PM reveals detail plan to steer Bahamas out of its Debt Crisis
NASSAU, The Bahamas — Prime Minister the Rt. Hon. Perry G. Christie announced the Government’s fiscal plan of action for 2012/2013 and beyond while presenting the 2012/2013 Mid-Year Budget Statement on the six months ending December 31, 2012 at the House of Assembly, Monday, February 25, 2013.
“At the mid-year, the Government is making internal adjustments to ensure that we meet the GFS Deficit target of 6.5 per cent of GDP that was presented in the last Budget Communication,” the Prime Minister said.
“Moreover, we are beginning to lay the foundation for more comprehensive reforms to deliver on a medium-term consolidation of public finances. Honourable Members may expect a more detailed elaboration of policy actions to achieve our objectives in the forthcoming 2013/14 Budget Communication.
Prime Minister Christie said the Government is making structural enhancements to improve revenue performance and tighten expenditure controls over the medium-term.
He said the Government will engage, over the coming months leading up to the 2013/2014 Budget Communication, in a comprehensive review and assessment of all revenue areas with a view to seeking a means of enhancing the Government’s revenue collections going forward.
Revealing the select measures to enhance the recurrent revenue, the Prime Minister said, “Measures will be taken to improve the infrastructure of Customs electronic submissions, thereby strengthening revenue controls and reducing Customs personnel costs.
“The review of Customs fees is part of our overall reassessment to bring fees more in line with the cost of providing Government services. Government fees are an area we will review more comprehensively in the 2013/2014 Budget Communication.”
Prime Minister Christie said the Government is moving to further strengthen real property tax administration.
“The Government will present in the next Budget Communication a comprehensive programme to reform the real property tax administration, which will include new legislation, software and operating procedures. In the interim, to provide relief to taxpayers, we are announcing a new amnesty programme in respect of real property taxes, also effective March 1, 2013, that will incentivise increased payments.”
He explained that there will be four components to the programme. To encourage, self-registration, owners of residential properties above the $250,000 exception threshold, and owners of commercial properties, who have never received a property tax bill will be encouraged to register their properties with the Chief Validation Officer by June 30, 2013. For further registrants, the Government will waive all back taxes if any.
To encourage registered property owners with arrears to become current with their tax payments, the Government will provide waivers as follows:
Where no more than three years of payment arrears exist, 50 per cent of the total owed in both assessment and surcharges, provided payment is made by June 30, 2013;
where accumulated arrears for more than three years exist, 100 per cent of surcharges only, provided payment is made by December 31, 2013.
To reward residential property tax payers who are current with their assessments, the Government will rebate five per cent of the annual real property tax assessment, provided the owners remain current with their payments over the next three years.
To make Real Property Tax more client-forward, the Government has introduced a person to automatically review all instances of year-on-year variation in residential property tax assessments of more than 15 per cent or where the average yearly increase between revaluation exceeds 10 per cent.
Those efforts are being taken to clean up the real property tax register and modernise the administrative infrastructure so that, going forward, the Government can take a firmer stance in enforcing compliance.
The Prime Minister said to provide enhance assistance to small business operators and promote growth and jobs recreation, the Excise Tax on trucks less than 20 tons is being reduced from 85 per cent to its previous level of 65 per cent.
“That is also expected to generate increased revenue for Government through increased purchases of trucks. I would flag at this point that the Government will, as we develop the next Budget Communication, also thoroughly review the entire structure of Excise Tax rates on all motor vehicles, while bearing in mind the traffic and environmental implications.”