That’s one of the areas for which the International Monetary Fund takes the government of The Bahamas to task in its latest biannual report. Most of the
criticism centres around not the financial situation of the country, but the potential for serious crises if the government fails to administer some of the nasty-tasting medicine the IMF sees as necessary to ward off major economic problems down the road.
One of the big areas of vulnerability, according to the Fund, is the Bahamian insistence on stamp taxes and tariffs as the major revenue generators, even though they are totally dependent on the vigour of the global economy.
The government’s response is that it expects the global economy to recover, which will improve tax collection without the need to implement stronger revenue measures.
The IMF recommends an increase in licensing fees and excise taxes on liquor and fuels, and a serious effort to reduce tax evasion (which is estimated at 50 per cent for property taxes and business license fees, along with widespread evasion of customs duties).
The government instead says time and political support are required to improve tax administration and that staff training, enhanced property valuations and auditing techniques will do the trick.
It also says that a tax commission needs to be established to help sell the public on the need to raise revenue before a commitment to reform can be made.
Just what this country needs: more delay, another commission. Anything other than taking a politically unpopular stance.
Editorial, The Nassau Guardian
