FNM MPs kept in dark on increase

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705 total votes.


Deputy Chief Reporter


THE government’s proposed value added tax increase was not only a shock to the nation but completely blindsided several Free National Movement members of Parliament who told The Tribune yesterday it appeared the decision was kept within the confines of Cabinet.

Pineridge MP Frederick McAlpine and Fort Charlotte MP Mark Humes, in separate interviews with The Tribune, said they were caught by “surprise” when Finance Minister K Peter Turnquest made the announcement last week.

North Eleuthera MP Rickey Mackey said he was not completely caught off guard but said he did not know the increase would be as much as 12 percent. However, he said he was in complete support of the increase because the country had no other choice.

Two other members of Parliament who asked for anonymity said they were blindsided, telling this newspaper it was “shameful” the hike was not even revealed during a parliamentary caucus meeting held the night before Mr Turnquest’s budget communication.

This was because the decision was apparently considered “sensitive” information, which supports the view that there was virtually no consultation ahead of the announcement, The Tribune was told.

Last Wednesday, the deputy prime minister revealed effective July 1, VAT will increase to 12 percent from the existing rate of 7.5 percent.

“I was caught off guard, but I understand why it came the way it did,” Mr Humes said yesterday when he was contacted. “There are some things that are pretty sensitive.

“I understand things have to be held close to their chest and in understanding that I know why the decision was made. With that I am okay with the government doing it the way they did.”

Mr McAlpine also confirmed he was completely “taken aback”.

For his part Mr Mackey said: “I may have known maybe a little more than the general public, but based on the current financial need I see a need for it. It’s not something you want to do but we are at a place where we either deal with the issue or we may end up like Barbados.”

Recently, Barbados’ newly-elected Prime Minister Mia Mottley said she planned to meet with the International Monetary Fund in an emergency plan to tackle the country’s massive debt.

Mr Mackey continued: “No one likes to pay more, but the current financial situation demands more. You can’t continuously run deficits and don’t think it will catch up with you.

“Overspending, justified or not now requires more of us as a nation. Moving forward I would say with the need for us to pay there is a need to demand more of our government to ensure wastage ceases or stops.

“I won’t say specifically I knew it would be a substantial increase but I had been having conversations with the minister of finance because of some developments in my constituency. This was hard for them.

“He said to me we have to make hard decision that will alienate every sector, but there are no choices in the matter.”

In his budget address to Parliament last Wednesday, Mr Turnquest noted a string of changes to the country’s tax regime, which would benefit thousands of families and businesses.

Then came the price for paying for these measures: VAT nearly doubling.

The government projects the VAT increase will help it reap $1,115,007,455 in revenue in the next fiscal year, a 60 percent increase compared with the forecasted VAT revenue for 2017-2018. Mr Turnquest said this was indicative of the government choosing not to wait until it is too late to shore up the economy, but opting to act now and act responsibly.

The decision attracted the fury of opposition members in the House of Assembly who shouted “shameful” from their seats, while others asserted the government was “trying to kill the Bahamian people”. Later during a press conference, the Progressive Liberal Party warned the move would spark a recession as it poured doubt on Mr Turnquest’s economic growth projections.

Bahamas Institute of Chartered Accountants President Gowon Bowe also believes the government’s plan to increase VAT will create further distancing between the “haves and have-nots” and possibly create the conditions for class unrest, he told The Tribune.


Well_mudda_take_sic 6 years ago

Repost: Is the 'Chicken Little scare tactic' the best the dimwitted Doc and incompetent Turnquest can come up to justify the disastrous decision they made to increase VAT to 12%. These two bozos are now trying to play the same 'scare card' that Christie played when he introduced VAT at 7.5%. I remember well 'chicken little' Christie singing the sky is falling to scare the hell out of us into accepting VAT. And no sooner was VAT introduced then Christie turned around and said: "To hell with reducing annual deficits and the national debt, we need to garner more political support for the PLP by growing the size of the public services sector so that it can serve as a social safety net that will hopefully buy more votes for the PLP." And so Christie effectively flushed our VAT dollars down the toilet rather than introduce much needed austerity measures to reduce the out-of-control costs of our bloated and largely non-productive civil work force. Now we see the dimwitted Doc and incompetent Turnquest trying to pull the same 'chicken little Christie' scare tactic on us in a feeble effort to try justify the Minns-led government's foolish proposal to jack up the VAT rate to 12% without having done appropriate modeling and sensitivity analyses that would almost certainly reveal the foolishness of their decision. The high VAT rate and exemptions proposed will result in serious complexities and tax collection leakages of one kind or another, including non-compliance by aggrieved taxpayers who will perceive the additional VAT to be most unfair. And then there is the very real risk that our still very sluggish economy will be thrown into a great recession as a result of the additional consumer dollars that will be sucked out of the economy. Such a recession combined with the exemption and non-compliance leakages will in turn result in the government receiving much less than the $400 million they hope to receive from the 4.5% hike in VAT to 12%. But perhaps most important of all, we now all know with great certainty that Minnis and Turnquest, like Christie, will take the politically easy road which means our additional VAT tax dollars will be used to grow the size of the public services sector even more in a most foolish effort on their part to both raise $400 million and 'buy' as much voter support as possible. We know this because Minnis and Turnquest have steadfastly refused to announce a detailed austerity program aimed at significantly reducing the costs of our bloated government and civil work force. WE MUST NOT ACCEPT THIS MOST FOOLISH INCREASE IN VAT NO MATTER HOW MUCH CHICKEN LITTLE SQUAWKING AND CRYING MINNIS AND TURNQUEST WILL DO. BOTTOM LINE: THESE TWO BOZOS ARE NOW TRYING TO PLAY THE 'SCARE CARD' TODAY IN MUCH THE SAME WAY THE 'RACE CARD' WAS USED TO MANIPULATE US FOR SO MANY YEARS.

sheeprunner12 6 years ago

Mudda ......... you have so much drivel to write in these posts ....... What do you suggest how the FNM Government should go about solving our debt problem??????? ......... Smart-ass

Well_mudda_take_sic 6 years ago

Just a few words for you sheeprunner12: WE DESPERATELY NEED TO PLAN AND IMPLEMENT SENSIBLE, SERIOUS, SIGNIFICANT AND PAINFUL AUSTERITY MEASURES. And there's nothing smart about tightening one's belt to fit the size of one's pocket book. It's called fiscal reality/responsibility and we need more than ever a very heavy dose of it as opposed to the already tried and failed more taxation. No country struggling with recurring annual deficits over decades has ever been able to tax itself out of the financial hole that corrupt politicians have dug for it. It takes sustained, serious and painful belt tightening of the grossly over-bloated public services sector to right the ship. And it is up to the Bahamian people (the voters) to strongly urge and, if need be, more forcibly see to it that our politicians do the right thing by us rather than the easy political thing for themselves. Comprendez?!

sheeprunner12 6 years ago

Show the readers on this blog where you can save $400 million by shrinking the civil service ........ That is ALL you can come up with??????? ....... Then when you finish sending home over 50% of the civil service, how do you solve that extra 15,000 unemployed ....... and over $1billion in severance and gratuity packages??

ThisIsOurs 6 years ago

But you're making the same mistake they did, you're looking at cutting jobs and raising taxes as your only avenue. And from what I understand there's no requirement to pay off ALL the debt in three years, you're putting the Bahamian people under unnecessary strain so you can have a nice campaign slogan. The solution is in growth. They said they're going to address that with some innovation program targeting 18-25 year olds but that also makes no sense. If your goal is innovation, look at the best IDEAS wherever they come from, if you want a jobs program for young people say that. It makes no sense to talk about supporting innovation if you put restrictions on ...well..innovation. It's clear that election campaigning is at the forefront of everything this govt does from the rushed and botched Oban deal to "we paid off the debt" ( and shrunk the economy) and "we support young people").

DDK 6 years ago

Nice how all the MP's stick together against The People who elected them.

sheeprunner12 6 years ago

Do you really think ALL of the FNMs will support 12% VAT???????

birdiestrachan 6 years ago

Turnquest makes no sense Families will not benefit from the tax changes. Yes business like new car dealers and those who own planes and helicopters . All will benefit from the changes to bread basket items. mostly the rich. because they have the means in the first place. To buy what ever they want.

Turnquest and doc lack wisdom they talk foolishness and lie all the time. They duped the peoples time voters big time. It is what one gets when one can not think for themselves.

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