As the government grants tax breaks and looks for ways to tighten up its revenue collection to replenish the “broke” Public Treasury, one leading economist is suggesting it goes after more than $40 million in unpaid property taxes and the millions more owed to government corporations like BaTelCo and BEC.
Dr. Gilbert Morris estimates that there is potentially $100 million to $125 million that the government has yet to collect from these sources.
Although some politicians – like Independent North Andros MP Whitney Bastian and Leader of the Coalition for Democratic Reform Dr Bernard Nottage – have rapped the government for proposing to award customs duties exemption to public service franchise holders in the tourism industry, Dr. Gilbert Morris said he thinks it should have been extended to the public.
“Imagine those (customs duties) monies put to work instead in construction. That can be a down payment for a house. The money would go to construction, importing items and so on. You would still get customs duties, but the way you would collect the duties would increase the (government’s) revenue,” he said.
“In charging customs duties on a car you’re not really expanding the revenue base of the government in any way. If you cut customs duties on cars and instead people have those monies in their pocket, it should result in increased revenue for the government even in the short term.”
Last week, the government moved to amend the 1996 Tariff Act which proposes to grant taxi cab, liveries, tour cars and omnibus drivers 100 percent exemption from customs duties when importing new vehicles – within or outside of the Bahamas .
The Act also provides for 50 percent customs duties exemption for used motor vehicles, not older than three years.
The concessions under the old Act were available for one year only from July 1, 1999 to June 30, 2000 . The amended Bill seeks to make available concessions for an even greater period of time.
Looking at economic indicators, Dr. Morris reasons that people who were importing new vehicles and paying over 50 percent of the vehicle’s value in duties, would be more inclined to invest the monies saved.
Dr. Nottage, however, disagreed.
He believes that now is not the time for the government to even consider granting tax concessions. Rather, to spur economic activity he is suggesting the government scale back on interest rates at banks.
“All of us would like to see concessions given to businesses if those concessions are going to increase productivity, profits and put more money in the hands of consumers,” Dr. Nottage said in an interview with the Bahama Journal.
“But, it would be irresponsible to do it in the current environment without first dealing with the matter of improving revenue collections and the performance of the economy.”
However, he concurs with Dr. Morris with regards to the government going after the monies owed in real property taxes.
By Tosheena Blair, The Bahama Journal
