The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Democratic National Alliance’s (DNA) leader yesterday warned the Government not to “dig yourself out of the hole” left by Hurricane Matthew through further taxing Bahamians, adding: “We cannot afford it.”

Branville McCartney told Tribune Business that the Christie administration was already “taxing us out of business” through Value-Added Tax (VAT) and other impositions prior to its proposed ‘hurricane tax’ to finance relief efforts.

He argued that the Government “cannot be trusted” to devise, and implement, further taxes given its lack of accountability and transparency over what the $600 million in gross VAT revenues had been used for.

“You cannot, at the end of the day, dig yourself out of a hole by taxing the Bahamian people. It will not work,” Mr McCartney said of the proposal, floated by Prime Minister Perry Christie, to finance post-Matthew restoration via new or increased taxes.

“I think the public reaction will tell him, going back to VAT, that this hurricane tax is something that we cannot afford as a people at this stage. We cannot afford it.”

Mr Christie, in suggesting that new or increased taxes might be needed to finance the multi-million dollar repair bill left in Matthew’s wake, pledged that any such move would have “minimal impact on people”.

He also hinted that such a move would be temporary, but the idea has already run into significant opposition from the Chamber of Commerce and the private sector, which have warned it would impede economic recovery and deter still-closed businesses from ever opening again.

The Chamber also warned that a ‘taxation solution’ would hurt most those it intends to benefit, namely those Bahamians still struggling to rebuild their lives, and repair wind and water damaged homes.

Tribune Business sources said the ‘hurricane tax’ proposal was discussed “briefly” by the Cabinet yesterday, but no decision was taken and further discussions have to take place.

It is thought that not all Cabinet Ministers would be comfortable with such a move, although one idea being ‘floated’ was a so-called ‘sin tax’ on products such as alcohol and cigarettes. This has also been mooted as a means to finance the planned National Health Insurance (NHI) scheme.

Mr McCartney, meanwhile, said the Government’s “lack of accountability and transparency” over how it was using the VAT monies meant it could not be trusted to implement any new or increased taxes.

Expressing “fear” that the Government could use Matthew’s aftermath to increase VAT’s existing 7.5 per cent rate, the DNA leader added: “The fact we have a government who has not been accountable and transparent in their dealings with VAT to-date is reason enough not to have this imposition.

“This government cannot be trusted to put more taxes on the backs of the people in this country. No answers have been given to the country as to what happened to the $600 million collected from VAT [for the first 11 months of 2015-2016].

“They are taxing us out of business, and taxing us out of being able to run this country efficiently. The drop in business since VAT was implemented two years ago is tremendous. Businesses have closed because of it, and others that were doing well are struggling.”

Mr McCartney said the Government’s desperate search for financing post-Matthew, with both revenue and borrowing solutions being mulled, showed it had “failed to learn the lessons” from Hurricane Joaquin when it came to getting the Bahamas ready to withstand disasters from a financial perspective.

And he cited Bahamas Junkanoo Carnival, on which the Government has spent close to $20 million in taxpayer monies over the past two years, as an example of its “fiscal irresponsibility and negligence”.

Mr McCartney said the DNA was due to imminently release its “five steps” proposal for how it would deal with hurricane preparedness and relief efforts, and their financing.

“We live in a hurricane zone, and anticipate this will not be the last in our lifetime,” he added of Matthew. “All of this falls on governments, past and present, for not preparing our country for these types of catastrophes, these types of disasters.

“It goes back to not being prepared, having a Third World mindset. It goes back to the fact that we are always reactive.”

Warning of impending doom, Mr MrCartney told Tribune Business: “I pray to God that we are not having a conversation in a couple of years as to the devaluation of our dollar because of the short sighted way the Government is dealing with our economy, and the lack of accountability and transparency.”