Michael Halkitis is a likeable politician. He's a smart man. He had the good sense yesterday to confirm to The Nassau Guardian that value-added tax (VAT) will not be introduced in The Bahamas on July 1 - the government's previously proposed implementation date.
The government has not yet presented the proposed law to Parliament. We have no idea what the final VAT position will be. It was obvious that VAT could not begin on July 1 anymore. But it took the junior finance minister to confirm to us the change.
VAT was supposed to come in at 15 percent. Prime Minister Perry Christie, who is also the finance minister, said previously the government abandoned its plan to introduce VAT at that rate and it is eyeing a lower standard. He also previously hinted VAT would be delayed but made no firm commitment on the issue.
Halkitis and Christie have also both said the government is awaiting a report commissioned by the Coalition for Responsible Taxation before finalizing VAT legislation.
"We want the coalition to complete its report on alternatives and give our advisors [time] to study it," said Halkitis.
"In the meantime, we will continue our preparations. The point remains, though, that we have to reform our system."
We think the government is not really waiting on the business sector's report and recommendations. The Christie government is confused on this issue and is somewhat flustered by the strong opposition from all sectors to VAT. The prime minister does not know what to do and the tax reform effort has stalled due to his indecision. We wonder if Halkitis and the other senior officials in the Ministry of Finance even know what will happen with VAT. They talk a good talk for the public, but they must be confused being led by their leader. Our direction is in the mind of Christie.
What is strange about Halkitis confirming that there will be no VAT on the day the government pledged VAT is that he is not the finance minister or prime minister. Christie should be the one informing the country of what is happening with VAT. Poor leadership is exhibited when a junior minister has to give clarity to a country because his senior, the prime minister, often makes issues unclear when he speaks.
Just recently, we saw another example of this on another major issue: gambling. Minister of Tourism Obie Wilchcombe announced in the House of Assembly during the mid-year budget debate that he would take to Cabinet a proposal to legalize web shops. The Progressive Liberal Party (PLP) MPs applauded as if this was party policy. Days later, Christie said he did not know Wilchcombe was going to say that. The prime minister then followed along with what his junior said.
These are two major policy issues in The Bahamas. The prime minister needs to speak to the direction of his government to his people. Yet, the juniors lead the leader. How sad.
PLPs can try and spin as much as they want about how this term in governance is going. One thing all Bahamians know, however, is that the Government of the Commonwealth of The Bahamas is not being led well at this time. Ad hoc governance is the order of the day. And sometimes it seems as if our prime minister is missing from his post.
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