By NEIL HARTNELL
Tribune Business Editor
The Government yesterday said it is hoping to further "accelerate" improved GDP growth forecasts, while bidding to clean up "vexing issues" stemming from a tax disputes backlog.
K P Turnquest, the deputy prime minister, told Tribune Business that the Minnis administration took encouragement from the International Monetary Fund's (IMF) upward revisions to the Bahamas' predicted 2017 and 2018 economic output.
The Fund, in its October World Economic Outlook, projected that the Bahamas' real GDP growth will hit 1.8 per cent and 2.5 per cent in 2017 and 2018, respectively. Those figures are improvements upon the 1.4 per cent and 2.2 per cent forecast in April, differences that - based upon a $10.2 billion GDP - represent around a $40 million and $30 million increase in economic output, respectively.
Mr Turnquest, though, acknowledged that it remained "absolutely critical" for the Bahamas to address structural economic bottlenecks - and remove impediments to the 'ease of doing business' - if it was to realise improved GDP growth and employment.
He revealed that Bahamian businesses, and the closing of commercial transactions, had been delayed by a backlog of unresolved tax disputes that he accused the former Christie administration of failing to address.
"We've inherited some serious legacy issues that have been dragging on for quite some months," Mr Turnquest told Tribune Business. "Whether we're looking at real property tax, Stamp Duty, we're trying to address these legacy issues so we can close out transactions and people can get on with doing business and settle their affairs, whatever the issues may be."
The Deputy Prime Minister added that Value-Added Tax (VAT), as well as real property tax and Stamp Duties, were the three main revenue streams impacted by long-standing queries and disputes shunted aside by the previous administration.
Declining to give figures for the amount of potential tax revenues impacted, or how many cases there were, Mr Turnquest said: "I wouldn't want to hazard a guess, but there's some vexing issues.
"Ask the lawyers; they'll tell you," he told this newspaper. "It's whose tax exempt, what value of Stamp Duty rates are applicable. Some are very complicated because they were pushed to the side, but they need to be dealt with.
"We know there are taxpayers that want to pay their tax bill but are unable to do so because they are unable to get a clear answer as to the amount they owe. There are also situations where there are disputes as to the method of taxation, and the amount of tax due."
Mr Turnquest, who is also minister of finance, added: "We're trying to get it all sorted out, and get all the complicated issues on the table and resolved in a collaborative manner.
"To the extent we can't, we want to push them on to the appeals process as quickly as possible so that taxpayers feel they are getting a fair hearing and can satisfy whatever obligations they may have.
"I know of situations where it has held up business and held up transactions, so it's important."
Bahamian businesses have previously complained that the VAT appeals process, in particular, is ill-defined and not properly structured, and that various rules and decisions have not been forthcoming from the Government and its tax authorities.
However, Mr Turnquest said the Government took some comfort from the IMF's revised GDP growth projections, suggesting these largely reflected the $4.2 billion Baha Mar project's ramp up and the Phase II start at The Pointe, together with some investment projects scheduled for the Family Islands.
"That's certainly positive news, and we're working very hard to sustain that growth improvement and, hopefully, accelerate it," the Deputy Prime Minister told Tribune Business.
To maintain the momentum, Mr Turnquest said the Government was "working very diligently" to provide financing and contract opportunities for small and medium-sized businesses and Bahamian entrepreneurs.
Training and mentorship also forms part of this effort, and he added: "We are identifying opportunities for entrepreneurs getting into business for themselves."
Conceding that improvements to the 'ease of doing business' were still "absolutely critical" for the Bahamas' economic prospects, Mr Turnquest told Tribune Business: "We recognise this has been a source of frustration for both foreign and domestic investors.
"We recognise we have fallen in those rankings into the bottom third in the world. Everyone understands at the Ministry, and the Government understands, the importance of fixing the system we have inherited to ensure there is a more timely response to issues that arise.
"We are being as proactive as we can be."