Dear Editor,
Traditionally, political parties in The Bahamas come to power based on their ability to sell "a dream" to the majority of the electorate. Marketing and the strategic use of mega-rallies have also played into the dynamics of the political hype. This was played out, big time, during the 2012 general election.
Hundreds of years ago, when pirates and buccaneers roamed the world, inclusive of the Caribbean and the so-called West Indies, flash and glitter were also present. Buccaneers were individuals who were able to use the resources of a designated territory to enhance their position and influence within a specific community or nation. Pirates, of course, were the scavengers and scourge of the earth, so to speak.
Is there any difference today in our wonderful nation? Our economy, while still resilient, is challenged; and if we are not careful, we could slide over the brink of insolvency, devaluation and a credit rating debacle. How we got to this point is debatable but really irrelevant, with all due respect. We are here now and the question must be: How do we get out of the economic morass?
The National Institute for Public Policy, of which I am privileged to serve as executive director, is a nonprofit think tank mandated to ignite public discussion, debate and articulation of sensible solutions to issues of public policy. While others talk shaving cream, we seek to advance sensible and logical dialogue, across partisan lines.
Approximately 60 percent of our national revenue goes to service the national debt and to pay the costs associated with the actual running of the central government. Twenty percent of the remainder is wasted and frittered away into an economic black hole.
Twenty percent is then left for infrastructure, maintenance and societal expenditures. Clearly, this is an unsustainable path.
The proposed value-added tax (VAT) may well be necessary but clearly not at this time. The economy is still in the recovery mode and there are far too many Bahamians who are currently unemployed or under-employed. A new tax regime should only be introduced when the economy is buoyant and robust.
A simple sales or payroll tax would, I submit, be more manageable, less burdensome and would not create another level of unnecessary bureaucracy. There are already the mechanisms in place to administer the same: the economic division of the Ministry of Finance and NIB.
Every citizen and resident of this nation is a consumer, and the sales tax based form of taxation would impact everyone, not just a selected demographic element. You make a purchase of any sort and pay say five or six percent at the cash register and a receipt is generated. Once this is done, a copy of the folio is submitted along with the sales tax to the appropriate authority.
Relative to a payroll tax, a simple percentage, say, again, five or six percent is deducted from the wage or salary of all workers, across the board, and passed on to a special unit at the National Insurance Board.
These measures along with the strict collection of accumulated arrears of current taxes would be more than enough to service the current deficits and to actually stimulate the national economy.
One of the major reasons why we find ourselves in this economic challenge is because all of our recent ministers of finance have been lawyers or educators. Not a single one of our substantive ministers of finance over the past 40 years has been a trained economist or actually owned, operated or managed a "real" business.
They have all spent money like drunken sailors, and we are now reaping the whirlwind from the wind they sowed so recklessly. Even now we are saddled with individuals in the Ministry of Finance who don't have a clue as to how to revive an economy that is in the doldrums as they are relics of the past and live in a parallel universe. Local entrepreneurship needs to be encouraged and granted the relevant concessions.
Capital must be made available on easy and coherent terms by commercial banks and lending institutions. Unfortunately, we have not been educated to want to own businesses, but rather to seek a job. There are only so many jobs that are able to be created by government (the choice of many individuals) and the private sector is being stagnated by governmental red tape and bureaucratic impediments.
Some crow that The Bahamas is open for business, but we are far from it. To merely incorporate a simple company takes an inordinate amount of time and is prohibitively expensive for a start-up. Customs duties are already too high on importations and as we manufacture only a small number of the goods sold in our local economy, a large chunk of our working capital is expended, upfront, on imports.
With the introduction of VAT, some opine that customs duties will go down and/or be eliminated, but there is no concrete proposed legislative bill and/or set of regulations in the public domain to support this absolutely bogus contention. The politicians, again, would appear to have placed the cart before the proverbial horse.
We also have a huge underground economy that is not being regulated or taxed in the form of the web shop industry. Along our major road corridors, on a seasonable basis, one is able to see scores of businesses being operated with impunity.
Are they paying business license fees, NIB contributions and/or other related expenses? No. We have massive economic leakages, and no one seems to know how to plug up the hole in the dam.
The sad part about this whole mess is that the politicians and their senior advisors who got us into the same are either long dead, on pension for life or are marking time until they finally retire. They and their families are financially fixed for life while the rest of you all are saddled with a national debt that will never be paid off in your lifetimes.
Buccaneer politics will be the death blow to our economic recovery except we come to our collective senses and demand more from the political directorate. The PLP is grasping at straws while the FNM is lost in space. The doll house DNA is totally irrelevant and devoid of sensible ideas. These dysfunctional parties must consult more widely with the business and professional communities completely divorced from the destructiveness of overt partisan politics. Both of the major political parties spent money like there would never be an end to the good times.
The leader of the DNA was creased right up in the Ingraham Cabinet when massive sums of money were being spent on pie-in-the-sky projects and political cronyism. To now come and shed crocodile tears while wringing his hand, a la Nero, is totally unacceptable.
To God then, in all of these things, be the glory.
-- Ortland H. Bodie Jr.

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