Ensuring tax reform remains firmly near the top of the Bahamasﾴ political agenda, as Minister of State for Finance, Senator James Smith, once again laid out the case for the adoption of some form of sales-based tax to replace the jurisdiction’s traditional reliance on tariffs and other ‘distortionary’ levies.
Addressing the Abaco Chamber of Commerce last Thursday, Mr Smith commented that it would be foolish to ignore the findings of studies showing that customs levies and stamp duties, the jurisdictionﾴs main source of tax revenues, have a distorting effect on the local economy. “Indeed, we are duty bound to consider seriously any sound technical advice which we receive,” noted Smith.
However, the Minster of Finance promised that the present government remains committed to maintaining the jurisdiction as a low tax centre.
“All governments of The Bahamas, including the current administration, have made it clear that there will be no taxes levied on income or capital nor would a tax regime be introduced that would adversely affect the competitiveness of our financial services sector,” Senator Smith observed. “Therefore, any attempt to alter or change our tax regime to comply with the dictates of trade liberalisation, has some built-in restrictions for The Bahamas,” he added.
The minister repeated the argument that tax reform is an inevitability, no matter what course the jurisdiction takes politically in the years ahead.
“Indeed, even if The Bahamas elects not to participate in any of the trade arrangements, there is, in my opinion, still a need to seriously consider reforming our tax regime in order to expand the tax base, reduce economic distortions and ultimately, stabilise public finances,” he said.
By Amanda Banks, Tax-News.com
