Nassau, Bahamas – The Bahamas Government expects to increase revenue to 19.7% or $1,492 million in this fiscal year due to new measures taken to enhance its revenue administration and collection processes, Prime Minister and Minister of Finance the Rt. Hon Hubert Ingraham said Wednesday during his presentation of the Government’s 2010/2011 Budget Communication to the House of Assembly.
And to assist with overriding debt, The Government has announced that it is also exercising “restraint” in expenditure.
“In line with commitments and the need to provide ongoing support to the economy, these expenditures will rise modestly in 2010/11, to 3.5% of gross domestic product (GDP). However, beyond the next fiscal year, it is our intention to hold capital expenditure to 3% of GDP,” said the Prime Minister.
Overall allocations to Government ministries, departments and agencies are being reduced, however sufficient funding to meet their core mandate to the public is being provided, the Prime Minister said. Priority spending will be given to the ministries of Health, Education and National Security.
To secure the attainment of fiscal objectives the Government is implementing targeted expenditure reductions.
“If we are to achieve our overriding fiscal objectives, all will need to manage public resources judiciously and prudently within the very stringent limits that have been established,” he said.
The reductions include a 16% cut in the take home pay of the Prime Minister and 5% reduction in the salaries of parliamentarians in the House of Assembly and Senate.
The responsibility allowance of the Secretary to Cabinet, Financial Secretary, Permanent Secretaries and other senior Public Officials will be reduced by 50%.
Further, there will be no increments for public officers and public service promotions and employment are being frozen, except in special cases or extenuating circumstances. With regard to employment, exceptions are being made in essential services.
The Prime Minister pointed out that overtime pay is being reduced from $10.4 million to $1.5 million and subsidies to private schools are being reduced by 20% while mail boat subsidies are being reduced by 10%.
The provision for capital expenditure is set at $265 million compared to $255 million in 2009/10. This “modest” increase said the Prime Minister is to “accommodate commitments”.
The increase “highlights my Government’s continued commitment to modernizing and expanding the nation’s infrastructure as a means of also supporting the economy at this time.”
Among the revenue measures being introduced is a reduction on computer networking equipment from 45% to 10%, a reduction on LED light bulbs from 45% to “free” and a reduction in the rate on sheet rock board from 25% to 10%.
Further measures includes item 8 of the Tariff Act, which is being amended to make clear that its provisions apply to small businesses with a turnover of $250,000 or less per year.
A two-year break from the payment of business licence fees is being provided to petty, very small and small businesses.
To simplify the system of motor vehicle fees that contains 19 separate vehicle and rate categories, a new fee structure is being introduced that contains three separate vehicle classes based on the weight of the vehicle.
Annual fees are also being increased to better reflect the impact of vehicles on the roadways and cover the cost of street lighting, said the Prime Minister.
