The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Free National Movement’s (FNM) deputy chairman believes it would be “unconscionable” for the Government to implement Value-Added Tax (VAT), suggesting that it could instead cut its fixed costs by around 10 per cent.

Dr Duane Sands, who commissioned a survey that found that just 3 per cent of Bahamians supported VAT in its initial 15 per cent form, told Tribune Business that the Christie administration did not seem genuinely interested in hearing alternative fiscal reform options.

Speaking in a recent interview, he echoed those calling for the Government to first maximise revenues under the existing tax system before looking to introduce new revenue streams.

And, calling for a balanced approach to fiscal reform, Dr Sands urged the Government to examine its recurrent spending for areas where it could eliminate waste and inefficiencies, suggesting this could save $150 million out an annual $1.5-$1.7 billion fixed costs outlay.

“It’s being done without honestly considering alternative proposals,” Dr Sands told Tribune Business. “Yes, there’s been rhetoric suggesting they have interest in hearing alternatives, but they’ve not honestly, actively engaged those sectors of the business community and those opposed to VAT in any meaningful way. They have dismissed out of hand; this won’t work, this is better.”

Suggesting that debate over the $550 million in outstanding real properly taxes said to be owed to the Government had “deteriorated into an emotive fiasco”, Dr Sands said: “The challenge is we need to look at the existing tax regime, see where there are challenges that can be corrected, and correct them.”

He suggested that the Government “can get rid of” $150 million if it had the will to examine its spending, and cut out unnecessary waste.

“It’s going to mean an end to political patronage, and end to unacceptable concessions that some special interest groups have enjoyed for a very long time,” Dr Sands told Tribune Business.

“To say you’re going to put this yoke [VAT] around the workers and businesses of this country, and on the backs of the poor people, is unconscionable.”

Dr Sands said he engaged an independent market research company, Silver Lining Enterprises, to conduct the VAT survey so that its findings could not be branded as tainted by politics.

“I’m looking forward to the attacks,” he added, pointing out that an objective examination of the company’s work would show the survey of 2,000 Bahamians from all New Providence constituencies could not have been done “any more rigorously or scientifically”.

“This is the way we ought to be making decisions; on the basis of data already gathered,” Dr Sands added. “I thought it was so important for this country’s development and stage we’re at now.

“The challenge is to corroborate what everyone knows in their gut; that Bahamians are overwhelmingly opposed to this. What I sought to do was get away from the speculation, and to get a large enough sample size with rigorously specific methods that we could say: ‘This is a fair and accurate representation of the views of the population’.”

The Dr Sands-financed survey asked eight basic questions of Bahamians from all New Providence constituencies. Asked whether the Government should introduce VAT, just 6.8 per cent responded ‘yes’, with 27.75 per cent saying they were unsure and the overwhelming majority, 65.45 per cent, giving a resounding ‘no’.

When it came to the proposed 15 per cent VAT rate, some 94 per cent or 1,888 persons said this figure was “too high”, with just 6 per cent considering it ‘about right’.

Asked what rate they would be willing to pay if VAT was brought in on July 1, the Select Enterprises research found that just 2.25 per cent of respondents would accept the 15 per cent. Not surprisingly, most interviewees (79 per cent) said they would prefer the lowest rate suggested by the surveyors, 5 per cent.