EDITOR, The Tribune.
There are 15 countries in the world that deem it unnecessary to levy a progressive personal or corporate income tax.
Of these, four are Mediterranean and Caribbean colonies with populations under 100,000 and budgets funded entirely by the offshore financial services that dominate them; three are oceanic pacific micro states with no internal wealth to tax; and six are major oil exporters that fund their budgets entirely from petrodollar revenues. The other two (which share none of these features) are The Bahamas and Somalia.
Somalia has the excuse of being a failed state that lacks the infrastructure (and presumably the Kalashnikovs) to collect an income tax, even if it could achieve consensus on the issue among its various warlords.
The Bahamas’ excuse is that it is run by politicians so dimwitted that they believe that a tax system that makes poorer Bahamians pay the bills for wealthier Bahamians somehow attracts foreign investors (whose income is taxed in their home countries and would therefore not be affected by a Bahamian income tax).
At least, that is the pretext that FNM ministers use to justify the most regressive tax system in the western hemisphere. The most recent was Kwasi Thompson, who bravely drew a line in the sand on the issue of income tax when pressed on the issue of the 279 percent deficit increase that his government has allowed to accrue on the backs of Bahamians.
The reality, however, is that while the FNM’s funders clearly benefit from having their wealth subsidised by poor and middle class taxpayers, the country’s economy does not.
In fact, it is done immense harm, both in that local demand is dampened by high taxes on consumption and in that the resultant narrow revenue base stunts investments in education, infrastructure and all the other things that support a modern economy.
There is no more important issue facing The Bahamas today than the need to quickly replace our regressive, consumer-focused tax regime with one dominated by progressive taxes on high incomes and luxury properties. Everything else is a distraction that will only prolong and compound the harm endured by our society until it is addressed.
ANDREW ALLEN
Nassau,
February 19, 2021.
Comments
DWW 3 years, 2 months ago
So $1,800,0000,0000 is not enough money per year? you are saying they need more money? maybe cut the 50/50 ratio of public to private sector labour to a more reasonable 70/30 and we can see about how much revenue is actually really needed.
Proguing 3 years, 2 months ago
I have not read so much nonsense for a while. Do we really want to scare away rich foreigners and investors with all this income tax talk? The Bahamas has been a magnet for the rich for many years, do we really want to end this?
This is a good example that people pushing for income tax have no clue what they are talking about. Had Izmirlian been successful with Baha Mar (the largest foreign investment on New Providence island’s history), he would not be paying taxes in another country as claimed here, he is a resident of Lyford Cay and thus fall under the Bahamian tax regime. If we had income tax he would most likely have chosen another place for his residence.
The Bahamas was one of the few countries to have banking secrecy. We gave up this advantage and we are now on equal footing with other countries. The result is that most offshore banks have left this jurisdiction. Now you want us to give up one the last thing that makes the Bahamas attractive on the map? Do you really want this country to be the next Haiti?
The problems that we need to fix are:
Low compliance with tax collection
Over bloated civil service and government waste
Just as an example, the Bahamas has over a third of its work force employed in the public sector vs 12.9% in Germany and 13.3% in the USA. If you want the Bahamas to be like other developed countries, you should be pushing for major cuts in civil servants.
tribanon 3 years, 1 month ago
Forget tax reform. It would be ineffective and meaningless without first reforming our entire civil service system. Without comprehensive civil service reform more taxes would only translate to even more waste, fraud and corruption at all levels of government with lower income taxpayers being even bigger losers than they already are.
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