NASSAU, Bahamas – The Bahamas government Wednesday presented a US$3.316 billion budget to Parliament promising no new taxes, but warning tax evaders that the authorities would be stepping up their efforts to ensure everyone pays the required taxes to the state.
Prime Minister Phillip Davis leads government legislators to the Parliament where he delivered the 2023-4 budgetPrime Minister Phillip Davis told Parliament there would be no increase in value added tax (VAT) Custom duties, excise duty, tax rates or real property tax rates.
“We will instead increase revenue collection by improving tax compliance and enforcement. This is based on a simple principle of fairness,” he said, noting that while “most people pay their taxes” he questioned why “do we allow some not to do so.
Prime Minister Davis said the previous administration allowed “a select group of people not to pay their taxes” and that a taxpayer unit will be established for the 100 or so businesses that account for US$1.7 billion in taxes.
He told legislators that technology will be used to identify anomalies in reporting.
Prior to the budget presentation, the Office of the Prime Minister (OPM) said that the fiscal package is designed to make strides in national security, bolster economic stability and enhance social welfare, all areas vital to national development.
“This budget serves as a testament to our commitment towards the common good and reflects the highest ideals of governance, transparency, and accountability,” it said, adding that the package would be dubbed “A Budget for Security and Progress”.
In his presentation, Prime Minister Davis said he firmly believes “that Bahamians can achieve greatly, whenever we put our minds to it. What each of us needs is just an opportunity”.
He said Recurrent Revenue is projected at US$3.316 billion, Recurrent Expenditure at US$3.085 billion with a recurrent surplus at US$230.7 million.
The government said that first home exemption benefits for owner-occupied residences will now be extended up to triplexes and that concessions for housing projects will be expanded to non-government entities up to maximum construction value of US$300,000 per unit.
In addition, Prime Minister Davis outlined plans for a rent-to-buy scheme which the government is investing in, offering “an alternative path towards acquiring a home by allowing tenants to rent a property with the option to buy it later”.
Regarding crime, Prime Minister Davis said initiatives launched to reduce crime have so far showed promising signs but not coming as quickly “as any of us would like”
He said that hundreds of new police, Defence Force and corrections officers have been hired with funds going towards saturation patrols.
He said that funding increased for Second Chance Programme to reduce recidivism and that an even more comprehensive approach contained in the budget includes prevention, detection, rehabilitation, funds for renovation of community centers and courts plus new judicial complex.
In his presentation, Prime Minister Davis was critical of persons whom he said were pushing issues surrounding national security for their own benefit.
“Violent and often racist language… have no place in our society,” he said, adding “this is the kind of history we should have put behind us. You know, we are all God’s children. We must reject poison, and we must reject hatred.”
The Prime Minister said real growth domestic product (GDP) growth in 2023 projected to settle in the range of 4.3 per cent, adding “we think that’s great”.
He said total revenue for first nine months resulted in an increase of US$267.2 million or 14.5 per cent as compared to previous year. To date, total revenue stands at 73.9 per cent of the budget forecast after nine months.
Prime Minister Davis compares it to 2018-19 before pandemic, where revenue was 63.7 per cent of budget forecast.
He notes an increase in tax revenue, saying it accounts for 72.9 percent of the budget forecast and that compared to 2018-19, it was 62.6 per cent of budget forecast for first nine months.
“Someone called me the chief tax collector,” he laughed, saying licenses for special business activity increased by US$8.1 million to US$89.1 million and that taxes on international trade up to $498 million.
Prime Minister Davis cited positive changes for public sector workers, including increase in minimum wage from US$210 to US$260 as well as industrial agreements signed with various unions, including retention bonus scheme for teachers and administrators, and nurses retention bonus.
He said agreement is in part to prevent “our friends to the north” from poaching our nurses and teachers.
The government said it would continue to leverage public private partnerships, with Prime Minister Davis making reference to projects already underway such as road and airport developments on a number of islands.
“In this budget, we have allocated US$4.7 million to continue an employment program in Grand Bahama.”
He said US$22 million has been set aside in the budget for solar technologies in Mayaguana, Inagua, Crooked Island, Acklins and Long Cay and that a US$20 million facility to encourage green technology in small and medium businesses is being negotiated.
Davis said funds have been included in the budget for the National Youth Guard Programme as part of the efforts in “investing n the future and security of our nation”.
Prime Minister Davis said that there will be a new health facility in Grand Bahama, a new hospital in New Providence, and improvements in infrastructure for Family Island clinics. Also a consolidation of National Health Insurance and Prescription Drug Plan.
In the field of education, the Prime Minister noted that 80 per cent graduates from University of The Bahamas are women, saying it is “noteworthy and disappointing” that more young men are not taking advantage of free education on offer.
