Having chosen a model of value-added tax (VAT) that includes relatively few limitations, Prime Minister Perry Christie used the opportunity of the launch of a national development plan to talk to students at The College of The Bahamas about why and how the government intends to mitigate the anticipated damage to the way of life of poor Bahamians who are affected by the new tax.
Christie identified two approaches to implementing a new tax like VAT.
One approach, he said, is to allow a number of exemptions.
"But when you analyze it, and you put it to research, and evidence-based decisions, you find that rich people will benefit more than poor people from those exemptions," he said.
The government has decided to follow the New Zealand model and limit the amount of exemptions, but create a new system of social services which Christie said would "incentivise the people who use it" through the use of cash as opposed foodstore vouchers.
"They will get cash, but on the condition that their children go to school, that they comply with certain health requirements - in other words, it'll be a wholistic approach to the award," Christie said.
"But we are going to have a focused approach to offset whatever kind of disadvantage people are placed in because of VAT. We are going to have a real focused social service intervention to be made... including policing the foodstores to ensure that they don't put up the prices without justification."

Click here to read more at The Nassau Guardian