The Bahamas' tax system is antiquated and can no longer support a growing and constantly developing country, Livingston Ferguson, senior customs/revenue officer, Ministry of Finance, told teachers at Government High School during a recent session at their professional development workshop.
Ferguson said that VAT represents the county's best chance at economic recovery and its ability to keep pace with national development.
"As it relates to recurrent expenditure, we're spending at the tune of $1.7 billion a year and only taking in $1.5 billion in revenue," Ferguson said.
"Our present revenue collection system is antiquated. About 60 percent of all of our revenue comes from customs duty and we've been using that system for 100 years. We need to move to other forms of tax to meet the country's needs."
Ferguson pointed out that as the population continues to grow, The Bahamas' social and infrastructure needs will increase and the government will have to find ways to satisfy them. He added that organizations like the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB) have strongly suggested to The Bahamas that the country take more aggressive measures at correcting its fiscal situation. While the Ministry of Finance is doing all it can to plug the leaks in its already established sources of revenue, Ferguson said much more needs to be done.
"We are not too far gone yet, but what we do today will determine what will happen to us in the future," Ferguson said.
"A rise in debt would mean for The Bahamas a decreased capacity to borrow in the case of emergencies like hurricanes and a further credit downgrade would mean that interest rates for not only the government but for the average consumer would increase."
The government's series of consultations on VAT continued yesterday at S.C. McPherson High School and the Bahamas Human Resources Association; and at Alexiou Knowles & Co. and the Bahamas Electricity Corporation today.

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