IN A few hours time, the old year will have quietly slipped away and a new year, filled with uncertainty, will have taken its place. Bahamians face 2015 with much foreboding.
Business owners – who have never dealt with taxation before – have had to convert their businesses to accommodate a value added tax (VAT) only to discover three days ago that government is yet to publish all the rules that they are expected to follow.
Business owners are in a quandary. Consumers are fearful that they won’t be able to afford the inevitable rise in the cost of living, while unions want salary increases that the country cannot afford. The final blow is that our country has been pushed out of the number one position as the ideal tourist destination. It has dropped from favour, because not only has it lost its manners, but it has priced itself out of the market. Until Bahamians understand the realities of life and are prepared to make sacrifices, 2015 will not be a successful year for the nation.
Earlier this year, New Zealand experts – brought all the way from New Zealand to advise our government on the implementation of VAT – emphasised the importance of having a Freedom of Information Act (FOIA) and a Fiscal Responsibility Act in place before introducing VAT. They explained that this legislation had been important to help establish New Zealanders’ trust in their government’s efforts to implement VAT. New Zealand had its FOIA in place five years before VAT was introduced. Then with the introduction of VAT their government passed a Fiscal Responsibility Act to allow “fiscal reporting”.
With Bahamians’ growing distrust of their government, it is vital that this legislation be treated as urgent. However, Education Minister Jerome Fitzgerald, claims he cannot turn his attention to this urgent matter before 2016. And Tourism Minister Obie Wilchcombe has taken offence because he considers the demand for a FOIA questions the government’s integrity. Mr Wilchcombe and his colleagues should know by now that the time for beating about the bush is over – we are in fact questioning government’s integrity. Bahamians were told that VAT was necessary to reduce the country’s debt. Bahamians no longer want verbal assurances, but proof that every cent of VAT is in fact going towards debt reduction. We now want the books opened so that we know VAT is in the fiscal column for which its collection became necessary.
Whether Bahamians accept it or not, the lifting of the US embargo on travel to Cuba is a threat that the Bahamas is going to find difficult to accommodate. When Cuba was closed to the outside world, the Bahamas, under the late Sir Stafford Sands, was quick to seize the opportunity to step in and fill the void.
Cuba, Spain’s last and oldest colony, retained its Spanish culture, and attracted more than three million tourists a year before the Castros took over. Within two years of the Castro regime, tourism to Cuba had dwindled to a trickle. The Bahamas stepped into the void, and it was not long before, as one of the late Sir Lynden Pindling’s Cabinet Ministers was fond of saying, the Bahamas became the “Numero Uno” tourist destination.
But no more, Bahamians, so sure of themselves, rested on their laurels and soon lost the race. The Bahamas now ranks fifth behind the Dominican Republic, Cuba, Jamaica and Puerto Rico.
During a recent visit to Grand Bahama Prime Minister Perry Christie, pointing out that the world had become incredibly competitive, emphasised that “sun, sand and sea” were no longer the buzz words of tourism.
“The people of the Bahamas must be the defining difference,” he said. “And so to those young persons who are now working in the tourism industry, no matter how much you think you ought to be making now and you are not, the job you are doing is directly connected to the health of an industry that provides this country with three-quarters of the income that it now earns. You have direct responsibility to be the best you can.”
As for the retail industry, already SuperValue’s owner Rupert Roberts is having to defend his prices. Customers are accusing food retailers of price gouging on grocery items even before VAT comes into effect.
Mr Roberts says he has nothing to hide. He went to great lengths in last Monday’s Tribune to explain why.
He said that goods now on his shelves were brought in under the former Custom’s duties, which in preparation for VAT government has recently reduced. However, his present prices reflect the Customs duties on goods imported under the old tax.
“They have to understand that when we imported the goods presently on our shelves, the relaxed customs rates were not in effect,” he said.
“The relaxed rates promised by the government will affect our next stock of products, our prices will reflect those reduced rates and the savings will be passed on to the customer.”
Mr Roberts said that representatives from the Consumer Protection Unit visit his stores almost weekly to verify that his charges are correct.
“We have had dozens of formal complaints and Consumer Protection is investigating and will levy fines on those persons who are price gouging,” Labour Minister Shane Gibson told The Tribune. “We reduced customs duty on many of the goods in the food stores ahead of value added tax in hopes that they will actually pass the savings on to customers. But we are finding that this has not been the case.”
It was because of this statement by Mr Gibson — who said that the complaints were mainly against SuperValue – that The Tribune reporter asked Mr Roberts for an explanation.
The main complaint by consumers was the increased price of eggs.
Instead, Mr Roberts put the blame for the high prices just where it belonged — at government’s door. He suggested that the higher prices on eggs, for example, were the result of a weather-induced import supply squeeze and the government’s decision to raise the duty rate on eggs to 30 per cent to protect local producers.
This reminds us of the days when this country was a colony with the governor and his executive council having the final say of what the Public Treasury could afford to spend on public works.
The late Sir Alvin Braynen, Harbour Island representative, later Speaker of the House, used to boast that he would make all sort of promises to his constituents knowing that the colony had no funds to execute any of them. Of course, the governor, with not enough money in the Treasury, would reject his requests. Sir Alvin would then return to his constituents, with a long face and blame the governor for not granting him the funds to keep his promise. Of course, Sir Alvin remained their saviour, while the governor was in the dog house.
Mr Gibson, in blaming the retailers for a government decision, reminds us of Sir Alvin.
It is now up to the Bahamian people to open their eyes and understand what is happening in their country. Only their best efforts will save the nation, because we seem to have a government that has lost its way.