Bahamas: Minister of State for Finance, J. Kwasi Thompson, responded to the proposed VAT Cut.
The Opposition would use a dispute as serious as our financial and economic health to choose to engage in rank populist politicking is regrettable. The opposition will say anything to win an election.
Finance Minister reminds the Opposition that the administration operates under the Fiscal Responsibility Legislation – enacted by this government – precisely to eradicate the kind of arbitrary and self-serving status put forward by the shadow Bahamas finance minister over the weekend.
The Opposition’s plan of action would be led to a dramatic fall-off in revenue likely in excess of $100 million amid their proposed 12 month period, at a time when the nation’s financial resources are under tremendous strain, and the requirements for administration to support social and economic programs are even more pronounced.
The authority cannot operate by trial and error. The 12 month period would only destabilize the economy of the nation, causing the PLP to have no chance but to return VAT to 12% the following year or incrementing to 15%. “The nation needs stability and consistency,” he added.
A 2% cut in VAT does not ensure that additional spending is needed and will not be enough to achieve the amount of economic-activity to replace the loss in revenue. It would be impossible for the administration to maintain its spending levels with that status of loss in revenue. It is fully irresponsible.
Opposition themselves claim that they will do an analysis of the financial situation once they are in the office. But without this review that they claim is very critical, now that we are at the time of the election, they have already decided the course of action.
Bahamians would do well to note that they have admitted that they plan to act first before assessing the situation. Possibly they do not yet realize that that approach to the constituency is why the Bahamian people fired them in the first place.
This FNM authority does not play dangerous games with the fiscal health of the nation. That is why – despite the two most impactful economic disasters in the tale of the country – our plan of action has been clear and convincing. We must take care of our people by giving them the necessary support.
The plan of action calls for better tax enforcement, reforming State-Owned Enterprises, managing our expenses with more focus on public-private partnerships for critical infrastructure and sustainable debt management. We must also be focused on developing the economy, improving the ease of doing business, growing the digital economy, and digitally transforming administration.
This FNM government has introduced fiscal responsibility legislation. It has, for the first time in the nation’s history, produced and published annual fiscal strategy records. It has, for the first time in the country’s history, reported on its budgetary and fiscal activities every s quarter, even though no laws require the administration to do so.
The PM Minnis administration has set the standard for fiscal transparency and accountability in the Bahamas. On this point, there can be no challenge.