Deputy Prime Minister Peter Turnquest.
By Khrisna Russell
Deputy Chief Reporter
WITH the government’s 2019/2020 budget communication set for today, Finance Minister K Peter Turnquest moved to allay one fear, saying value added tax is not increasing.
The deputy prime minister blamed the opposition Progressive Liberal Party for what he called “scare mongering”, telling reporters the PLP should know better.
He spoke to the matter yesterday outside Cabinet as rumours swirled that the government was expected to announce a VAT hike in the budget communication.
“So, the government of The Bahamas has issued a three-year mid-term consolidation budget last year which outlines the plan generally speaking for the three year period up to 2021,” Mr Turnquest said yesterday. “In that budget document there is no indication that there would be an increase in value added tax.
“We explained to the Bahamian people very clearly that the plan that we put forth would be sufficient and would manage our situation through the end of that plan.
“We are very proud to say that we have been faithful to that plan.”
He added: “I take note of the unfortunate scaremongering that is being put out by the opposition, which I think is very irresponsible quite frankly and particularly from the sources that its coming from who know better or should know better.
“But be that as it may, I guess they do what they do because they have nothing else to talk about, but at the end of the day it is not anticipated to be any value added tax increase.
“I would only say to the Bahamian people to listen to reliable sources. The budget will be presented tomorrow (today) and I think that generally speaking we’ll be pleased with the report and what is being anticipated for the coming year.”
Following last year’s VAT hike, the government was forced to defend the move.
It led 2,000 people to sign an online petition in opposition and some organisations planned to mark their anger during the approaching 2018 Labour Day marches.
At the time Mr Turnquest said: “We did not settle on that (12 percent) rate arbitrarily.
“We fought about this. We ran models, looking at what would happen if we took the rate to nine percent or ten percent and ultimately we decided on the 12 percent rate because it gave us the best opportunity to get through this period of consolidation as quickly as possible and begin to reduce the pain on the Bahamian people.”
He also said the tax increase was needed to pay off arrears as part of the government’s three year fiscal consolidation plan.