No New Taxes In Bahamian Budget, Says Halkitis

• Minister for Economic Affairs Michael Halkitis said there will be no new taxes in the upcoming budget as it would be “counterproductive” to economic recovery. 
• Halkitis warned that despite the latest International Monetary Fund’s Article IV Consultation report advocating for more taxes calls for such an increase in taxes would not be in the cards due to the ongoing economic recovery from the COVID-19 economic fallout. This view is also shared by the Prime Minister who stated that adding new taxes would be “an absolute last resort.” 
• Instead, the Bahamas is currently focused on trying to grow the economy into recovery, attracting investment, and doing a better job of tax administration through the new revenue enhancement unit. By attracting investment and growing the economy, the country should see an increase in employment, which in turn increases revenue collected by the government. 
• The fund also advocated for a gradual increase of the VAT rate to the regional average of 15%; and the construction of comprehensive real estate price indices on all islands that would provide a basis for a market-value-based property tax. The latter could be made progressive by increasing the rate on higher value residences. 
• However, Halkitis said any implementation of such a tax would be a “major departure” from what historically has been done in The Bahamas and would have to be done after long periods of consultations with the stakeholders, bearing in mind that the threshold is for companies with $750m in turnover.

(Source: The Tribune)