Govt to announce new strategy to improve real property tax collection

With the first of its planned tax reforms underway – the reduction of VAT from 12 to ten percent – Financial Secretary Simon Wilson said the Ministry of Finance has now turned its focus toward changes to the real property tax.

Wilson said the government will announce a new strategy during next month’s mid-year budget presentation on how it intends to improve collections.

“The tax system we have now is a very narrow-based system and so the tax reforms that we envision are to broaden the base and lower the overall rates for Bahamians,” Wilson said during yesterday’s Office of The Prime Minister weekly press briefing.

“Right now we tax a few at a high level and the idea is we will broaden the base. One of the areas we are looking at very closely is property tax, in terms of how to broaden the base and lower the rate so that our yield goes up.”

Property tax represents less than ten percent of government revenues and real property tax arrears were in excess of $600 million at last report.

Wilson said for now, the government will assess revenue performance under a reduced value-added tax (VAT) model, noting that it could perform better than the projected neutral forecast.

“Based on the estimates the prime minister presented in the supplementary budget, the reduction is going to be at a minimum neutral and positive. During the annual budget exercise, we’ll have four months of data and we will present that in terms of what is the increase overall in terms of the reduction,” he said.

With revenue performance higher than projected, Wilson added that from the Ministry of Finance’s perspective, “We are very satisfied. If we look at our revenue performance against forecast, we are $160 million above revenue performance. The Revenue Enhancement Unit is actually being formed and is working. We have engaged our revenue advisors, we are very excited by what we see in terms of the potential for revenue yield. On the expenditure side, the overhang in terms of liabilities and so forth has been reduced, it is not reduced to a bare minimum but considerably from when I came back into the office. So from that perspective I see green shoots in terms of the strategy.”

The post Govt to announce new strategy to improve real property tax collection appeared first on The Nassau Guardian.

source https://thenassauguardian.com/govt-to-announce-new-strategy-to-improve-real-property-tax-collection/