Posted as a comment to this recent blog but it raises some interesting points so we thought we should post it as the blog for today.
The sad thing really is that VAT has been selected (Some years ago BTW) to replace the tax revenue system that has to go away: Import Tariffs.
It started out as simply as that. Considered Barriers to trade, the imposition of Import taxes, sometimes used to protect local products, are considered discriminatory to the products of other nations, our supposed trading partners.
The Bahamas however, really have few products to protect. The products we do produce are certainly not produced in sufficient quantity to supply the local market. Unfortunately for the locals, these Changes come amid serious Budget deficiency increases caused mainly by continued Government overspending, over promising and waste every single year for decades.
The Government however, is convinced these Tax regime changes will yield increased revenue, and so with external Organizational pressure mounting, are eagerly anticipating increased revenue, hurrying towards it like we have never seen Government hurry before. In Reality they are more walking backwards really fast! It is a shame Government administrations have not been more open and honest with the people, but, I suppose it is difficult to promise them the world, then have to explain why it isn't happening as promised. I mean the real reasons, not the pass the buck response.
Unfortunately "we the People" have not exactly been diligent in our study, awareness or even realization of our new reality. This is not new. This has been a scheduled series of benchmarks to be met and committed to for 20 years of negotiations. We have missed many deadlines, begged off on no doubt, especially during our "Political season". Hard to negotiate when your stumping for a year. While most other nations have literally dozens and hundreds of personnel involved in the literally hundreds of different aspects of these "trade agreements", which are really akin to forced compliance from external ex territorial entities, we have had but a handful, who won't level with us.
By the way, the reason some specialty/individual taxes were eliminated, is because if left in place they would amount to double taxation, if VAT was simply added. A no no under WTO rules.
Like it or not, the Bahamas is subject to "trade liberalization" in both goods and services.
So far, we have seen only the changes concerned with goods, save the liberalization of the restaurant and entertainment sectors in the 2010 Budget Communication. Wait 'til the rest get opened up.
Bahamians are going to be marginalized in their own country, partially their own fault, but mainly through the actions of their elected leadership over the last 30 years.
