“Those who fail to learn from history are doomed to repeat it.” – Sir Winston Churchill
“Mitchell: VAT Increase Unconscionable” – The Bahama Journal
Excerpt from this article; “According to Senator Fred Mitchell, fifty percent of the people who make under $30,000 a year in The Bahamas cannot makes ends meet at the end of the month.
The Leader of the Opposition in the Senate made it clear that he supports the government’s spending, but part ways on its push to impose a 12 per cent Value Added Tax.
‘It just seems counter-intuitive and unconscionable’, he said.”

Since it has been announced that the rate of value-added tax (VAT) would be increased by 4.5 percent, to 12%, many persons have taken the current administration to task on imposing such a burden in the backs of the ‘poor man’ but very little have questioned as to how we got to this point and to forget our past history and not learn from it is one of the most serious mistake that we can make as a nation.
Senator Mitchell says supports the government’s spending but ‘part ways’ on its push to impose a 4.5 percent increase to the rate of VAT, so basically the Progressive Liberal Party (PLP) Senator and Chairman is saying that he and his party consents to continued borrowing; increased national debt and increased deficit without a plan to actually reduce them – indeed the man is ‘mad’ and anyone else that supports his position, as he wants to make an omelet without breaking a few eggs; pure insanity and how we got to this point in the first place.
Simply put, you CANNOT continue to borrow without a way/plan of actually paying it back.
In November of 2016 it was reported that the government had collected almost a billion dollars from value-added tax (VAT); if this was the case and the money was actually out into the consolidated fund, as the story goes, what happened? What eventually happened to it because during this time the country’s economy had been downgraded at least once maybe even twice?
We all know that they say that hind sight is 20/20, and looking back now Senator Mitchell sight will be 20/20 , because while we will all agree that the country was in dire need of another source of revenue to offset the country’s borrowing and to pay its bill some could make the argument that it was “unconscionable” to introduce in the first place, if you were to apply the senator’s standards at to what is “unconscionable” but the simple fact that the funds collected not seemingly to have been used for the purposes that they were collected is what is really “unconscionable”, in my opinion but will Senator Mitchell admit to this, in hindsight?
In the fiscal year 2016/2017 when the government was set to borrow just under $100 million to cover the projected budget deficit; $30 million more than the Progressive Liberal Party (PLP) administration had actually projected at the beginning of the 2016/2016 fiscal year; didn’t bells go off that maybe, just maybe ‘something’ was wrong? And I ask the PLP administration at the time to not blame Hurricane for this “miscalculation”, because an additional $150 million was subsequently borrowed after this storm and by the way, wasn’t VAT supposed to have been waived in the event of a natural disaster?
The truth of the matter is that the former administration never actually met any of its financial targets but now seeks to label the present measures as “unconscionable”; what is actually “unconscionable” is anyone in the former Progressive Liberal Party (PLP) administration criticizing anything to do with the present budget.
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“Mitchell applauds FNM VAT rebels” – The Nassau Guardian

Excerpt from this article; “Progressive Liberal Party (PLP) Chairman Fred Mitchell yesterday applauded the four government MP’s who voted against the value-added tax (VAT) increase in parliament early Tuesday morning.

Bain and Grants Town MP Travis Robinson, Golden Isle MP Vaughn Miller, Pineridge MP Fredrick McAlpine and Centerville MP Reece Chipman all voted against the bill to increase Vat from 7.5 percent to 12 percent.

First of all is a vote that should have been condemned because what happened was against the advice of the views of the business community and against the views of the people at large,’ Mitchell said in an interview with the Nassau Guardian.”

It is indeed interesting that now the chairman of seems to want to cash in on this current situation given his past when he and his very own parliamentary colleagues seemed unable to show any form of moral conviction or courage when they served the people of The Bahamas as the government; the debacle of the Gaming referendum is prime example of this because while the people said NO, the government of the time, of which Senator/Chairman Mitchell was a member of parliament and Cabinet Member who sat silently as the Progressive Liberal Party went against the voice of the people but to be fair Mr. Mitchell he may not have even been in the country at the time.

My point: Senator/Chairman Mitchell’s opinion of this matter and the persons involved carries as much weight as a sieve carries water and represents an opinion best kept to himself, as he goes on to show his duplicitous hypocrisy in this matter; “And not just to vote with the PLP but vote no the principle that the tax is wrong, and I think that they ought to be applauded for having stood up for that.” But where was Senator Mitchell when the people said that the original implementation of values-added tax (VAT) was wrong?

Did it just become wrong?

Why should his opinion matter at all?

Personally, while I understand the position on which these four members of parliament claim to have stood, they should also realize that because of our system of governance there would be consequences.  I bear no ill will or have any bad words for these men; they voted their conscience and/or represented the voices of their constituents.

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“PLP: Where are the VAT increase studies” – The Nassau Guardian
Excerpt from this article; “The opposition Progressive Liberal Party (PLP) yesterday called on the Minnis administration to provide the empirical data the government used to come to the conclusion that increasing value-added tax (VAT) from 7.5 percent to 12 percent was necessary.
During his contribution to the 2018/2019 budget debate in the Houser of Assembly yesterday, Prime Minister Dr. Hubert Minnis noted that the government explored different models of VAT, but the 12 percent proved to be the most feasible.
He did not provide any evidence of his analysis.
Shadow Minister of Finance and PLP Deputy Leader Chester Cooper said this consideration failed to show where any empirical analysis and studies that’s normally required of a Ministry of Finance,’ Cooper said during a press conference in the Minority Room after the prime minister wrapped up debate.”

The Progressive Liberal Party (PLP) must be mindful of the fact that they set a certain criteria under which the rate on value-added tax would automatically increase by law and I will continue to remind them of it; “The Compass Lexecon study also suggested the introduction of a new, permanent so-called fiscal rule to enhance the sustainability of our fiscal plan and to strengthen the Government’s credibility. Under such a fiscal rule, we would set two targets: one , a maximum target for the debt –to-GDP ratio and two, a target for the minimum annual reduction in that ratio, which would be waivable under emergency circumstances such as economic downturns and natural disasters.
The key point in this recommendation is that, should we fail to meet our fiscal debt target, the VAT rate would automatically be increased by law.”
So a few questions:
1. What were they referring to when they said “to strengthen the Government’s credibility” and was this ever achieved?
2. Did the past administration ever meet their targets of maximum target for the debt-to-GDP ratio ration and their target to the minimum annual reduction in that ration
3. Did the past administrating succeed in meeting its fiscal debt target? And
4. Due to the fact that they had never met these targets, are they saying suggesting that they would not have increased the rate on VAT if they had won the last election?
For them to now say that they need imperial evidence as to why the increase in value-added tax (VAT) came about would be for them to suggest that they were actually meeting their economic/fiscal targets for the country after the implementation of VAT and the economy was actually improving; we all know this is not true.
Exactly how many times was the country’s economy downgraded after the introduction of VAT?
The following except is after the fourth time that the economy was downgraded, as reported in The Tribune on the 21st of December of 2016 under the headline, “Standard and Poor’s Downgrade Bahamas to ‘Junk’ Status”
Excerpt from this article; “LEADING global credit rating agency Standard and Poor’s (S&P) yesterday handed the Bahamas an unwanted Christmas present – a downgrade to ‘junk’ status, reflecting the country’s worsening economic and fiscal position.
S&P’s action, based on the Bahamas’ weaker economic growth and slower fiscal consolidation pace, means the country has lost its all-important ‘investment grade’ status, which is potentially highly damaging for the nation and its economy as it signals to the international capital market that its creditworthiness is slipping into dangerous territory.”; this is two years after the implementation of VAT.
So; we had four economic downgrades, a warning that the country was still heading in the wrong direction, even after the implementation of value-added tax, which the government at the time claimed was performing above expectations; then there seemed to be a steady rate of borrowing instead of a downtick in borrowing and the Progressive Liberal Party (PLP) now asks for imperial data as to the reason to why there was an increase in VAT; how about they, as a collective, explain to the public first why we stood on the verge of being down-graded below ‘junk-status’, I man can you go any lower and what was their economic plan to avoid this from becoming a reality; was it more borrowing at high rates without a feasible plan on how to pay it back?
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“Christie: PLP would not have raised VAT to 12%” – The Nassau Guardian
Excerpt from this article; “Former Prime Minister Perry Christie was oversaw the implementation of value-added tax (VAT) and the regularization and taxation of gaming houses in The Bahamas, said his administration had no plan to increase VAT to 12 percent, nor would it have increased taxes on gaming operators.
Christie said he would have thought the government would have engaged in a more consultative process before moving ahead with increasing VAT or gaming taxes.”
While I am at a total lost as to how and why the increased taxation of the gaming industry has gotten so contentious, so quickly; I would like to say that the only thing that I agree with the former prime minister on is that the government “should have engaged in a more consultative process”, but for him to now be saying that the Progressive Liberal Party (PLP) would not have raised VAT to 12% is merely his way of saying that there was a plan to increase the rate but by how much had not been decided yet.

The Progressive Liberal Party (PLP) always seems to find a way to talk themselves into a situation from which they cannot give logical explanations; “The Compass Lexecon study suggested the introduction of a new, permanent so-called fiscal rule to enhance the sustainability of our fiscal plan and to strengthen the Government’s credibility. Under such a fiscal rule, we would set two targets: one, a maximum target for the debt-to-ratio-GDP ratio and two, a target for the minimum annual reduction in that ratio, which would be waivable under emergency circumstances such as economic downturns and natural disasters.
The key point in this recommendation is that, should we fail to meet our fiscal debt target, the VAT rate would automatically be increased by law”
Excerpt from the 2014/2015 Budget Communication, delivered by the Ho. Perry G. Christie.
So while the former prime minister is seeming to suggest that he would not have raised the rate on VAT to 12 percent if his party had won the 2017 general elections, the record clearly reflects that the rate of VAT would have automatically increased by law because he would have very hard pressed to attempt to sell the notion that his administration actually met their fiscal target; bearing in mind the four economic downgrades during his administration; so the question that comes back is what did his government actually do with the extra income generated by VAT?
If it were used to run the country i.e. pay salaries and other bills; then why were so many bills left outstanding and so many Bahamian citizens left unpaid? Was the country’s payroll really that large and if it were applied to the country’s debt then why was it [the national debt] steadily increasing?
The former prime minister and his minister of state for finance seem to now be on a mission to either clear their names or ride the present wave of discontent currently against the present administration to garner support for themselves or for the ill-fated PLP party.
I say if the people allow this then may God be with them as they allow this nonsense to unfold right before your eyes.
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“Lloyd: I would rather lose election than lose my country” – The Nassau Guardian
Excerpt from this article; “Defending the government’s 2018/2019 budget yesterday, Minister of Education Jeffery Lloyd said he would be satisfied losing the next election if it means ‘rescuing’ The Bahamas from economic disaster.
Lloyd said he supports the budget even though it is ‘uncomfortable in some of its terms’.
‘The unpalatable, unpardonable, unvarnished truth is simply this, we have maxxed out our credit card’, Lloyd said during the budget debate.
‘We have not a single cent to spare.’
‘The country is sitting at a precarious state of disaster … [and] we are over that precipice from which there is no return. As the DPM said yesterday, we are one disaster away from disaster.”
“I would rather loser the next election, if it means ‘rescuing’ The Bahamas from economic disaster” a powerful statement and isn’t that what this budget and 4.5 point increase in Value-added Tax (VAT) is really about?

No one said that the road to correct the wrongs which we have been ignoring for far too long was going to be easy but we all sat back and asked for ‘someone’ to do ‘something’ and when someone listened and is courageous enough to do something, we then complain about what is being proposed – WHY?!
Because it is not the ‘’something’ that we had in mind?
Actually what did we have in mind?
The Truth of the budget is while the rate on Vat has increased, in the long term [this is long term planning] there will be a reduction in custom duties and excise taxes; so there is a plan to attempt to strike a balance in this budget, bring government spending and borrowing under control, putting the country’s finances in a much better position than they are today and how they were met a year ago, while at the same time attempting to strike a balance – this cannot be disputed – only by those that have no idea of what has/is being proposed and/or by those wishing to gain political mileage going into the next general election, let me address that.
“You can’t threaten me”
The opposition has shown great support for the people at his time but showed very little support when they implemented VAT. They now say, that it [VAT] was already on the books when they took office 2012 and I ask if they saw it has being something that would hurt rather than help, then why implement it? Then there was the issue/question of the money collected from this tax and where it was going; while it may have been going into the consolidated fund, as per the Progressive Liberal Party (PLP), how much was actually going to pay the country’s bills, as we have such a massive amount of unpaided and past due bills?
Let me be clear, this situation did not begin with the former Progressive Liberal Party (PLP) administration but it was that administrating that first promised, as it implemented VAT to take care of the country’s financial affairs but only failed the people by actually producing four economic downgrades and had the country a heartbeat away from junk status or did we actually achieve this accomplishment under their watch?
So, if any of them claim to NOW have the answers, they should be turned away like the deceitful, hypocrites that they have proven themselves to be.
I will end this with the words of Mark Humes, Free National Movement (FNM) Member of Parliament for Fort Charlotte; “I don’t take any pleasure in supporting this budget but it is a necessary action for our past actions.
Indeed, this not a time of delight for any of us but some of us do see the bigger picture and long term goals; which are necessary and which must be taken.
Some may ask why now and I ask why if not now then when?
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“70 PERCENT AGAINST TAX INCREASE IN SURVEY” – The Tribune
Excerpt from this article; “MOST Bahamians oppose the Minnis administration’s ‘People’s Budget’, with more than 70 percent against the impending value added tax increase, a new scientific poll from marketing and research firm Public Domain reveals.
Seventy-six percent of Bahamians oppose the budget, with such a large opposition consistent across demographic groups, regardless of age or income.
M’wale Rahming, president of Public Domain, said the results are the latest indication the Minnis administration is heading toward the ‘point of no return’, that moment when Bahamians’ disapproval of an administration may not be capable of reversal.
‘What happens’, he said yesterday, ‘is people start to point back to other missteps that you’ve made so new mistakes are no longer in a void. So, it ‘looks how they did this and they ain’ talk to us and they did that last thing and they ain’ talk to us, so the people are no longer hearing what the government is saying, they are now referring to your past missteps and I think the danger is its difficult to govern when you don’t have buy-in from the general public and I think we saw that in the last administration and the one before that. At the end of those terms the genera public (was) no longer tuned into those administrations.”

Let me first interject that polls and surveys are a dime a dozen and while some may actually have merit; they too must be taken with a grain of salt because I can produce for you at this very moment a survey/poll which suggested that the Progressive Liberal Party (PLP) would have won the last general election by a very large percentage but I will hold this survey as having merit; being the voice of the people, and deal with it accordingly.
Addressing the headline “70 percent against tax rise in survey”, I can actually believe this because no one wants to pay taxes much less have these taxes increased, so this would be no surprise; the surprise is the amount of mistruths surrounding the increase.
After having stabilized the economy [something VERY rarely spoken about by those that oppose this budget] the Free National Movement government then went on to implement a three [3] year plan in which it sought to address the $360 million in arrears, with ‘additional revenue from VAT and other taxes’ contributing to paying of this massive build up in unpaid bills
Over this three [3] period the government seeks to implement a plan to give back to consumers in the form of customs duty and excise tax reductions – this is the governments plan as it pertains to the increase in VAT along with a number of other concessions already announced but it seems that persons have only heard that VAT was being increased by 4.5% to 12% and just stopped listening to the government at this point, only to be taken on a ride by each and every person with an anti-government agenda – some of these persons not even knowing exactly what they are opposing or even why they are opposing it, but are more than willing to get on social-media, write to the editor, call into a talk show or even appear on a talk show to display their ignorance in this matter.
It is being suggested that this government is rapidly approaching ‘the point of no return’ with the people, and while I will admit that their communication up front end has been lacking, on the back end no one can reasonably argue about/against the objective of the government given all the evidence/facts readily available.
In this case ignorance is really a choice.
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“Davis calls budget ‘height of incompetence” – The Nassau Guardian
Excerpt from this article; “Calling the 2018/2019 budget communication a disaster filled with inconsistencies, Opposition Philip Brave Davis said yesterday the government’s fiscal agenda demonstrates the ‘incompetence’ of the Minnis administration.
He branded the budget as nothing more than poor management.
Davis insisted the government must make changes.
‘The government has created a nightmare for businesses because of its failure to plan,’ said Davis in a statement referring to the revelation the government will increase value-added tax from 7.5 percent to 12 percent effective July 1.”

Before I get into my thoughts on this tax increase, I would like to address Opposition Leader ‘Brave Davis by first saying that the Progressive Liberal Party (PLP) Budget 2014/2015 hinged on the success of Baha Mar and Value-Added Tax (VAT) both of which the PLP managed to make a mess of, and also by referring to page 43 of same said Budget Communication delivered by the Hon. Perry G. Christie; excerpt from this communication; “The key point in this recommendation is that , should we [the Progressive Liberal Party government] fail to meet our fiscal debt target, the VAT rate would automatically be increased by law”, so if anyone believes that the Christie administration actually met [their] fiscal debt target” during their time in office, that person would be lying to themselves; so therefore if the PLP had won VAT would have most like “automatically increased by law”. With that being said the only point that anyone in the PLP has to stand on is the present’s government’s failure to consult with the general public on this issue, so we will look at this point.
While I do defend the position of the present government to increase taxes to “pay of its massive backlog of arrears” and set the stage for pending reductions in customs duties when The Bahamas acceded to the World Trade Organization, next year.
‘To address this challenge, we are imposing a three-year fiscal strategy that will allow us both to deal with the deficit targets next year.”, I had question why would something of this magnitude be announced with such a short window for the country to make the necessary adjustments?
Then there is the issue of the massive tax being imposed on some of the “number boys”, while many may feel it is alright to tax this industry heavily, I personally feel that a 50% plus on some of their earnings is a bit much; it almost seems personal. Now if it is or is not is none of my concern, I am just saying I feel it is a bit unfair, especially in light of the manner that some other corporations/businesses are being taxed.
I feel that if the government is looking to increase revenue and address the massive backlog of arrears, the value-added tax could have been raised to 8.5-9 percent and a corporate tax imposed on the larger businesses that would benefit from the tax concessions but be unfazed by the increase in the rate of VAT; this would be the only way, in my opinion, to not only achieved the desire objection but also seem fair to all while actually being fair to all.
As I noted before, I support the VAT increase based on what it hopes to accomplish but I hope that during the ongoing debate on this matter, the slight increase in VAT along with a corporate tax is considered, because I feel it is the best option to tax ‘evenly’ and ‘fairly’ if you are going to impose taxes.
My final words, to Philip “Brave “Davis, due to the fact that the budgets that you and your administration ‘crafted’ were so poorly managed that they only produced four downgrade, unless you are actually going to bring something of intelligence to this discussion on how to move the country forward and get it out of the hole that you and your administration left it in, then please for the love of God be quiet.
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“There is a brave new world on the horizon and this crew can’t take us there.
The crew that is there now just cannot take us there because they are not BRAVE enough to understand that you listen to the IMF (International Monetary Fund) but you do not have to implement what the IMF tells you”
Philip ‘Brave’ Davis this past Friday as he attempts to pander to the public’s fears and outrage of the increase of the rate of Value-Added Tax (VAT) this past week, but while he suggests that the current Free National Movement (FNM) administration is too weak to stand up to the IMF he seems to have forgotten why his Progressive Liberal Party (PLP) government implemented VAT in the first place and will also say whatever that is necessary to distract the public from what is actually being proposed.
“BITTER PILL – VAT to jump from 7.5% to 10%” – The Nassau Guardian 31st May 2018
Excerpt from this article; “Deputy Prime Minister and Minister of Finance Peter Turnquest revealed yesterday that value-added tax (VAT) would increase from 7.5% to 12% effective July 1.
The increase in VAT is expected to bring in an additional $400 million in new revenue.
In his 2018/2019 budget communication, Turnquest said the government must find a way to pay off its ‘massive backlog of arrears’ and set the stage for pending reductions in customs duties when The Bahamas accede to the World Trade Organization next year.
‘To address that challenge, we are proposing a three-year fiscal strategy what will allow us to both deal with the assorted fiscal pressures that we face in 2018/2019 and beyond to meet the deficit targets each year.’ Turnquest said.”Anyone that has taken the time to read this budget will see it for what it is; an attempt to seek to do that which past government’s budgets have failed to do and that is lower our debt and deficit by primarily lowering the rate at which the government borrows. “

For example, unfortunately, one of the largest government expenditures was salaries and the only way to lower this cost was by lessening persons on the government’s payroll because it had became practice for past governments to use the government system as way to pay back party loyalist in an attempt to gain favor and votes with and from the people. They hired people at a rate that we as a country was not able to sustain, so while the people worked, the country was slowly going broke and at this rate they would have eventually ended up working for peanuts due to the eventual consequence of this unchecked practice – a devalued dollar.
Now the opposition claims that the people have been betrayed by “The People’s Government”; the Free National Movement(FNM) but all successive governments actually betrayed the people by offering them false hope, fixing the books and kicking the ‘economic can’ down the very same dirt road.
“No more kicking the can down the road for someone else to clean up. We are making the tough choices, understanding that the redress of our fiscal situation does require real sacrifice on the part of our citizens; however, by doing so, the country will reverse its spiraling debt situation and set itself up for success in the medium and long term.” – Peter Turnquest.
Indeed, there is brave new world out there but again the Hon. Philip ‘Brave’ Davis has been caught napping and therefore totally unaware that his world is unfolding right before his eyes, because this current Free National Movement (FNM) administration is doing what he [Brave] and other governments were not “brave” enough to do
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