America

VAT in the breadbasket to stay here

Free National Movement (FNM) MPs and Super Value owner Rupert Roberts have individually called on the Davis administration to remove value-added tax (VAT) from breadbasket items, but economic minister Michael Harkitis said. , Resolutely claimed that this was not feasible. He argued that government revenues were stable, despite the full 10% VAT imposed in January.

“It’s not feasible,” Harkitis said at a press conference at the Prime Minister’s Office on Friday.

“… When we first introduced it at 7.5%, our advice was after considerable deliberation and debate, and in the private sector, academia, scientists, scholars, [was] The best policy is to keep the rates low with minimal exemptions. This is what we have done and has been praised for being very effective and effective all over the world. “

“The situation is like this … I want to be able to say that the government is removing taxes from gas, and if so, money from somewhere,” said Harkitis. It’s just not varnished. That’s it.

“Our debt has increased by $ 2 billion over the last two years. If you can’t make money on taxes or revenue, you have to borrow, so no one wants to hear, so I have to keep saying this. I hate it, but it’s just a reality. The financial position of the government is very important because it affects us all. “

The Christie administration introduced VAT in 2015 at a tax rate of 7.5%.

In 2018, a year after the vote, the Minis administration raised the rate to 12% and introduced zero rates for breadbasket items and medicines.

On January 1, 2022, the Davis administration reduced VAT from 12% to 10%, fulfilled its campaign promises and removed zero-rated items.

In parliament last week, opposition lawmakers repeatedly criticized the government’s decision to reintroduce VAT into breadbasket items and medicines and called for it to be revoked.

This issue prompted a fierce exchange between the two.

FNM’s deputy leader, St. Barnabas MP Shanendon Cartwright, said the Bahamian people were “injured and desperately in need of relief,” and the government is burdening the poor working class Bahamas.

“The government can come here this afternoon and move to get rid of VAT from prescription drugs and breadbasket items,” Cartwright said.

“… we have to do something. This is right and we call on the government.”

In opposition, Minister of Education Engleston MP Glenys Hanna-Martin condemned the minis administration’s decision to raise VAT.

“… I don’t agree with some difficulty, but I support it, but I’m completely shocked by this awakening to the experiences of people in these communities,” Hannah Martin said. rice field.

In response, Cartwright stood up and defended his record of being a poor Bahamian voice.

In an interview with The Tribune last week, Roberts, owner of a super-value food store chain, called for VAT to be removed from breadbasket items.

When asked if he would support the elimination of 10% VAT from the staple foods of price-controlled breadbasket food, Roberts said, “I certainly agree. I will take them off. We will take them off. All you have to do is touch the button and it will disappear. Please give us a word from Mr. Harkitis. “

Halkitis, who spoke on Friday, said the reality is that while the FNM MP is trying to make political claims, it will require higher VAT rates to introduce tax exemptions.

He pointed out that the 2017 minis administration removed VAT from breadbasket items.

“But at the same time … to make that possible, they increased the rate from 7.5 percent to 12 percent,” Halkitis said.

“So I hear that this call comes primarily from the political corner about doing this, because … it’s a good political point, but when you start introducing exemptions, you can do it. Please be aware that the only way is if you pay a higher amount All other ratings.

“So we studied this, we went back and forth, and our best advice is a lower rate, hence 10 percent, lower than 12, but it’s more efficient With a minimal exemption because it’s a target … and again, that’s not something we did unplanned. “

The promise to reduce VAT rates to 10% in the Progressive Liberal Party (PLP) campaign has been skeptical in many quarters, raising questions about how decisions affect earnings.

With the change taking effect four months ago, Halkitis said that overall, the latest figures indicate that earnings are slightly above target.

As of the end of March, the end of the third quarter of the fiscal year, he said revenues were $ 1.8 billion, equivalent to 78 percent of this year’s budget.

“So we tend to be ahead in terms of profits,” Halkitis said.

“In terms of spending, it’s slightly below target, down 3%.

“And when it comes to deficits, we’re currently showing just under $ 345 million in the first nine months and forecasting $ 850 million a year.

“So we’re ahead of schedule, because in most cases income is working very well and so far we’ve been able to keep spending tight.”

However, Mr. Harkitis said the fiscal year is not over yet.

“It doesn’t necessarily end with these numbers, as we have two months and income and payments aren’t always evenly distributed, but it’s no exaggeration to say that we’re better than last October’s forecast. With a supplementary budget, that’s because the economy continues to be very strong. “

https://thenassauguardian.com/vat-on-breadbasket-goods-here-to-stay/ VAT in the breadbasket to stay here

Back to top button