Bahamian government presents budget with no news taxes to Parliament

NASSAU, Bahamas, CMC -The Bahamas government has presented a US$3,54 billion budget with no new taxes to Parliament with Prime Minister Phillip Davis saying many components of this fiscal package carry forward and build on the measures that his administration has implemented since it came to office in 2021.

Davis told legislators that the estimated revenue excludes reimbursement of US$75 million from the Grand Bahama Port Authority (GBPA) as he insisted that the total amount due to the government by the GBPA is US$357 million.

He said that total expenditure is estimated to amount to US$3.61 billion, of which, recurrent expenditure accounts for US$3.27 billion and capital expenditure for US$344.5 million.

Davis said that the fiscal deficit is estimated at US$69.8 million or 0.5 percent of gross domestic product (GDP), with the primary balance showing a surplus of US$586.9 million or 3.9 per cent of GDP.  He said given this, the debt to GDP ratio has been projected at 75.3 per cent of GDP at the end of the fiscal year 2024-25.

Prime Minister Davis said that earlier this month, his administration officially launched Cloud Bahamas, which is the name of the new Government Enterprise Resource Planning Application.

“This application or ERP is going to modernise how we do business in the public service. As we've referenced in the past, the previous government put in place a compendium of financial legislation which included reporting obligations which could not be met using the government's existing financial information systems.

“We decline to speculate as to whether an error of this magnitude was intentional, but subsequent complaints about missed reporting deadlines, when the government's existing systems made reporting impossible, cannot be taken seriously,” he said, adding “thus, we have ignored the noise and focused on the remedy”.

He said beginning in January 2025, Cloud Bahamas will bring change and innovation to the public sector.

“The new system will allow for improved financial reporting, including a public sector income statement and balance sheet,” Davis said, highlighting the need for improved financial reporting capacity and the significant benefit of lowering the costs of operating the public sector.

Prime Minister Davis said that his government's revenue philosophy has always been to lower the overall tax burden for ordinary Bahamians, and to focus on tax efficiency and enforcement.

He said this budget has no new taxes, with some adjustments made to fees on government services where the cost of providing that service has increased.

“Since we started prioritising this focus, we have gained favourable results. The revenue to GDP ratio has shown consistent growth, rising from 18.7 per cent at the beginning of our first term to 20.4 per cent in the most recent complete fiscal year, which was 2022/23.

”Going forward we will continue on this path of revenue enhancement toward the attainment of our medium-term revenue target of at least 25 per cent of GDP.”

Davis said that the revenue measures in the fiscal package can be categorised as falling within four main priorities, namely, the enhancing the well-being of Bahamians and creating opportunities; increasing revenue from foreign direct investment; addressing the revenue underperformance of VAT on real estate transactions and developing an equitable and competitive business environment.

Davis said that a key policy priority for his government is supporting new opportunities for Bahamians and incentivising Bahamian participation in a growing economy.

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