Could we be looking at another VAT Increase and possible downgrade?
Nassau – The Minister of Finance, less than two months into the fiscal year, is now coming to the realization of what most observers accepted in June 2018: his budget plan was flawed.
How the Minister responds to this crisis will say a lot about his character and resolve, not to mention his understanding of the critical role he plays in managing our economy. He has any combination of four options.
a) Would the Minister seek to hide the fiscal performance of the Government by not providing timely fiscal updates, further eroding his creditability both domestically and internationally?
b) Would he swallow his pride and seek to work with his Comptroller of Customs and remove his friend from Grand Bahama from Inland Revenue in an effort to implement a sensible revenue strategy based on improved compliance, not tax rate increases?
c) Would he seek to initiate a retrenchment of expenses in the public service to offset under performing revenue items and unexpected expenditure (purchase, renovation and operations of the Grand Lucayan) and in doing so accelerate the economic decline bought about by his flawed budget?
d) Or would the Minister go against his very nature and speak frankly and honestly to his colleagues and the country about the mistakes made and his plans to correct them?
Our bet is that he would choose the easy way out so option (a) followed by option (c) are the likely choices.