Statement by Philip Brave Davis
Leader of the Opposition
On Standard & Poor & Dismantling of Revenue Enhancement Projects
November 28th, 2017
Tomorrow the Standard and Poor Rating Agency will commence its consultation with various Bahamian stakeholders in preparation of its annual review and Credit Rating Assessment. Considering the knee jerk actions of the Ministry of Finance since May 2017 and the many confusing, misleading and contradictory statements by the Minister of Finance and the Acting Financial Secretary to date, the Progressive Liberal Party has grave concerns with regards to the upcoming consultations and the outcome of the review process.
Of particular concern is the flippant dismissal of over thirty (30) Bahamian professionals from the Central Revenue Agency last week. I am advised that these individuals were assigned to and working on various revenue enhancement projects and have been extremely successful in increasing Government revenues and collecting much elusive and long outstanding Government taxes.
What is particularly alarming is that Moody’s in its recent Bahamas review credited the work of these individuals on various revenue enhancing projects as one of the main reasons that that agency did not downgrade our Credit Rating. Moody’s said and I quote ”On the revenue front, the government has taken steps to strengthen tax enforcement, particularly in property tax collections where evasion is relatively high, as well as reinforcing customs revenue administration to raise additional income.” This was primarily the work of the Bahamians sent home last week without no real reason and just a few days before Standard and Poor begins its consultations.
The Government’s dismissal of these professionals must also be viewed against the fact that per capita The Bahamas has the least number of revenue collection persons versus tax payers in the region and all of the multilateral financial institutions have advised over the years that we are grossly understaffed in the area of revenue collection and administration.
What is motivating this Government to jeopardize the national economy and the credit rating of an entire country in the name of foolish politics and ego?
At a time when the Post Office is in shambles and it is unlikely that most tax payers will receive Real Property Tax payment notices, how can such actions be justified?
Further will the Government finally be able to advise the Government and S & P as to what is the projected deficit for this year and the calculation method used as based on various pronouncements by the Minister of Finance it seems to fluctuate between $600 Million and $700 Million -with a difference of $100 Million every time he speaks. That is a huge difference. Do we really know what is going on at Finance? Is the Minister receiving sound and competent advice and information?
Will the Minister and the Financial Secretary play politics and talk down the Treasury and the economy of the Bahamas now that the Rating Agencies are here? One day the cupboards are bare and it’s a disaster and the next day international financial markets show confidence in The Bahamian economy, according to them. One day for political fodder $42 Million cannot be accounted for and several days later it is mysteriously in the Consolidated Fund where it always was. You cannot have it both ways and play games with such crucial matters.
There seems to be no clear plan as to where we are going in terms of revenue collection and financial management. The Government seems focused on undoing all of the good work done in the interest of the economy and all Bahamians. Their actions essentially has resulted in the dismantling of the various revenue projects left in place that were yielding positive benefits for the country.
We want what is best for the Bahamas! We want our country to do well and to receive a positive review and rating. So we ask again, what is the plan? We should all be on the same page going forward.