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'Increase Minimum Wage Before Vat'

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K Peter Turnquest

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

FNM Shadow minister for Finance Peter Turnquest yesterday said it was critical for the government to address minimum wage concerns before the implementation of Value Added Tax (VAT).

Mr Turnquest also renewed concerns over the government’s haste to implement the new tax in comparison to other jurisdictions, adding that attempts to “do a million things all at once” was a recipe for disaster.

“It’s critical,” he said. “You don’t want people in the hole per se and then have to figure out how to get them out. We need to have all of these conversations before VAT is implemented.”

“As we look at the increase in cost of living as a result of this VAT, and all of the taxes that this government has put on the Bahamian people, we have to consider whether we are putting ordinary Bahamians at a disadvantage in terms of falling below that poverty line.”

National statistics released in June revealed that 12.8 per cent of the population are living in poverty, with a 3.5 per cent hike in the annual poverty line since the last recorded study in 2001, from $2,863 to $4,247.

The annual minimum wage for public servants increased from $10,700 to $11,500 in July with the promise to renegotiate further increases if the government generates greater revenue from natural resources.

However, the wage minimum for the private sector remains at $150 weekly/$4 per hour – an estimated $7,800 annually.

Labour Director Robert Farquharson told The Tribune last month that he was optimistic that there would be an increase in the private sector minimum wage.

Mr Farquharson said private sector consultation was on track to present recommendations to Labour Minister Shane Gibson for deliberation in Cabinet before the end of the year.

He added that while he could not speak for stakeholders, the initial research phase of the consultation process was moving forward amicably.

His comments came days after Bahamas Chamber of Commerce and Employers Confederation chairman Robert Myers renewed concerns over the dangers of a minimum wage increase.

Mr Myers warned that it was “dangerous” for the Christie administration to promise a minimum wage increase without any empirical data to assess the consequences, especially given that business operating costs in the Bahamas were already too high.

The government plans to implement VAT at a rate of 7.5 per cent on January 1.

This weekend, the Ministry of Finance released updated guidelines on the new tax and transitional arrangements.

Mr Turnquest said: “I’m understanding that the VAT implementation team and the department is still in the process of being set up that they have not gotten all of the organisation in place yet or the people in place yet. We’re trying to do a million things all at once, it’s a recipe for disaster. Hopefully, we’ll get it together but in my mind it’s a little quick.”

“If you go back to the experience of all of the other countries that have implemented VAT, there was almost two to three years between the time that they passed the legislation and actually did the implementation. We’re trying to do it in less than four months, that is incredibly ambitious.”

He said: “I don’t believe that we have done enough study and analysis of the economy to be able to determine whether in fact we need to look at things like wage adjustments and if we’re going to give social service, what level of social services need to be done and how we’re going to do it. “

Mr Turnquest noted that the Free National Movement has not held a caucus meeting on the issue of minimum wage; however, he said that the party’s position was in support of Bahamian workers.

He said: “We know that there is a basic wage that is necessary in order to meet your basic needs, it is something that certainly has to be considered in this new economy.

“We support the right for every Bahamian to make a decent, honest wage that allows them to meet their basic commitments.”

Comments

The_Oracle 4 years, 9 months ago

Great way to accelerate the downward economic spiral K.Peter, bad enough for the private sector to get hit with a 10% increase in the cost of doing business, along with the entire population getting the hit also, lets just implement the U.S. Fast food worker principal at the same time! Ever heard of rampant inflation? Think man, Think!

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Well_mudda_take_sic 4 years, 9 months ago

He can't think because he has too much fat on his head like Christie, Wilchcombe and most other bloated politicians today!

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The_Messenger 4 years, 9 months ago

Once January 1st rolls around Bahamians might have enough money to purchase crazy overpriced VAT goods which are already way overpriced presently. However this might be only possible for a select few because businesses will cut hours back with a minimum wage hike and they will certainly cut jobs outright because of VAT.

The Bahamas needs VAT, right?

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B_I_D___ 4 years, 9 months ago

We are already downsizing and trimming the fat so to speak.

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The_Oracle 4 years, 9 months ago

Over priced because the Government already makes more money from businesses than the owners do via 35% average duty on imports including Freight, and business license tax. Skimmed right off the top, and on gross for the Business license. Funny how everyone (with government encouragement I might add ) wants to demonize businesses, but do we want to depend on Government to feed us all? Cause that is what the private sector currently does, and always has. Without the private sector in a country it looks like North Korea, or worse. So, lets all bash and trash the sector that has provided everything we have, including the handouts from Government, via cronyism, Social services and padded contracts which are derived by TAXING the productive. And they now want more! What we really need is a private sector week off, as a national holiday. Remind Government who really owns and operates the GDP that they borrow against and tout as their own. Ever heard of capital flight? It is happening right now in this country.

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themessenger 4 years, 9 months ago

Exactly Oracle, but then how many people in this country can do simple maths, for that matter how many of them pay business license or have ever had to make payroll every week while being constantly raped by government, BEC and ,in many instances, their employees. God must love stupid people, He made so many...................

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Clamshell 4 years, 9 months ago

" ... with a 3.5 per cent hike in the annual poverty line since the last recorded study in 2001, from $2,863 to $4,247."

3.5% hike? Can anybody on this newspaper do simple math? That's more like a 50% hike. Please put away your cell phone and pay attention to what you're doing.

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Publius 4 years, 9 months ago

A right-thinking person can only shake one's head at this story. Some politicians simply want tot be heard and have headlines, even if what they are saying is illogical.

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gfxafinx 4 years, 9 months ago

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