By NATARIO McKENZIE
Tribune Business Reporter
Preliminary results show that, up until June, the government collected $150 million in new net revenue from VAT, State Finance Minister Michael Halkitis said yesterday.
Mr Halkitis said that there is still “considerable room for optimism” over this nation’s economic outlook, noting that this administration must maintain fiscal discipline to bring the Government’s fiscal position in line with acceptable standards.
While addressing the Association of International Bank and Trust Companies (AIBT) 2015 Nassau Conference, Mr Halkitis said that it is critical for the Government to adhere to its medium term fiscal consolidation plan which it embarked on in 2013. This, he said, has resulted in the annual deficit being reduced from 5.8 per cent of GDP in 2013/2014 to 2.2 per cent of GDP in 2014/2015.
“We project that the debt to GDP ratio has peaked at just under six per cent in 2014 and will commence a downward trek beginning in this budget year,” said Mr Halkitis. “A major point of concern among the financial community, and I’m sure throughout The Bahamas, has been the recent ratings action by Standard and Poor’s followed by Moody’s and in between was a report by Frist Caribbean. The recent action by Standard and Poor’s while addressing and stressing the issue of Baha Mar and the threat that its protracted legal battle presents to economic growth, it did acknowledge the success of the Government fiscal consolidation programme.”
He added: “The Government has made progress improving the country’s fiscal deficits particularly through the introduction of the value added tax in January 2015,” said Mr Halkitis, noting that from January to June the Government has collected approximately $150 million in new net revenue from the tax.
“There are some difficult challenges on the horizon and some we are trying to deal with now, but even with these challenges I believe that there is still considerable room for optimism given the prospects for growth in the economies of the developed world – particularly of the United States – and the success that we have enjoyed so far in terms of fiscal consolidation.
“The key, however, is that we have to as an administration maintain the fiscal fiscal discipline that will bring the government’s fiscal position in line with acceptable and sustainable levels,” said Mr Halkitis.
Mr Halkitis went on to note that The Bahamas has ranked 97th out of 189 countries in the World Bank’s Ease of Doing Business Report, down one spot from the previous year. Mr Halkitis said that the rating is unacceptable particularly given the recurring nature of complaints on the ease of doing business in this nation.
“People look at these reports from abroad see our low ranking and make investment decisions,” he said.