The tax cut gamble

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September 29, 2021

Now that the Free National Movement (FNM) has been unceremoniously kicked out of office, and Prime Minister Philip Brave Davis has appointed his Cabinet — deciding to take the important finance portfolio — he will find mounting pressure to deliver on the big-ticket campaign promise of reducing value-added tax (VAT) from the 12 percent it was increased to in 2018, to 10 percent.

The pledge was made no doubt with the full awareness of how the Minnis administration’s decision to increase VAT from 7.5 percent to 12 early in its term led to a dramatic depletion in public trust, which was never regained.

There is no evidence the VAT reduction proposed by the Progressive Liberal Party (PLP) would have any dramatic impact on people’s personal economic circumstances, but a failure to fulfill the promise would likely be damaging to the new administration.

Davis can expect to get the question often from reporters: “When will you reduce VAT?”

On the weekend, his response to that was that his administration will fulfill that pledge “once the dust settles”.

PLPs remain understandably elated at the recent election victory but there is no honeymoon for the new administration.

As one observer recently put to us: “The couple is now fighting in hushed tones. Later, they will get louder after the nosey neighbors start whispering.”

It won’t take long for many Bahamians to start getting antsy, as many are still hurting, and will be looking to government to create an environment for better days ahead.

Click here to read more at The Nassau Guardian

News date : 09/29/2021    Category : Finance, Politics, Nassau Guardian Stories

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