The Tribune

By Khrisna Russell

Deputy Chief Reporter

krussell@tribunemedia.net

DECLARING the Minnis administration’s 2019/2020 Budget a “break from the past”, Finance Minister K Peter Turnquest announced several new duty exemptions and rate reductions worth $28m in government revenue yesterday.

The deputy prime minister told the House of Assembly this presentation was proof that the government could budget properly and put an end to guessing games of how officials think revenue should be raised or speculation into how tax dollars should be spent. Mr Turnquest announced that household refrigerators and stoves along with an array of school supplies including pens, pencils, sharpeners, crayons and chart paper will be made duty free among other things.

While he did not announce any new tax categories or a value added tax increase, Mr Turnquest did reveal that government decided to make permanent the VAT zero rating on electricity bills and water bills. Moving forward, it will remain that customers with electricity bills $300 and lower will not incur VAT charges. The same will apply for those with water bills $50 or lower per billing cycle.

“We have set a new precedent for proper budgeting, in that we have now implemented monthly meetings with each government agency to go over their expenditure plans, and ensure that they remain in line with the ceilings set forth for the budget year, and that funds are utilised appropriately to advance the key policy initiatives and priorities of this government,” Mr Turnquest told the House as he wrapped up his more than three hour long budget presentation yesterday.

“Our in-year reporting also ensures that we remain transparent in the way in which we both acquire and use public funds, making us accountable to our citizens, as we should be.

“Our government has ushered in a new era of sound, transparent and responsible fiscal management, supplemented by a broad spectrum of critical and transformational structural reforms that will set a proper and stable foundation for sustained private sector-led economic growth and job creation. I firmly believe that our revamped model of governance will indeed give rise to a better future for all Bahamians.”

He also said: “This budget stands for a government that is a better partner to the Bahamian people. We are transforming our execution and service delivery so we can provide Bahamians with better results. We are refocusing our spending so we can provide Bahamians with better benefits. Not the type of benefits in the past that have increased the dependence of citizens on the government, but the type of benefits that allow Bahamians to be empowered and independent.”

The duty changes, Mr Turnquest said, are a part of the government’s effort to rebalance the tax burden between provision of goods and services and reduce the accompanying distortionary impacts.

The deputy prime minister said this represented the government making good its commitment to reduce duty and excise rates over the next three years.

The proposed tax relief measures are intended to provide reprieve to all citizens and to encourage economic activity by making the import of certain items relatively cheaper, the East Grand Bahama MP said.

As a result the government hopes to make it easier for persons to enter existing markets and in some cases, create new ones.

Mainly, the focus of these reductions is around educational supplies and equipment, and household implements and goods.

Items to be duty free include: home refrigerators of 18 cubic feet or smaller and home stoves 30 inches wide or smaller; pens, pencils, crayons, sharpeners, school rulers and chart paper and fire extinguishers.

Household furniture will also see a considerable duty reduction from 45 percent to 25 percent and pots and pans from 45 percent to 25 percent.

Additionally the duty on projectors and projector screens will be lessened from 45 percent to 35 percent.

Garbage can liners and flashlights will further be reduced from 45 percent to 25 percent.

Rates on radios also will be less at a rate of 35 percent from 45 percent.

The government also plans to remove the duty from musical instruments.

It will also allow trailers for commercial fishing boats to be eligible for duty exemption and will further amend the Spirits and Beer Manufacture Act to reduce the minimum bushel requirement for production, to now make microbreweries eligible for import duty concessions.

There also will be duty exemptions applied to new and hybrid vehicles.

These include reducing the duty on new vehicles between 1.5 litres and 2.0 litres valued at $50,000 or less from 65 percent to 45 percent.

He said in this context, only cars with less than 200 miles on the odometer will be considered ‘new’. This makes smaller more fuel-efficient vehicles more affordable, the finance minister said, adding there will be harmonisation of rates on all new electric and hybrid vehicles valued up to $50,000 to 10 percent.

This measure will have a sunset clause of five years, after which this special revision will revert closer to the rates for other small size vehicles.

And in anticipating the 2020 ban on single use plastics, the government proposes to increase the duty on biodegradable and compostable plastic shopping bags from five percent to 45 percent; but at the same time, reducing the duty on reusable cloth shopping bags from 30 percent to five percent.