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Prime Minister backs away from hurricane tax plan

Prime Minister Perry Christie flanked by Michael Halkitis, Minister of State in the Ministry of Finance, left, and Kenred Dorsett, Minister of the Environment and Housing, during their walkabout to view damage in the southern parts of the island on Monday. Photo: Shawn Hanna/Tribune staff

Prime Minister Perry Christie flanked by Michael Halkitis, Minister of State in the Ministry of Finance, left, and Kenred Dorsett, Minister of the Environment and Housing, during their walkabout to view damage in the southern parts of the island on Monday. Photo: Shawn Hanna/Tribune staff

By KHRISNA VIRGIL

Deputy Chief Reporter

kvirgil@tribunemedia.net

DESPITE Prime Minister Perry Christie’s previous suggestion that the government may need to “tax some item” to accumulate funds for the country’s Hurricane Matthew recovery and repair, he yesterday back-pedalled from this position insisting that the current tax system is sufficient to raise the money needed for the efforts.

Mr Christie was adamant, as he spoke in the House of Assembly, that the Ministry of Finance knew this prior to Matthew’s arrival as external experts presented the information as part of a specially commissioned study.

The Christie administration has been subjected to a wave of criticism over the prime minister’s comments on Monday that the country needed to give serious consideration to a more effective way of financing its losses. During that interview he said it might have been time to consider a “selective approach” to accrue the money by “taxing some item that would be of minimal impact on people”.

However, when he stood in Parliament for the first time since Matthew pummeled New Providence, Grand Bahama and Andros, Mr Christie suggested that his comments on Monday were the result of an off-record conversation with reporters.

The nation’s leader asserted that it was “natural” to ask a question to invoke debate as to how the government would tackle debt caused by natural disasters.

He seemed bothered by the media’s decision to publicise the comments, which have incited outrage among Bahamians who mainly voiced their sentiments on social media site Facebook.

Mr Christie said: “We were given the assurance of the technical staff of the Ministry of Finance that the funding to service this debt can be derived from the existing tax system in a policy neutral manner.  That is no change in the existing rates.”

 “This assurance was done by way of a study on behalf of the ministry by external experts (and) the study was commissioned and presented to the ministry prior to the arrival of Hurricane Matthew.

 “The key finding of the study is that with a more structured compliance programme, the revenue base could grow by 10 per cent in the short term and up to 20 per cent in the medium term,” the prime minister continued.

“The study indicated that with the investments made by this administration in information technology to support tax collection efforts that this was not only doable, but it was achievable.

“My government decided to engage in a study that would put it in a position not to panic over an issue of this kind but to sit in the Cabinet, like we did yesterday and have the Ministry of Finance speak to us about the options available to us and to be able to say before we go any further let us collect the money that is available to be collected. Let us take special efforts to go out there and do it as the study indicates before we go any further and talk about anything because we know the extent to which people are suffering, it doesn’t arise.”

On Tuesday high-level government sources told The Tribune that Cabinet discussed the possibility of a sin tax on tobacco and alcohol to raise the necessary funding.

However, this idea was rejected by the majority of Cabinet ministers who believe that to raise money, the Christie administration should consider avenues that free Bahamians from additional taxation, The Tribune was told.

Among these is the suggestion of a cruise ship passenger tax, which would ensure local taxpayers are not subject to further tariffs, the source explained to this newspaper. Cabinet has not made a final determination on the issue, The Tribune was told.

The idea of a new hurricane tax was welcomed by staunch Progressive Liberal Party members who praised the prime minister for advancing a suggestion that could be the country’s solution to recovering from the devastation caused by Matthew.

Among these was PLP Chairman Bradley Roberts. He was adamant that a “temporary tax” was the key to the dilemma the government now faces.

Former PLP Cabinet minister George Smith also welcomed Mr Christie’s special tax suggestion, but said he would go further to suggest that the government insure all of its buildings and spaces so that in the event of a natural disaster, there would be no disruption of the budget cycle.

Comments

MassExodus 7 years, 9 months ago

About time he back pedaled from one of his idiotic suggestions.

Well_mudda_take_sic 7 years, 9 months ago

Bahamians are total fools if they buy into the The Tribunes headline for the above article which reads: "Prime Minister Backs Away From Hurricane Tax Plan."

For decades now the Bahamas has been amassing what has become an unsustainable level of national debt .......... more than half of the funds borrowed by successive corrupt governments led by Crooked Christie and equally crooked Ingraham have been squandered through waste, fraud, corruption or outright theft. THERE IS ONLY ONE WAY OUR NATIONAL DEBT COULD EVER BE REDUCED OR REPAID AND IT'S CALLED: TAXES!!!!!

The above headline is therefore not only patently deceitful, but it is clearly designed to be patronizing to the many D- educated voters that exist in our country today thanks to the intentional dumbing down of Bahamians and Haitian-Bahamians by way of an public education system designed to be as inadequate and dysfunctional as possible.

screwedbahamian 7 years, 9 months ago

If the suggested new Hurricane taxes are temporarily avoided, it is because of the upcoming general election in May 2017. The " Cat has been let out of the bag". If the present government is re-elected the possibility for this suggested new taxes plus additional taxes are a very high. The Bahamas is subject to Hurricanes such a Matthew at any time and obviously a lot more planning and preparedness is in dire need. All political parties should be addressing their plans to handle such an event and possible Health problems that might arise from such events.

Reality_Check 7 years, 9 months ago

Christie no doubt has told the local clearing banks that the $150 million loan facility will be repaid using the proceeds of a "special tax" that will be introduced by the next government after the up coming general election no matter whether the next administration is led by Christie, Minnis or McCartney. Both Minnis and McCartney had to agree that this would indeed be the case no matter which party or coalition of parties wins the next general election and forms the next government. The cartel of clearing banks insisted on this requirement being met as a pre-condition to providing the $150 million credit facility that is.....you guessed it....guaranteed by none other than the honest hardworking already financially crippled taxpayers of the Bahamas. As Christie put it to the cartel of the local clearing banks, and to Minnis and McCartney, the proposed "special tax" balloon that he floated shows that it would be political suicide for the current PLP led administration to significantly increase taxes in the run up to the next general election. Therefore, doing so would have to be the responsibility of the next government early on in its first term.

Honestman 7 years, 9 months ago

It's all about grabbing power. Neither the PLP nor the FNM have been responsible in government. In this stage of the country's history we should have had a robust hurricane fund in place. We should have had a Financial Disclosure Act, a Fiscal Responsibility Act and a Freedom of Information Act. These are the pieces of legislation that underpin a mature and healthy democracy. Instead of that we have a political system that is rotten to the core, full of greedy and unscrupulous politicians whose only aim is to look after themselves and their own. Hey, in the Bahamas you can go from being a modestly paid Union leader to a multi millionaire cabinet minister with a large property in a rich gated community out West. This is the prize for selling your soul and your people.

ohdrap4 7 years, 9 months ago

While reading comments, I was really amused when a poster said that a tax 'with minimal impact on people' would be a tax on cats and dogs. I think the post has since been deleted.

But , after seeing the picture above in the printed paper, I realized it was not a joke. In front of the politicos, there is actually a potcake, ready to be taxed.

sheeprunner12 7 years, 9 months ago

His advisors probably read the Guardian and Tribune comments .......... should follow our suggestion for him to resign and call an election before Christmas ......... at least we can start 2017 with a new government devoid of these PLP bungling crooks

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