The Crux of The Bahamas National Trade Policy

The Bahamas Ministry of Economic Affairs Launches First-Ever National Trade Policy

The New Bahamas Trade Policy is intended to lower trade deficit and empower local Bahamian businesses

After years of stakeholder consultation and collaboration with local and international experts, the Government of The Bahamas has launched the National Trade Policy, an initiative that has been spearheaded by the Ministry of Economic Affairs.

The National Trade Policy was formally unveiled at a press conference hosted by the Ministry of Economic Affairs on Thursday, 25th of May, 2023.  At this press conference, members of the media were afforded the opportunity to hear from the Minister of Economic Affairs, Senator, the Hon. Michael Halkitis, Bahamas Trade Commission Chairman, Philip Galanis, and other technical experts who highlighted the work that went into crafting the policy, as well as the impact it is projected to have.

Minister Halkitis stated that the primary objective of the national trade policy is to tap into the unexplored areas for the international trade of goods and services where there is vast potential for Bahamian businesses to benefit.

He noted that this policy will supplement the economic development and diversification initiatives that the Davis administration has taken on since taking office.

“The National Trade Policy is a key component of a wider developmental strategy to diversify the economy, empower Bahamian businesses domestically and internationally, and lower the trade deficit.  Key areas that are being targeted by the government, such as niche agricultural and fisheries products, uniquely Bahamian crafts, food, and goods, and green, blue, and orange economy products and services will all benefit from this policy.”

Acknowledging the calls by local businesses for greater ease in conducting international business and exporting goods and services abroad, Minister Halkitis said that the National Trade Policy will help to facilitate the import and export of in-demand goods and services, ushering in a new era for trade in The Bahamas.

“We know that many businesses have called for the government to reform existing processes to make exporting their products more seamless.  Through this policy, we believe that we have put the right mechanisms in place.  We will expand awareness through stakeholder education to arm local businesses with everything they need to expand their customer base beyond the borders of The Bahamas.”

As the policy moves from the development phase to the implementation phase, Minister Halkitis noted that the government will continue to keep its ears open to local businesses and its eyes open for international opportunities.

“The policy we have before us today is the product of continuous stakeholder engagement.  We have incorporated much of that engagement to ensure that the policy before us today is as strong and comprehensive as possible.  As we implement the policy, the key is to remain agile and open to ways we can continue to strengthen the policy in response to local needs.”

Minister Halkitis encouraged all local businesses and aspiring entrepreneurs who are interested in engaging in international trade to stay tuned as the government continues to engage with the local business community to empower businesses of all sizes to take advantage of the new national trade policy framework.

“Ultimately, the true measure of the effectiveness of this policy lies in its ability to empower Bahamian businesses, lower the trade deficit, and contribute to the creation of a more resilient and diverse economy. We encourage all businesses to get informed and get involved.”

Any business owners who wish to learn more about the National Trade Policy can download a full copy of the policy document at https://moea.gov.bs/the-bahamas-national-trade-policy.

Source 

Value-Added Tax (VAT) in The Bahamas ...and its “positive” impact on the Bahamian economy’s growth and employment prospects ...in the medium-term

Idb Study Shows Vat 'Positive' For Jobs, Growth

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau, The Bahamas




An Inter-American Development Bank (IDB) study has shown that Value-Added Tax (VAT) will have a “positive” impact on the Bahamian economy’s growth and employment prospects in the medium-term, a senior official said last night.

 

John Rolle, the Ministry of Finance’s financial secretary, said that despite the IDB study being incomplete, the ‘preliminary results’ showed the Government’s tax reform centrepiece would also result in reduced inflationary pressures.

 

“While the IDB study is ongoing, we have seen the preliminary results, which attest to the projected positive economic impact of the fiscal reforms (growth and employment over the medium term), and to the reduced inflationary pressures to which the budgetary consolidation would contribute,” Mr Rolle told Tribune Business.

 

“Additional historical data is being added to the economic model, which will allow the researchers to fine-tune their results. Afterwards the results of the study will be published.”

 

Mr Rolle was commenting after the IDB used its October quarterly bulletin on the Caribbean to confirm it is working with the Government on implementing VAT in the Bahamas. It said its study on the new tax’s impact on the economy and wider society was only “underway”.

 

“The IDB has been working with the Government of the Bahamas to assist with Value-Added Tax (VAT) implementation,” the Bank’s October missive said.

 

“Using an econometric model, the IDB has provided specific input on the effects of the changes in revenue of the proposed VAT rates and the base on which the VAT will be charged.

 

“An economic impact study that assesses the effect on prices, economic growth, poverty and income distribution is currently underway. Consultations on the creation of the Central Revenue Agency, which will administer the VAT and select the IT system, are currently underway.”

 

Despite Mr Rolle’s assurances, the IDB’s comment is still likely to raise eyebrows in the private sector, as it indicates that the true ‘number crunching’ on VAT’s impact on the wider Bahamian economy and society has yet to be completed, and with implementation of the new tax now less than eight-and-a-half months away.

 

It is also unclear whether the Government internally, via the Ministry of Finance, has completed ‘VAT economic impact’ studies of its own, or whether this work has been done by other agencies, such as the International Monetary Fund (IMF, or external consultants.

 

A Ministry of Finance press statement earlier this year referenced work done by the IMF and its regional affiliate, CARTAC, on a Bahamian VAT, although no specifics about the nature of their work were released.

 

One observer who raised such questions was Rick Lowe, an executive with the Nassau Institute economic think-tank, whose own study on VAT’s likely impact on the Bahamas has been belittled by various government officials.

 

Suggesting that the Government’s moral authority to do this was diminished by the absence of any completed studies of its own, Mr Lowe argued that the burden of VAT collection/administration was being placed on those companies that were already 100 per cent compliant with their taxes.

 

And, noting the contents of the 2010-2011 Auditor General’s Report, which found that another $95 million in unpaid real property tax was added to the existing ‘sum owing’, taking this to over $500 million, Mr Lowe questioned how the Government expected to collect everything due to it under a VAT.

 

“It’s a basket case, it really is,” Mr Lowe told Tribune Business. “How do we expect to implement a more convoluted tax system if we can’t administer the basics?”

 

He added that the experience of other countries that had implemented VAT was that new taxes did not stop there, often being followed by income taxes and other revenue-raising measures.

 

“It’s a never-ending way to tax people,” Mr Lowe added. “It’s the thin end of the wedge. If we’re not capable of collecting basic taxes, heaven knows, not to mention the underground economy.”

 

He added that VAT would likely drive more Bahamians to online shopping and trips to Miami, and said of the IDB’s comments on the economic impact study, or lack of it: “How can they [the Government] stand up there and berate anyone who has concerns based on the impact of VAT on other countries in the region, and they’ve not done a study yet? It speaks volumes.

 

“They berate anyone who stands up and raises questions, and those questions result from government’s lack of information. We’re beeped down as if we’re dummies.

 

“They’ve [the Government] been forging ahead as if it’s a fait accompli, and haven’t done a cost benefit analysis. Have they considered the impact on businesses close to the edge? Obviously they haven’t. Is it going to destroy the economy and they get less revenue? Is that the Government’s intention?

 

“If they haven’t done the basics yet, how can they just think they can throw their hands up and say: ‘We can take more money from the citizens?’ It’s unconscionable. I weep for our country.”

 

Questioning why the Government had allowed “this large swathe” of non-real property tax payers to exist, Mr Lowe said VAT would impose an even greater tax burden on those who were already paying their bills.

 

“To say we can’t collect the taxes already on the books, and to tax more people who legally do what’s right and pay the taxes they ought to pay, something’s wrong with that reasoning,” he added.

 

October 21, 2013

 

Tribune 242

 

Bahamas Blog International

 

...the health of the tourism industry and its myriad of impacts on The Bahamas

Surviving in These Hard Times
The Bahamas Journal Editorial


As in the case of any number of professionals working in the tourism industry, Robert ‘Sandy’ Sands has his finger on the pulse of this aspect of the nation’s economy; and here as everyone knows, tourism provides the very life-blood of this nation’s economy.

In good times, very many Bahamians flourished and prospered; thus that situation where today’s taxi drivers, straw vendors, jet-ski operators, hoteliers and a host of others are today parents and family to so very many of this nation’s professional classes.

Evidently, while this pattern might be maintained for a while yet, there are indicators suggesting that the industry will become more competitive; that it will demand more from those who work in it; and commensurately, that the government and its social partners should – as a matter of the most urgent priority – see to it that, this industry remains well-maintained.

Here we sincerely believe that, when all is said and done, Bahamians can and should be given a crash course in tourism; with the subject matter being focused not only on the safety and well-being of the tourist; but on the fact that, the tourist need not visit the Bahamas.

This is the fact that must be drummed in day and night and until such time as the vast majority of Bahamians get it that no one owes them anything; and that, they are obliged to work for every penny they take home.

This point is today being underscored by none other than, outgoing Bahamas Hotel Association (BHA) President Robert ‘Sandy’ Sands.

This man –as we learn – “… is calling the year“ a mixed bag of revenue gains, higher operating costs, and global uncertainty”, even as most tourism indicators inched up in 2010…”

Sandy Sands goes on to note that, “Indicators in general moved closer to our 2008 pre-recession benchmark…”

Here we note – albeit in passing- that, he made these remarks while addressing members of the BHA at its 58th annual general meeting on December 3rd at the Wyndham Nassau Resort.

As he explained, “Projections for next year show continued marginal growth as we slowly pull out of one of the most difficult economic periods in decades.”

This is the unvarnished truth about that matter currently concerning the health of the tourism industry and its myriad of impacts on the Bahamas.
But ever the optimist, Sands suggested that, despite the current slew of challenges, BHA members could and should be optimistic about the future; this due to the fact that, “foundational steps which have been and are being undertaken,” [are taken together] leading or tending in the direction of an “…emerging interest in tourism investments in The Bahamas…”

Here take note that, Sands also indicated that, measures that were put in place in 2010 by the public and private sectors should steer the industry out of the doldrums quicker than many of the nation’s competitors.

As he also pointed out, “These include major airport infrastructure improvements well underway in Nassau and Abaco and the liberalization of the telecommunications industry…”

And so, the conclusion beckons that, despite much of the noise in the market, things are trending in a positive direction for our country.

But for sure, this is not to suggest for even a moment that things are set to bubble up and that happy days are somewhere right around the corner.

Indeed, every indicator – social and otherwise- suggests that, the Bahamian people are in for a fairly rough ride as they adjust their life-styles and expectations to what is being termed in the United States, the New Normal.

In this regard, and as in the case of so very many other Bahamians, we can attest and affirm that this has been a very difficult year; and that, it has also been a time when one’s faith has been tested.

But as in all things human, we give thanks not only in good times, but also in these times of trouble. As we have been taught – and so do we believe- hard times bring with them very important life-lessons.

Among the lessons that are there to be remembered is the one that suggests that we should lay aside some of what we have earned or harvested so that when the hard times roll in; we need not trouble ourselves with unnecessary despair.

But even as we take note of the truth inherent this nostrum, we know it for a fact, that very many Bahamians are today mired in distress precisely because they dared yield and cling to the illusion that, things would always be good.

In the ultimate analysis, then, the times are changing; and as they do, some of our people will gird up their loins, take pattern after other industrious people and thereafter make some things happen.

This they must do if they are to prosper in conditions where the New Normal is the pervading reality.

December 16, 2010

The Bahamas Journal Editorial

Bahamas Blog International

Economic prosperity in The Bahamas and the Overseas Territories

By D. Markie Spring
Turks and Caicos Islands


The Bahamas and the overseas territories, especially the British Territories -- British Virgin Islands, Cayman Islands and the Turks and Caicos islands -- have always declined the idea of regional integration -- sometimes from an individual prospective and at times from governmental concerns.

In fact, The Bahamas is mostly dependent upon tourism to grow its economy. This country’s proximity to North America has placed it in an ideal position, which ignites, propels and escalates the tourism industry there. Furthermore, its tourism industry accounts for about 60 percent of the country’s gross domestic product (GDP), whilst other important sectors of the GDP, such as tax and the financial sectors, make up the other 40 percent of GDP.

Let me stress that, although the economy there seemed vibrant hitherto, in years to come The Bahamas tourism industry will not be able to sustain its economy. From an economic prospective, The Bahamas economy is not diverse enough for future sustainability.

Recently, the global economic downturn has resulted in the loss of thousands of jobs in The Bahamas alone. Because its economy relies heavily on visitors’ arrivals, which experienced a sharp decline, hoteliers were then forced to lay off workers. Some hotels had more employees than guests in-house.

The government of The Bahamas has an obligation to further diversify its economic environment through regional integration. When the tourism sector is affected, whether by natural disasters or by an act of terrorism or by challenges derived from social, environmental, political and economic factors, The Bahamas must be able to turn to an alternative sector for economic sustainability.

Similarly, the overseas territories -- especially Britain’s -- have also illustrated lack of support for regional integration. With much focus on the Cayman Islands, this country’s economy relies heavily on its humongous financial services industry, which is ranked fifth in the world’s banking centers. In addition, the government also piled up revenues from its taxation system. This together has placed the Cayman Islands at the top in the region, relative to the standard of living.

Looking at Cayman’s economic environment allows me to conclude, hitherto, that this country’s economy is not diverse enough to maintain viability in the long run. With the financial challenges faced by the United States and the European Union, the financial sector there is gravely affected.

Additionally, the Cayman Islands were forced to regulate its banking operations under the principles of the European Union Savings Directives (EUSD), coupled with intense pressure from the Organization for Economic Cooperation and Development (OECD) to prevent Cayman Islands’ offshore financial centers from becoming a tax haven. In addition to this, the current US president has disclosed his intention to exert severe pressure of the use of Cayman’s financial centers by multinational corporations.

Moreover, the International Monetary Fund (IMF) has set up programs that regulate the money laundering regime, and the country’s banking, securities and insurance industries. Similar environments exist in the other overseas territorial states.

Constructively, I looked at the lack of interest in regionalism from a Bahamian and from the prospective of the overseas territories and I understand the reason. Picturing the many people who would move from countries with weak economies and high unemployment rates to seek jobs in those places; figuring the movements of other Caribbean national – creating mass migration – I do understand. However, if the situation is being looked from a wider prospective then it should be known that there will be many benefits to gain and that rules and other stipulations will be in place, which would govern the movement of foreign citizens, such as having an assigned job before taking up residence in another country where more jobs are available.

The Bahamas and the Caymans Islands along with the other overseas states must join the rest of the Caribbean to integrate their efforts in making the Caribbean a region a region to reckon with. I stress that individually we won’t be able to sustain our economy and these countries’ economies are not diverse enough to stay strong for much longer. Some citizens purported that too many Caribbean countries are economically disabled to have successful integration; this does carry some concerns; however, the EU has successfully integrated with only the countries in Western Europe having strong economies.

Interestingly, the US, the world economic power, has established many regional bodies to enhance the country’s economic sector.

December 15, 2010

caribbeannewsnow

Bahamas Blog International

Bahamas: Loan Arrears Hit $1 Billion

LOAN ARREARS HIT $1 BIL
By CANDIA DAMES
Guardian News Editor
candia@nasguard.com:



Bahamians are now more than $1 billion in arrears on their loans as the public continues to struggle with keeping up mortgage payments.

In its latest economic report, the Central Bank said the banks'credit quality indicators deteriorated further in July.

According to the report--"Monthly Economic and Financial Developments July 2010"--this was buoyed by sustained high unemployment levels and a challenging business environment.

While there are no recent numbers on unemployment, it is widely agreed by those in government and in business that the rate of joblessness remains in the double digits.

With regard to the main components, the expansion in total arrears was due primarily to a rise in the dominant mortgage segment, which accounts for 52.0 percent of delinquencies.

The report said total private sector loan arrears rose by$22.4 million(two percent)to$1.2 billion, with a corresponding increase to 18.6 percent of total loans.

"The current numbers evidence the fact that the economy is still under some pressure and will probably continue to be for the near future,"said Barry Malcolm, chairman of the Clearing Banks Association and Managing Director of Scotiabank Bahamas Ltd., in an interview with The Nassau Guardian last night.

"Notwithstanding the current levels of delinquencies we're confident that the situation is stabilizing and will improve into 2011."

The Central Bank said that in terms of the average age of delinquencies, arrears in the short-term 31-90 day segment grew by$13.3 million(2.6 percent)to $534.2 million, resulting in an expansion in the corresponding loan ratio to 8.6 percent.

In addition, non-performing loans--those more than 90 days in arrears and on which banks have ceased accruing interest--rose by $9.1 million(1.5 percent)to $629.5 million, firming in the ratio to total loans to 10.1 percent.

Smaller gains were noted for the commercial and consumer categories, which comprise 23.3 percent and 24.6 percent of arrears, respectively.

Mortgage delinquencies expanded by $20.0 million(3.4 percent)to $606.8 million, owing to growth in both the 31-90 day, and non-performing segments of$11.3 million(3.5 percent)and $8.7 million(3.2 percent)respectively, the report added.

Malcolm told The Guardian that the absence of significant growth in the economy right now and the likelihood that growth will be slow in coming over the next year speaks to the need for prudence in how consumers save and spend.

In the United States, the economic outlook remains much more subdued than originally forecast.

Last week, Chairman of the Federal Reserve Ben Bernanke confirmed this.

Malcolm said,"To the extent that is the case in the U.S., it will as it always does have some direct effect on us."

Patricia Birch, who heads the Bahamas Real Estate Association, noted that it is impossible to tell from looking at the new numbers whether the majority of loans in arrears are for first-time property owners.

"Some of these may be properties that are not primary residences of Bahamians but may have been investment properties that they bought at a time when they were working steady and these may be lots or properties in the out islands or even here in Nassau,"Birch said.

"Certainly people are going through difficult circumstances, but in my opinion the banks do try to work with people as much as they can because banks are not interested in owning houses or property."

9/2/2010

thenassauguardian

Bahamas Blog International