Wealthy Bahamians greatest tax cheats

As of Friday, May 31, 2019

DEPUTY Prime Minister Peter Turnquest.

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

“High-end” Bahamians and companies are the biggest tax dodgers, the deputy prime minister revealed yesterday, adding: “Poor people pay their taxes.”

K Peter Turnquest, speaking at a post-budget briefing, said it was those who can afford to pay but choose not to that present the greatest compliance challenge for the government as it moves to enforce all tax laws.

Emphasising that the government was not seeking to be “punitive”, or engage in a “gotcha exercise”, as it pursues all revenue due to it, Mr Turnquest warned: “We do intend to collect the government’s revenue. For a number of reasons we have been relatively lax, and in some instances slack, in the enforcement of tax laws.

“That has had its effect. Each of us as citizens have an obligation to pay our fair share. We do not have a progressive tax system, and so that requires that those of us who have an obligation - and particularly those of us who have more - should pay.

“You would be surprised to find the class who don’t pay their taxes,” he continued. “It’s not the poor people; poor people pay their taxes. It’s normally the high-end people who can traditionally afford it that don’t pay.

“We are willing to enforce the laws on the books. This is not a punitive exercise. It’s not a gotcha exercise. It’s very much a partnership where the Government does its part and the citizens do their part, and together we get positive results from each of us following the rules.”

Mr Turnquest said the Government is still paying down its $360m in unfunded arrears inherited from past administrations. “We are unfortunately still paying bills. In last year’s budget we indicated that there was roughly $360m of arrears we had committed to address over the next three years,” he added.

“We had budgeted $172m for this current fiscal year, and we have addressed $129m of that to-date. We will see where we get to at the end of the year. In the upcoming year we have budgeted another $100m. In the next year we will address the balance.

“The idea is over the next three-year period we will liquidate all of those arrears. The idea is that that will be money that is freed up for us to give back to the Bahamian people in the way of further duty reductions, in the way of new programmes to stimulate economic activity, build infrastructure and to provide the social support that we need.”

Addressing concerns over the Government’s ability to meet revenue projections, Mr Turnquest said: “One of the things that I think is fundamental is that GDP growth and projections are exactly that; projections. It’s very difficult to pinpoint a number.

“We make these projections based on factors we are aware of in our global economy, that are happening in our marketplace, in our major sectors of our economy, and based on plans and investments we are aware of. Any number of factors can affect and slow down that growth profile.

“GDP growth is a factor of a number of things. It’s not only internal economic factors but also external economic factors, and they all play a role. The main thing, though, is to look at that bottom line and, this year, when you look at that deficit number coming in at our target, which means that we are doing a fair job in managing the fiscal affairs of this country.”

Marlon Johnson, the Ministry of Finance’s acting financial secretary, said: “The job of fiscal management is managing the deficit. The budgetary revenue projections are just that; they’re just revenue projections. When you look historically, very few countries hit their revenue targets because there are so many factors involved.

“What all governments have a responsibility for is managing the deficit; your balance, your surplus. Part of the work we have been doing is managing the explosion in expenditure growth. That is what you can manage within the year. Ultimately, what is important is that you meet your fiscal goals with respect to your deficit targets, your debt targets and the like. That really is the determinant of fiscal stability and fiscal success.”

Mr Turnquest had confirmed that revenues for the 2018-2019 fiscal year are now projected to come in some $238m, or 9 percent, lower than budgeted at $2.413bn due to the areas that the Government now hopes will drive its income in the upcoming fiscal year.

He said during the Budget statement: “All told, we project that the remaining two months of the fiscal year will perform positively. For the fiscal year as a whole, revenue is estimated to come in at about $2.4bn, some $238 million or nine percent lower than what was budgeted at the start of the fiscal year, largely on account of the new agreement with the gaming operators, the delayed implementation of the Revenue Enhancement Unit (REU), and the concessions granted to hotels and contractors in respect of the introduction of the higher rate of VAT.

Addressing the issue of over-budgeting for civil service salaries and benefits, Mr Turnquest said yesterday: “This is an ongoing exercise for us. What we found is that the budgeting system we inherited is very inefficient. It has not been very scientific. As we go through line items comparing actual expenditure and the known commitments, we adjust the allocations accordingly.

“Whatever savings are derived are either eliminated or reallocated. At the end of the day, the important thing to note is that there is no head count out, and it does not stop ministries and agencies from hiring the talent they need in order to ensure they are efficient.”

B_I_D___ 4 years, 10 months ago

Come at me with every law in your book, see what you find...we pay EVERY damn penny of taxes owed, business licenses, duties, property taxes, road traffic fees, insurance, you name it we pay it. It's the fella on the corner smuggling crap in and falsifying invoices you need to be watching out for, driving unlicensed/uninsured vehicles, operating businesses without business licenses, or operating above the VAT threshold and not registering for VAT. Talking SH!T.

Well_mudda_take_sic 4 years, 10 months ago

But there will be no naming and shaming of the wealthy tax cheats because the political elite, including some of our most senior elected officials, and their cronies, are chief among some of the biggest tax cheats in our country today.

alfalfa 4 years, 10 months ago

So. The government knows who the dodgers and culprits are, but takes no legal action??? How convenient. One has to wonder why.

bogart 4 years, 10 months ago

WEEEEEEEELLLLLLL.........MONKEY....UNCLE......!!!!!!!!.........GIVE DAT MAN A NATIONAL AWARD...ON EPIPHANY....DAT WEALTHY BAHAMIANS GREATEST TAX CHEATS..."Pore people pay their taxes"... Sometimes but only there is a nano second a glimmer of the entire situation.......but ......then again he slides right back wid the echelons, wealthy people, beautiful people, hoity toity, elites, airplane owners, helicopter owners, brand new new car owners, ......wealthy ...engineered REGRESSIVE TAXES......BENEFITTING...ENRICHING MORE..........WEALTHY TAX CHEATS........enables then to afford more ....an more.........an pore peoples cupboards well known for years pore people cupboards empty.....more beggars on streets....1 in 7 Bahamians dont know where next meal coming from....an vagrant used to be on bench on sidewalk SHIRLET ST....seems bench got removed from pavement.....

DDK 4 years, 10 months ago

Maybe we should give the DPM a LITTLE credit for effort...........

bogart 4 years, 10 months ago

...You see dat too...hey..!!

TalRussell 4 years, 10 months ago

Ma Comrade, is Colony of Out Islands a.k.a 'Bəˈhɑːməz's' KP, deserving of a little credit for crumbling seconds after threatening protest march to and around PeoplesHouse by Lyford Cay property owners, or just the Numbers Man's. yes, no...... always threatening lift even more out pockets comrade common man's and woman's, yes, true.......just another attempt at justifying why families loved-ones must pay new government fee $700 get the deceased's body released out PMH's morgue, yes, true.....

birdiestrachan 4 years, 10 months ago

Turnquest and the FNM Government give huge tax breaks to the rich, reported in this newspaper one billion or more? did doc give the cruise Port in Eleuthera a 25 year business license free.

So what is he talking about, when he knows that the poor people know this FNM government does not care about poor people,

BONEFISH 4 years, 10 months ago

This is the man who disbanded the revenue enhancement unit.He said it was ineffective.Moody's the debt rating agency made note how that quote and quote ineffective unit collected some ninety million dollars in tax revenue from tax cheats during a six month period.I learn that from an article written by The Tribune business editor Hartnell. Now he realize what they were doing a year later.But he will survive in the Bahamas,like some one said to me,Bahamians don't understand much and have short memories

sheeprunner12 4 years, 10 months ago

If KPT wants to help the poor ............ bring in INCOME TAX ........ Those who earn over 30G pay 10% .......... over 50G pay 20% ......... over 70G pay 30% ...... over 100G pay 40%. Then there will be no hollering and crying about the rich not paying their share ..... The millionaires will find something else to complain about again.

ThisIsOurs 4 years, 10 months ago

100k is "barely made it" status in this country and it would be economy crippling to tax that level at 40%. People at 250k should just be approaching 20- 25%. Can you imagine having a spouse, aging parents, 2 kids, a mortgage and then having 40,000 taken out of your 100k salary?

I have ZERO confidence that any increase in govt revenue will lead to anything good. They collected 1 billion in VAT, MORE than they ever expected and they threw it away handing to slush contracts like 16 million dollars to move garbage.

On top of that prices will continue to rise. The entire country will start clamouring for higher salaries because of the burdensome taxes. Business will raise prices to Account for wage increases. It's not a simple exercise and based on the pie in the sky 60% increase in VAT expectations, I don't know if finance has the analytical resources to implement an effective taxation system. They'll just look at numbers in excel and revel in how much they'll collect.

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