Government must consider taxation scenarios to fix economy, notes Rolle

While there remains international concern about this country’s widening debt burden, brought about by the COVID-19 pandemic, Governor of The Central Bank of The Bahamas (CBOB) John Rolle said there is no question The Bahamas can afford to repay its debts, but explained that there is the question of how much of that burden the government would be willing to pass on to the taxpayer.

Rolle, who held a virtual press briefing yesterday, said an analysis of the country’s economic position warrants the government not taking a passive approach to pandemic relief and servicing government debt. He said scenarios that include the government simply ‘sitting on its hands’ always end disastrously.

According to Rolle, the government and the CBOB have to take measures to avoid passive outcomes and therefore look at intervening when the country’s economy is in a state of decline.

While the government has affirmed on several occasions it does not intend to raise taxes, Rolle said intervention scenarios do include passing new tax burdens on to the taxpayer when everything is analyzed.

“A lot of the discussions we’re having now aren’t really about whether we can afford what the government is doing, it’s really whether we are prepared to give, in terms of an adjustment in the tax burden and other changes that the government needs to make after the pandemic,” Rolle said.

“If we cannot accept passing those costs on to the taxpayers, then we do not proceed as deep and far today in our intervention.

“I can assure you for The Bahamas, it is not a question of affordability, it is how much are we willing to repay.”

Rolle said risks to the country’s outlook still remain, including the continuing pandemic and the continued annual threat from hurricanes.

“The prudent policy responses, for the time being, are to remain vigilant around the health of domestic financial institutions; be measured about the timing of easing of foreign exchange conservation measures; to continue to be sparing about the focus and magnitude of economic support that the government provides; and to achieve accelerated execution on domestic and foreign investments that can provide some replacement support for the lull in tourism,” said Rolle.

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source https://thenassauguardian.com/government-must-consider-taxation-scenarios-to-fix-economy-notes-rolle/