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$699m Vat Collection Lower Than Expected

Deputy Prime Minister and Minister of Finance K Peter Turnquest.

Deputy Prime Minister and Minister of Finance K Peter Turnquest.

By Khrisna Russell

Deputy Chief Reporter

krussell@tribunemedia.net

THE Minnis administration collected $699.3m in value added tax in the 2018/2019 fiscal year, a 21.5 percent increase over the previous fiscal year, according to Deputy Prime Minister K Peter Turnquest yesterday.

This is in addition to the $1.9bn government secured in revenue.

However, he said officials expect VAT receipts to come in lower than expected due to a time delay in payments at the new rate versus the old rate because of the concessions granted to hotels and the construction sector.

Nonetheless the minister of finance said government was confident that revenue performance in the last two months of the 2018/19 fiscal year will be in line with current projections.

He made the comments while defending the government’s new duty exemptions on certain school supplies, apartment-sized stoves, refrigerators and furniture. Musical instruments are also now duty-free.

It was the government’s intention to ensure that the Bahamian people were able to feel the impact of fiscal policy decisions in a tangible way, Mr Turnquest said, adding the budget was “inspirational, imaginative and aspirational”.

“That is why we have attempted to provide a number of tax relief measures in this budget that should be felt by all,” Mr Turnquest told parliamentarians yesterday.

“We took a deep look at the most frequently imported items based on data we received from the Customs Department. From that list, we identified the items that were most relatable to the average household in The Bahamas, and tailored our working list to include school supplies and household implements.

“Now, apartment-sized fridges and stoves are duty-free for the Bahamian people. That young couple or that young millennial going out on their own for the first time is now able to set themselves up without being killed with a high customs bill. Parents and teachers can now stock up on school supplies for students for a lower price due to the duty reductions, and in some cases removal.”

He continued: “The National Youth Band, the Bahamas All-Star Band, and every other orchestra or band assembled in the Bahamas can now expand their members as instruments are now cheaper to purchase.”

He said a child who has always wanted to learn to play the trumpet may now be able to afford to purchase one.

The minister also sought to clear up the government’s strategy when it came to allocations for various ministries.

Among these was the budget for the Department of Social Services.

“It is worth explaining the allocations in the budget to support our social safety net, as some in the opposition and in the media have misrepresented the numbers, particularly those concerning line item 2721001 under social assistance benefits.

“Beginning in fiscal year 2014/15, the PLP spent approximately $4m on the Renewable, Inspiring, Sustaining, Empowering (or RISE) social safety net reform project, which was started under an IDB loan facility in 2012. However, due to the fact that the former government could not meet the deliverables of the facility, the programme was unceremoniously stopped in August 2017.

“This administration, however, saw the value in the programme — which was centred on alleviating poverty in The Bahamas by changing behaviour to bring about improvements in education and health, of those in the lower income class.

“To this end, we took away some of the positive lessons from the RISE programme and integrated them into our core service offerings, so that those that would have been assisted by the programme initially, would not lose their net benefit.

“To do this, we allocated $1m in 2018/19 toward the services of the old programme. However, we found that those services did not require that level of funding, as only $75,760 was spent as at March of 2019.

“So, despite the allocation for 2019/20 being much lower than the $1m that was budgeted in 2018/19, the $488,951 actually represents — one, the closing out of the social safety net programme and two, proper budgeting to fit the needs of a particular programme.”

He also said: “I would note also that allocating just under $500,000 allows us room to expand the services currently offered under this line item, which will help to further alleviate poverty in the Bahamas. Moreover, although the Department of Social Services had a 1.7 percent decrease overall, in line with the general practice of more precise budgeting, we increased the budget allocation significantly in the most important areas.

“Specifically, the overall social assistance benefits allocation by $1.6m in the upcoming budget year. It is important to repeat this: The allocation overall for social assistance benefits will increase by $1.6m in the upcoming budget year.

“We also increased our allocation for the Food Assistance Programme by $1.4m to $14.2m and our Subsistence/Support of Persons Contract by $0.3m to $2.6m this year,” he added.

Comments

TalRussell 2 weeks, 4 days ago

Ma Comrades, use your imaginary picture had PLP's dynamic finance minister minister said... Sadly, your government's Vat collection raked out pockets populaces was near Billion Dollars lower than our beloved PM Perry expected rake in, yes, no....... Couldn't make this up how a financially strapped populaces shortchanged Imperialists red shirts out near Billion Dollars ...........

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birdiestrachan 2 weeks, 4 days ago

Good for all of those FNM fellows who said VAT was wrong and then increased it on poor people to 60% Masterful liars that they all are.

In some cases people do not have the money to spend and others are only buying what is absolutely necessary.

This FNM Government does not care about poor people, The new car dealers and the rich at Lyford Cay. when they speak the "Fat one" jumps.

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birdiestrachan 2 weeks, 4 days ago

To begin with no one can believe anything that comes out of this man's mouth

Inspiration Imaginative and aspirational, he is telling lies again or maybe he has lost his mind.

small fridges, small stoves but no washing machines. pencils and crayons' They should all hang their heads in shame.

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Well_mudda_take_sic 2 weeks, 4 days ago

Turnquest just doesn't have a clue....yep, he's one of those truly clueless bean-counters.

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TalRussell 2 weeks, 4 days ago

Nevertheless, Comrade Minister KP. needs do a switcharoo of ministerial profiles with "flight delayed" Dionisio James, where it seems be enormous confusion amongst ground crew with 10 out 100 flights - if the damn plane has even started lower its altitude wheels begin airport approach decent in preparation a done overdue landing by 30 minutes flight, yes, no couldn't hurt if new aviation minister KP was introduce learn how to play the bullshit trumpet to national airlines ground crew...............

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ThisIsOurs 2 weeks, 3 days ago

Wait, the trumpet lessons just so or they to announce arrival of the airplane?

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