“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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