The Tribune

By KHRISNA VIRGIL

Deputy Chief Reporter

kvirgil@tribunemedia.net

DESPITE Prime Minister Perry Christie’s previous suggestion that the government may need to “tax some item” to accumulate funds for the country’s Hurricane Matthew recovery and repair, he yesterday back-pedalled from this position insisting that the current tax system is sufficient to raise the money needed for the efforts.

Mr Christie was adamant, as he spoke in the House of Assembly, that the Ministry of Finance knew this prior to Matthew’s arrival as external experts presented the information as part of a specially commissioned study.

The Christie administration has been subjected to a wave of criticism over the prime minister’s comments on Monday that the country needed to give serious consideration to a more effective way of financing its losses. During that interview he said it might have been time to consider a “selective approach” to accrue the money by “taxing some item that would be of minimal impact on people”.

However, when he stood in Parliament for the first time since Matthew pummeled New Providence, Grand Bahama and Andros, Mr Christie suggested that his comments on Monday were the result of an off-record conversation with reporters.

The nation’s leader asserted that it was “natural” to ask a question to invoke debate as to how the government would tackle debt caused by natural disasters.

He seemed bothered by the media’s decision to publicise the comments, which have incited outrage among Bahamians who mainly voiced their sentiments on social media site Facebook.

Mr Christie said: “We were given the assurance of the technical staff of the Ministry of Finance that the funding to service this debt can be derived from the existing tax system in a policy neutral manner.  That is no change in the existing rates.”

 “This assurance was done by way of a study on behalf of the ministry by external experts (and) the study was commissioned and presented to the ministry prior to the arrival of Hurricane Matthew.

 “The key finding of the study is that with a more structured compliance programme, the revenue base could grow by 10 per cent in the short term and up to 20 per cent in the medium term,” the prime minister continued.

“The study indicated that with the investments made by this administration in information technology to support tax collection efforts that this was not only doable, but it was achievable.

“My government decided to engage in a study that would put it in a position not to panic over an issue of this kind but to sit in the Cabinet, like we did yesterday and have the Ministry of Finance speak to us about the options available to us and to be able to say before we go any further let us collect the money that is available to be collected. Let us take special efforts to go out there and do it as the study indicates before we go any further and talk about anything because we know the extent to which people are suffering, it doesn’t arise.”

On Tuesday high-level government sources told The Tribune that Cabinet discussed the possibility of a sin tax on tobacco and alcohol to raise the necessary funding.

However, this idea was rejected by the majority of Cabinet ministers who believe that to raise money, the Christie administration should consider avenues that free Bahamians from additional taxation, The Tribune was told.

Among these is the suggestion of a cruise ship passenger tax, which would ensure local taxpayers are not subject to further tariffs, the source explained to this newspaper. Cabinet has not made a final determination on the issue, The Tribune was told.

The idea of a new hurricane tax was welcomed by staunch Progressive Liberal Party members who praised the prime minister for advancing a suggestion that could be the country’s solution to recovering from the devastation caused by Matthew.

Among these was PLP Chairman Bradley Roberts. He was adamant that a “temporary tax” was the key to the dilemma the government now faces.

Former PLP Cabinet minister George Smith also welcomed Mr Christie’s special tax suggestion, but said he would go further to suggest that the government insure all of its buildings and spaces so that in the event of a natural disaster, there would be no disruption of the budget cycle.