Govt affirms intention not to consider income tax

The newly appointed Minister of State for Finance Kwasi Thompson reiterated yesterday in a press statement that the government has no intention of implementing personal income tax, as has been suggested over and again by the International Monetary Fund (IMF), though the government is looking at tax options to broaden and make the tax structure more equitable.

The IMF suggested once again in its recent Article IV Consultation that The Bahamas implement income tax.

However, Thompson said the government has considered the suggestions made but has made no commitments. 

“We take our commitment to achieving fiscal sustainability seriously,” said Thompson.

“Naturally, this includes considering a range of tax reforms to create a more broad-based, equitable system. The government has already committed to reviewing recommendations made by the Economic Recovery Committee (ERC) regarding the business license regime and real property tax; however, as has been stated before, the government is not contemplating the adoption of a personal income tax regime.”

Thompson said the government has already strengthened the country’s tax administration by improving antiquated systems and turning to digital systems like the Click2Clear Electronic Single Window at the Customs Department.

Thompson added that the government is looking beyond tax to strengthen the country’s weakened economic system and has therefore invested in growing small businesses through the Small Business Development Centre.

“Beyond tax reform, our top focus is the immediate economic recovery as well as accelerating economic growth over the medium and long term,” he said.

“In keeping with our articulated plans, we will do this by investing in small business development; building a robust entrepreneurial ecosystem; removing the impediments to the ease of doing business; stimulating growth in strategic new industries to support economic diversification and driving the national digital transformation agenda and other structural reforms.

“We fully recognize that by focusing on accelerating economic recovery and pursuing robust economic growth, we can put the country on a trajectory to meet the additional demands caused by this period of economic dislocation without recourse to significant additional taxation.” 

Thompson said the IMF report lauded the government’s response to the economic and social fallout cause by the COVID-19 pandemic, and he contended that the Public Procurement Bill, 2020; the Public Debt Management Bill, the Public Financial Management Bill and the Statistics Bill –some of which have been enacted and some of which are out for consultation – will all help to restore the country’s macroeconomic framework moving forward.

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