT is the answer. If government can’t police the collection of Customs duties now, it will never be able to afford enough inspectors to supervise VAT. A simple sales tax would seem the more sensible route.

Today, we publish a letter from a concerned Bahamian who vowed he would refuse to open his books to any government inspector, until government opened “their” books for public inspection. He was on the right path, but he made one mistake. Government’s books are not “their” books. These books belong to every taxpaying Bahamian. We have a right to know how our money is being spent. We have a right to demand that those books be opened for inspection.

This government started immediately on its grand shuffle among government employees, moving competent persons from their jobs, and replacing them with less competent party supporters. Not only does that create a state of inefficiency in a department, but it is a costly exercise. The clearing of land in the so-called Urban Renewal project was a scandalous waste of public funds. The money used was public money — our money — and we, the people have a right to know. Not only did workers trespass on private property, but the money handed out, regardless of the work to be done, warrants a public inquiry. A government representative is duty bound to prudently administer public funds — administer it as if it were his own. None of that prudence was shown in the Urban Renewal land clearance plan, for example — it was just pay-back election time. The public should demand an accounting of this scandal.

During this belt-tightening time, all of these overseas trips should he scaled down. Certainly, the public has a right to know the cost of every one of them, right down to the last glass of champagne. Remember, this is the public’s money that is being so liberally spent – while the public debt steadily rises.

Mrs van Breugel points out that in the auditor general’s 2010/2011 report, he discovered that:

• 5,980 cargo manifests had not been presented to Bahamas Customs for clearance;

• $95 million in real property taxes went uncollected, taking the total sum outstanding to $541.886 million;

• $302,866 of unpaid fuel from The Ministry of Works.

In the 2014/2015 fiscal budget, subsidies have been allocated as follows:

• $20 million to subsidise Bahamasair;

• $20 million in subsidies to Water and Sewerage;

• $7 million to the Bahamas Broadcasting Corporation.

And so the horror story of how the people’s money is being misspent continues.

Our finances would not be in such a sorry state if we had better managers in charge, and a government that did not believe that it can play Santa Claus with other people’s money.

Yes, the Bahamas is in a serious debt position, but this government has a nerve to ask the Bahamian people for more tax money to support the continuation of the manner in which our past taxes have been wasted.

November 18, 2013

Tribune 242 

Bahamas Blog International

A note to Hubert Minnis on value-added tax (VAT) in The Bahamas ...and how we got there

VAT How we got here

A note to Hubert Minnis

By CANDIA DAMES
Guardian News Editor
candia@nasguard.com
Nassau, The Bahamas

Amid what appears to be a growing public tide against the July 1, 2014 implementation of value-added tax (VAT), Free National Movement (FNM) Leader Dr. Hubert Minnis has finally released a position on this contentious issue.

It came as pressure grew within his party for the official opposition to make a clear statement on what would be the most dramatic shift in tax policy in decades.

The statement Minnis came up with is stunningly shallow.  It lacks intellectual rigor and shows a startling lack of vision and leadership, all of which we desperately need at this stage of our development.

That is surprising in the sense that he should have access to the facts and to sound advice from qualified and knowledgeable people within his own party.

Given how long it took him to release a statement, he should have had adequate time to formulate a more reasoned position that could be taken seriously and add value to the ongoing discussion on tax reform.

But given his record on matters of serious import (for example, multiple positions on gambling), no one should be surprised that his sole approach is to attack the government on its plans without presenting a well thought out contribution to this growing debate with accompanying proposed policy alternatives.

It seems once again that the opposition leader has gauged the direction of the wind and formulated his position based on the mood of the country.  But be mindful that his position could shift again with any sudden temperature change or change to the national tone.

Minnis, who 18 months ago sat as a minister of government, called on the current administration to immediately “come clean to the people, and to explain, precisely and clearly what the circumstances are which have prompted this sudden lurch towards the imposition of VAT”.

It is worrying that the official opposition leader does not know the answer to this question.

Minnis is operating as someone who only entered the political arena in May 2012, distancing himself from the actions of the former administration.

He pretends instead to be blind to the fiscal circumstances of the day, but more importantly to the fiscal realities that existed while he was a minister of government, and the decisions taken to address those realities.

While no one should excoriate the FNM leader for setting along his own path and defining his own leadership style, he and his party are saddled with their record in office.

They cannot run from the decisions taken by the FNM administration — the good and the bad ones.

If as opposition leader Minnis does not know what the circumstances are that have prompted this “sudden lurch towards the imposition of VAT”, he might be ignoring easily available facts.

Progressive Liberal Party (PLP) Chairman Bradley Roberts has gone as far as saying Minnis might be suffering a case of memory loss.

“How else [do you] explain his scolding for a debt crisis created by his own party?” Roberts asked.

“Or was Dr. Minnis asleep at the Cabinet table when his government approved, borrowed and spent over $2 billion in five years, running up the national debt and pushing the country into this current fiscal dilemma?”

If Minnis is not sure how we got to where we are, he might find it useful to do a bit of research and examine the facts of the country’s debt levels.

This might jog his memory.

In August 2011 when the international credit rating agency Moody’s downgraded its outlook for the Bahamian economy from stable to negative, it pointed to the significant run up in government debt levels in recent years and the country’s limited growth prospects.

Moody’s noted that debt rose steadily between 2000 and 2008, but over 40 percent of the increase occurred between 2009 and 2011.

Government debt at the end of June 2011 was estimated at $3.5 billion. It has continued to grow.  It is projected to be $4.9 billion when the government implements VAT next July.

This is unsustainable. We are in crisis.

Had the Free National Movement been re-elected to office last year, we would have been facing the same urgent need to tackle our debt, and reform our narrow and inefficient tax system.

Reform

Before Minnis twists himself into an impossible situation and puts his credibility on the line, perhaps he ought to have a discussion with former Minister of State for Finance Zhivargo Laing, his former Cabinet colleague, who helped engineer fiscal policies under the Ingraham administration.

Laing has not hidden the fact that the FNM had planned to implement VAT within “two to three years” if it had won the election last year.

The PLP administration is seeking to do it at the start of its third year in office.

Laing said more recently, “In office, we certainly looked at implementing it and if returned to office would have given it early consideration.  However, we would have also given it broad consideration in the context of the wider reforms to our tax system that we were already undertaking.”

So Minnis’ own party was eyeing what he now calls a “regressive” taxation system.  He may wish to examine why his party also thought this regressive tax was the best option.

He now warns that VAT would “seriously impair the already weak, uncompetitive and struggling Bahamian economy and harm and diminish the quality of life of every Bahamian”.

Unlike Minnis, Laing does not run away from the fact that the Ingraham administration piled on the debt.

The pace was dizzying.

Laing noted in a speech to the Rotary Club of Freeport in August that, “A country can borrow to cover its deficits for a long time, for decades and decades.

“It can even do so increasing its debt to GDP ratio to extraordinary levels, above 100 percent, but the price to pay for this is reduced ability to afford products and services (education, infrastructure, technology, etc.) that could lend to a more prosperous, efficient and peaceful state.

“Minimizing deficit spending is good government policy, especially in times of economic growth.”

The former government has been sure to provide a clear explanation that the high level of borrowing was needed in the face of a dramatic downturn in the global economy.

That explanation has been arguable, as the PLP accused the Ingraham administration of taking actions to worsen an already bad situation.

While prime minister, Hubert Ingraham had said often in his last term that without borrowing the government would not have been able to do simple things, like pay the salaries of civil servants.

Minnis ought to know that we are now suffering the fallout of sky-high deficits and annual borrowing.

To be clear, the vast majority of the resolutions to borrow were approved in Parliament by the then opposition led by Perry Christie.

Nobody likes to hear of new taxes, and so VAT and tax reform was not a prominent theme of the 2012 general election campaigns.

Upon coming to office, the PLP itself feigned surprise at the state of public finances.  With that excuse in hand, it continued to borrow, saying it needed to do so to deal with the problems it inherited from the Ingraham administration.

“The fiscal accounts are in much worse shape than we had expected as we came into office,” Prime Minister Christie told the House not long after the May 2012 general election.

“In our very short time in office, it has become clear to us that the previous administration has, through its actions and fiscal policies, constrained our room to maneuver.”

In May 2013, the Christie administration brought a resolution to the House of Assembly to borrow $465 million to finance the projected revenue shortfall in the 2013/2014 fiscal year.

This added to the $650 million the new government borrowed in its first year.

Government debt as a percentage of GDP is projected at 56.4 percent at the end of 2013/2014.

Christie advised that much of the money the government borrowed last year was required to cover unpaid financial commitments incurred during the Ingraham administration.

“The legacy of high public deficits and spiraling debt burden that we inherited is brutally onerous: almost one out of every $4 in revenue collected by the government must be allocated to pay the interest charges on the public debt and cover the debt repayment,” he said.

“Had we chosen to ignore the grave structural imbalance in the public finances, the debt would have continued to spin out of control.”

This year, the government will spend an estimated $230 million on debt servicing alone.

While it is true that the PLP claimed to have immediate but unrealistic answers to attack our fiscal and economic woes while on the campaign trail, it is not on its own responsible for the current state of affairs.

It matters not at this juncture who is to blame, however.  What is required now is reform to arrest the growing unsustainable debt levels.

As stated by Laing in his address to Rotary, “If you want to punish those who drive up cost through waste or bad decisions, then do that at election time, but know that the cost still has to be paid by the citizens.”

Minnis may wish to read and carefully consider that useful and informative address delivered by Laing.

In the speech titled “VAT and its implications for The Bahamas and the Bahamian economy”, Laing pointed out that the government needs cash and it needs it badly.

“We are in discussions about VAT implementation because there is a glaring reality confronting The Bahamas, which is that its income cannot pay for its operations,” Laing explained.

“It has not done so from The Bahamas became an independent nation.  We have run deficits and financed those deficits with borrowings since 1974, when we ran a deficit of some $33 million.  Incidentally, we had a surplus of about $3 million the year before that, the last such surplus seen on total budget performance.”

Laing continued, “In the wake of the crippling effects of the global recession of 2008 and the strain it put on the revenue of the government, our deficit spending has reached extraordinary levels, which is unsustainable, especially in light of the modest growth seen both in terms of the world’s economy and our domestic economy so dependent on it.

“The government needs money to pay for its expenses, and it needs money badly.  That is why VAT is being discussed with the sense of urgency that it is being discussed today.  In 1995 when the issue first arose, it was being discussed as a planning function; today it is a practical issue of money.”

Details

The Nassau Guardian last week reported on the government’s proposed VAT bill and regulations. It is not clear when these will be brought to Parliament.

The debate cannot be vibrant and well informed without the official release of what is being proposed.

Minnis has said the PLP should immediately disclose to the Bahamian people the details of any economic studies and analyses either by domestic or international advisors or agencies that have led the government to this proposed course of action.

Many people are indeed awaiting the release of an economic impact study to show specific projections resulting from the VAT implementation, including the projected cost of living impact.

Financial Secretary John Rolle said last week that the cost of living is expected to rise between five and six percent in the first year.  There were no details to show how these figures were arrived at, and there were no projections provided for cost of living increases in subsequent years.

This year is almost ended, and the government will have six months to clearly make its case, to seek to calm frayed public nerves, and cause for a smooth implementation of the new tax system.

That is ambitious.

Anecdotal evidence suggests the government is losing, not gaining support from the public on its push toward the implementation of VAT.

Its marketing of the initiative is on shaky ground, and it is only now just starting its public education campaign.

While there is an urgent imperative to act, it appears that on its current track, the new tax system could be off to a chaotic and undesirable start — a difficult birth, as we opined here previously.

What the government needs now is a more community based VAT campaign and a bit more time to get the message out.

It might be in the interest of everyone to push off the implementation date by a few months.  It would allow the business community and consumers to better digest the details of VAT.

And perhaps it would give the opposition leader a bit more time to better understand how we got to where we are.

We hope it would also give the government a little more time to present a tax reform package that has buy-in from the opposition.

On a matter this grave, such a buy-in could only be in the national interest.

thenassauguardian