Bahamas Blog International
Living below the poverty line in The Bahamas
Related to country: Bahamas
Poverty, VAT and the PLP’s promises
The Nassau Guardian Editorial
Forty-three thousand people in The Bahamas were living below the poverty line around this time last year, according to data from the Department of Statistics. Nothing that has happened since suggests this number might be any lower today; in fact, it has probably continued to rise steadily.
This means that the ranks of the utterly destitute among us, those who must eke out whatever kind of existence they can on less than $12 a day, account for around 13 percent of the population of this country. And this is not taking into account the many more thousands, probably tens of thousands, who struggle to survive just a hairsbreadth above the poverty line, so close in misfortune to the “official poor” that there is no appreciable difference in their circumstances.
It is no secret that the places where such people live are the principal incubators of violent crime, domestic and child abuse, juvenile delinquency, teenage pregnancy and many of the other social ills that increasingly threaten to tear this society apart at the seams. It is also common knowledge that the governing Progressive Liberal Party (PLP) represents the majority of these areas in Parliament, many since the time of majority rule. Over those many years, the promises upon promises meted out at election time – of employment, security, proper sanitation and all the other basics of civilized existence – have amounted to those areas remaining in poverty.
The revelation of a considerable rise in the level of poverty, around 3.5 percent over the last survey in 2001, comes against the backdrop of this legacy of unfulfilled promises and follows closely on the heels of several other important pledges broken by the PLP in its current term, among them that it would create 10,000 jobs upon coming to office.
Two years on, the vast majority of these jobs have yet to materialize, while the government’s failure to fulfill another campaign assurance, that of an effective mortgage relief scheme, is only adding to the ranks of the desperate all the time.
And now, at this moment, faced with such a troubling situation, the government has announced that it will impose value-added tax – the impact of which, it admits, will hit the poor the hardest – at a rate of 7.5 percent, without any corresponding reduction in import duties to ease the blow.
Minister of State for Finance Michael Halkitis has said the cost of living is expected to rise by four percent as a result.
There is no cause for worry, however, according to Social Services Minister Melanie Griffin. She said the government has plans to mitigate the impact on the poor and will be able to “handle whatever fallout” may result from the implementation of VAT.
The good minister must forgive Bahamians if her assurances do not ease our collective anxiety for the future. Our skepticism is nothing personal, being based solely on the fact that not all promises made by her party are fulfilled.
July 09, 2014
The role of the media in today’s Bahamian society
Related to country: Bahamas
The role of the media in today’s Bahamas
“The media’s the most powerful entity on earth. They have the power to make the innocent guilty and to make the guilty innocent, and that’s power. Because they control the minds of the masses.” – Malcolm X
Recently there has been considerable commentary from many quarters of our society about the media and its role in today's Bahamas. Politicians in particular – and from both sides of the aisle – have taken to critical commentary about media coverage depending on the story and what the reporters say about them.
Therefore this week we would like Consider This... What is the role of the media in today's Bahamas, and are there deliberate attempts to quiet the fourth estate?
The fourth estate
The term “the fourth estate” is derived from the medieval “estates of the realm”, of which three were formally recognized: the clergy, the nobility, and the commoners. Each “estate” had a distinct social role and a certain level of power and influence.
By the middle of the 19th century, people began referring to the press as a fourth estate, referencing the fact that most parliaments and other houses of government had an area set aside specifically for use by the press, which highlighted that the press is a distinct group within the larger framework of the realm. Several historians credit the coinage of the term “fourth estate” to Edmund Burke, who is said to have used it when discussing the French Revolution, although the 19th century author, Thomas Carlyle, popularized the term.
In modern societies, the media is often called the fourth branch of government (or "fourth estate") in addition to the executive, legislative and judicial branches. It is generally accepted that the most important role of the fourth estate is to monitor the political process in order to ensure that those in the other three branches do not abuse the democratic process. Today, the fourth estate includes the public press, collectively encompassing journalists, photographers, television broadcasters and radio announcers, among others.
The role of the media
Few will argue against the idea that access to information is essential to a healthy democracy and that the press is important for at least three reasons. First, it reports the news without bias, as facts are presented as they are. Secondly, it ensures that citizens are able to make responsible, informed choices on matters of national importance rather than acting out of ignorance or misinformation. Third, the media serves a "checking function" by disclosing whether elected representatives have upheld their oaths of office, fulfilled their campaign promises and carried out the wishes of those who elected them.
Some persons become very sensitive about media coverage because it plays such an important role in the fortunes of political candidates, elected officials, dignitaries and national issues. This is where the role of the media can become controversial. News reporting is supposed to be objective and balanced, but journalists are people with feelings, opinions and preconceived ideas. It is sometimes felt that journalists either allow their biases to creep into the reporting of the news or report only news that is negative to the side they are biased against, ignoring news that may be equally negative about the side they support.
In addition to its responsibility of “reporting the news”, the print media also produces an “op-ed” section, where opinions and editorial commentary are expressed by the editor, columnists or the general public, the latter often in the form of letters to the editor.
Protecting freedom of the press
The media has immense political and social power, because it can be used to shape societies while imparting news of note and commentary of interest. Because of its importance, many countries have embedded press freedom provisions in their national constitutions. Other nations have enacted laws to protect the rights of the press, ensuring that citizens have access to reports on matters of interest.
Because of the importance of the fourth estate in society, most members of the media abide by certain professional and personal codes of ethics. Many journalists attempt to cultivate an air of neutrality, focusing on reporting the issues as they are, so that people can judge the facts for themselves, while others focus on offering commentary and analysis from the perspective of a particular position. Journalists are careful, as a whole, to protect the integrity of the press, protecting sources, verifying information before publication and using a variety of other techniques to convey a trustworthy appearance to the public, encouraging people to put their faith in the media.
The fourth estate in The Bahamas
For many decades, there has historically been a tug of war between the media and politicians in The Bahamas. In the early days of party politics, dating back to the early 1950s, the two established daily newspapers were seen as biased in favor of the white oligarchy, which sought to continue the established conservative social and political order, often denigrating the fledgling Progressive Liberal Party (PLP). This prompted some in the PLP to form the Bahamian Times newspaper, in order to ensure that the PLP’s position was clearly delineated to the people of The Bahamas.
It is fair to say that while the editorial slant of The Tribune has not radically changed, the same observation cannot be made of The Nassau Guardian. More recently, the editorial slant of The Nassau Guardian has been more balanced, equally criticizing the PLP, the Free National Movement and the Democratic National Alliance – taking each to task as the need arises. It is wrong for persons in public life to conclude that the newspapers are deliberately “out to get them” because the media reports factual information about the conduct of persons in public office. Facts and sometimes foolish statements emanating from politicians are stubborn things; they are what they are, and no amount of complaining about their reporting will change the facts or the foolish statements.
For politicians to believe that they are immune from public scrutiny for their actions and statements is a mistake. The media has a sacred responsibility and duty to inform the public about the conduct of all persons who hold public office, regardless of their party affiliation.
Imagine what would have happened if Woodward and Bernstein did not investigate and report on the Watergate break-in, which resulted in the resignations and convictions of numerous high level, powerful politicians, who abused their offices and broke the law, as well as the resignation of a corrupt U.S. President. Woodward and Bernstein did not deliberately set out on a course to destroy the lives of those who broke the laws. Their primary objective was to critically investigate, analyze, and report the facts, wherever they led. The same can be said for Daniel Ellsberg’s revelations relative to the Pentagon Papers, Julian Assange regarding WikiLeaks and Edward Snowden concerning the excessive NSA abuses and invasion of privacy of countless innocent citizens in many countries.
All of our politicians have to come to terms with the vitally important role of the fourth estate in the development of our country and should recognize that the media’s role is to expose incompetence, corruption, malfeasance and breach of the rule of law that governs us. Members of the fourth estate should conduct themselves without fear or favor, oblivious to who the persons are that they are investigating. Politicians should not be surprised when the media calls attention to their abuses of office or power, their arrogance and excessive sense of entitlement. Politicians are servants of the people and should conduct themselves accordingly; otherwise they should expect that the fourth estate will expose them.
Instead of vilifying the press, progressive politicians, distinguished persons and private citizens alike should willingly engage the media in order to present their account of events or their side of the story. It benefits no one to attack the media unless it engages in defamatory reporting, in which case the aggrieved parties can and should seek legal redress before the courts.
As we mature as a nation, we will find that it is far better to engage the press in meaningful dialogue, to have frank and open discussions with them and to explain one’s actions and decisions on their merits. Not only will it demonstrate the constructive power of communication, this kind of honest and straightforward interaction will also go a long way in building the strong democracy envisioned by our forefathers, a democracy that will be the backbone of the robust and advanced society we all wish to see.
• Philip C. Galanis is the managing partner of HLB Galanis and Co., Chartered Accountants, Forensic & Litigation Support Services. He served 15 years in Parliament. Please send your comments to firstname.lastname@example.org.
June 23, 2014
Levy Value-Added Tax (VAT) on all forms of gaming in The Bahamas
Related to country: Bahamas
By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas:
The Bahamas should levy Value-Added Tax (VAT) on all forms of gaming, with consultants urging it to follow New Zealand’s lead by taxing players through the gross sum bet.
Dr Don Brash and John Shewan, in their May 6 report to the Government, called on the Christie administration to abandon plans to ‘exempt’ casino gambling and all other forms of gaming - including potentially web shops - from VAT.
They argued that it was “difficult to justify” exempting gambling from VAT when the likes of food and essential services would be taxable, even if casinos were already subject to their own specific taxation.
Messrs Brash and Shewan added that levying VAT on gaming would also simplify reporting requirements for Atlantis, Baha Mar and Resorts World Bimini, as their different services would not be subject to different tax treatments.
Under the initially proposed 15 per cent VAT model, casino hotels would have been unable to ‘net of’ VAT paid on their inputs in proportion to the percentage of their business accounted for by casino gaming.
In other words, if casino gaming was 30 per cent of annual turnover, a resort would be unable to reclaim or ‘net off’ 30 per cent of the VAT paid on its inputs.
“The draft Bill exempts games of chance, gambling and lotteries from VAT, presumably on the grounds that these activities are already subject to the gaming tax,” the New Zealand consultants said of the Bahamian legislation.
“New Zealand does not exempt gambling activities from VAT. Special provisions of the New Zealand Act deem supplies to be made for VAT purposes when amounts are paid to participate in gambling.
“The practical effect of these provisions is that VAT is imposed on the gross amount bet, less prizes paid out. VAT is payable in addition to casino duty and a problem gambling levy.”
It is unclear whether the Government will adopt these recommendations, and the reaction from those in the private sector is uncertain.
Neither the hotel casinos or web shops (if legalised) will take kindly to paying more tax, especially as they already have their own specific tax structures.
The hotel/casinos, though, will likely welcome the opportunity to recover all their VAT ‘input’ payments, with the burden shifting to players rather than ‘the house’.
Web shops will likely be more unhappy with this proposal, since they have already lobbied for the Government to tax their profits rather than their customers.
The Christie administration has projected that it will earn 0.14 per cent of GDP, or around $11-$12 million, from taxing the web shops this year.
That number is relatively small, likely because only a small number will be licensed, with the taxes probably including a Licence fee; performance bond and 15 per cent levied either on gross or net winnings.
Messrs Brash and Shewan, meanwhile, concluded: “The Mission suggests that the Bahamas give consideration to bringing gambling into the VAT.
“It is difficult to justify exempting gambling if food and essential services are taxable, (one justification may be that the industry is already subject to the gaming tax, but arguments can be made that a consumption tax is justified on top of that).
“A further advantage of subjecting gambling to VAT is substantial simplification of filing of returns by hotels and other businesses involved in the supply of gambling services.”
Elsewhere, the New Zealand consultants said they had been advised that the Central Revenue Agency’s design was “90 per cent complete”.
Some 15 guidance notes had been prepared to deal with how VAT would impact certain industries, and how the transition to the new tax will be handled.
“The guidance notes are of a reasonable standard,” Messrs Brash and Shewan said. “They are brief, however, and will most likely require expansion before being released to address questions that the draft legislation is likely to prompt.
“Further, based on the New Zealand experience, considerable kudos and buy- in is likely to be achieved by having these guidance notes reviewed and commented on by one or two key players in industry groups before they are finalised.”
June 05, 2014
Value-added tax (VAT) and the founding principle of the Progressive Liberal Party (PLP)
Related to country: Bahamas
‘VAT violates PLP principles’
Moss says VAT will worsen poverty
By TRAVIS CARTWRIGHT-CARROLL
Guardian Staff Reporter
Nassau, The Bahamas
The implementation of value-added tax (VAT) will go against the founding principle of the Progressive Liberal Party (PLP) to protect the poor and vulnerable in the country, Marco City MP Greg Moss suggested last night.
“I fear sometimes that we are missing one very basic point that the average guy on the street is not missing; that it does not benefit the country to replace the Bay Street Boys with the Sunshine Boys,” said Moss during the 2014/2015 Budget Debate.
“It doesn’t benefit the country to take rich white people and replace them with rich black people.
“What benefits the country is to create opportunities, which is what the PLP has always been about — education, housing, lending, everything.
“That has always been the drive of the PLP.
“But to drive people further into poverty is not the role of our party, as I see it.”
The government intends to implement VAT on January 1, 2015 at a rate of 7.5 percent. The government had originally proposed to implement the tax on July 1, 2014 at a rate of 15 percent.
Moss previously said he does not support VAT as it will hurt the lower class unfairly.
He said if the PLP implements VAT it would lose the next election.
He also said previously the government should consider alternatives to VAT and voiced support for income tax.
During his contribution last night, Moss referenced former PLP Leader Sir Lynden Pindling and his famous ‘bend or break’ speech in Grand Bahama in 1969.
Quoting Sir Lynden, Moss read: “Bahamians are nevertheless still the victims of an unbending social order, which, if it now refuses to bend, must be broken.”
Moss continued, “The thought that comes to my mind is you can easily substitute in that, “economic” to “social”, and it speaks today.
“Bahamians are nonetheless the victims of an unbending economic order, which, if it now refuses to bend, must be broken because we cannot escape the fact that we are talking about putting the greater burden on the same people.”
Moss asked how the government can reform its fiscal house “and come to the conclusion that we do business as usual and tax the poor, the working class and the middle class”.
“That is my dilemma,” he said.
“That is what I keep saying is a PLP dilemma. Our answer should be different than that.”
Moss pointed out that VAT was originally proposed under the Ingraham administration and suggested that if the PLP held different values from the FNM it would not consider it.
“That is not an endorsement of it,” he said.
“That is something that should make us stop and wonder whether it is right.
“That is something that should make us stop in our tracks and say, ‘Hold on, how is it that we have different political philosophies and we are coming to the same conclusion?’
He added, “How is it that our bases are different and we keep coming to the same conclusions?”
Moss has said that Bahamians will suffer under VAT.
Out of touch
Moss also suggested that many politicians are out of touch with the experiences of ordinary Bahamians.
“We do not feel the same pain, and this is what I experience every day,” he said.
“I say to people, look at the guy coming to you to wash your car.
“Look at the guy who is saying, ‘I do not have a job to feed my family tonight.’ He does not crave respect from his wife or his woman or his children any less than we do.
“He wants as much as we want, to be able to take money home and take care of his needs.
“Look at the woman who is working all these jobs.
“I’ve had a constituent say to me, ‘I have had to do things I am ashamed of to feed my children.’ A woman. We know what that means.”
Moss said the government should think carefully before implementing VAT, as it will affect the lives of many Bahamians.
June 05, 2014
It would be impossible for The Bahamas Government to implement Value-Added Tax (VAT) in the face of widespread private sector opposition ...says the Coalition for Responsible Taxation economist
Related to country: Bahamas
By NEIL HARTNELL
Tribune Business Editor
Nassau, The Bahamas:
The Tax Coalition’s newly-hired economists will start work this week, with one of its co-chairs yesterday suggesting it would be impossible for the Government to implement Value-Added Tax (VAT) in the face of widespread private sector opposition.
Robert Myers, speaking in the wake of the Coalition for Responsible Taxation’s decision to hire Oxford Economics to conduct dynamic economic modelling of all potential tax reform options, said rushing VAT into existence on July 1 would only “backfire” on all stakeholders.
And he agreed with Tribune Business’s suggestion that, with just over four months to go, it was virtually impossible from a practical perspective for the country - both private sector and the Government - to implement VAT by July 1.
Referring to the Family Islands specifically, Mr Myers said many groups there did not know “what the hell this is about”, while small businesses that exceeded the VAT registration threshold needed financial and technical assistance to meet their compliance obligations.
The Tax Coalition co-chair, though, did indicate that VAT at a lower rate than 15 per cent would be more palatable to businesses and consumers - something also suggested by Ryan Pinder, minister of financial services, in his Mid-Year Budget presentation.
Oxford Economics, according to a schedule seen by Tribune Business, is due to present its final report in the week beginning May 5, 2014.
The consultancy firm is currently engaged in a review of all available VAT documents and literature, and will next week begin consultation with both the private and public sectors - something scheduled to last two weeks.
Simultaneously, Oxford Economics will also start comparative VAT research and its dynamic economic modelling processes, in a bid to forecast the impact this tax - and other reform options - will have on key Bahamian economic indicators, such as growth and employment, going forward.
The preliminary results and key findings from their work will be presented between the seventh-ninth weeks of its contract, with a draft report presented in the week beginning April 28. Oxford Economics’ final report will then be presented the following week.
Mr Myers, in an e-mail issued on Friday, February 21, confirmed: “The BCCEC Coalition for responsible taxation has retained the services of Oxford Economics to conduct dynamic economic modelling that will evaluate the effects VAT and a number of other alternative taxes will have on the economy and, in particular,r our levels of industry competitiveness locally and regionally.
“It is hoped that the modelling and reports derived from this research will allow the Coalition to make recommendations to the Government on means of additional government revenue while maintaining positive economic growth.”
Oxford Economics is well-known to the Government, having performed economic impact analyses for numerous major investment projects in this nation, including Baha Mar’s $2.6 billion Cable Beach expansion.
Mr Myers said the Coalition’s choice met “no objection” from the Government when it submitted the names of candidates to it.
He added: “In an effort to remain collaborative with the Government, we also provided a copy of the RFP that went out to the economist. As has been publicised, the Government has agreed to support our study and we have, in fact, already moved the schedule forward by a few days.”
Speaking to Tribune Business from abroad, Mr Myers said the study, which will examine both VAT in its proposed and modified forms, and other options such as a payroll tax, would focus heavily on the effects for industries such as tourism, construction, the wholesale/retail sector and services in general.
The Oxford Economics study will be completed less than two months before the July 1 VAT implementation target and, when asked whether there would be enough time for its results to influence government thinking, Mr Myers replied: “I have to say yes, given when the Prime Minister has said.
“We’re going to do it anyway. Even if they pass it [VAT legislation] but don’t enact it, I can’t imagine they’d want the business community against it. It doesn’t make any sense to do it with the business community against it.
“I don’t see any upside in rushing it, that’s for sure. That’s just going to backfire.”
Mr Myers said his “sense” was that while the Government would like to implement VAT by July 1, they would instead wait, given the opposition and angst it was causing.
He added, though, that the Bahamian private sector might be more accepting of VAT if it was introduced at a lower rate than the proposed 15 per cent.
“Clearly, at least from my opinion, nobody’s loving VAT at 15 per cent as proposed,” Mr Myers told Tribune Business.
“If they went with VAT, a lot has to be done to get it to the point where the business community is accepting of it, and that’s in the implementation, the ongoing administration and amount it would be.”
The Tax Coalition co-chair said Oxford Economics was “good to go” with its economic modelling, with the study timetable having moved forward three to four days.
“It’s important for the country to do the right thing, and hopefully the leadership will appreciate that,” Mr Myers added. “I get the sense they do.
“There’s a lot of noise in the market, but I feel they’re [the Government] anxious to see the results and work things through with us.
‘It’s frustrating for us at times when certain ministers and civil servants say certain things, but hopefully they’ll do the right thing in the end.”
The clock also appears to be moving against the Government’s VAT implementation deadline, with just over four months left to July 1 and much left to be done - both inside government and the private sector - in terms of education and preparation.
The VAT legislation and regulations remain in draft form, and have yet to be signed off on by Cabinet, let alone passed by Parliament, while not even a draft Tariff Schedule has been released for public consultation.
Mr Myers yesterday agreed that July 1 seemed an impossible target from a practical viewpoint, adding: “The problem is, from what I can tell, that they [the Government] haven’t reached various Out Island groups.
“There’s a lot of country left that still does not know what the hell this is about. And there’s a tonne of small businesses in that [$100,000] threshold that do not have the capacity to do this.
“They have no understanding of this, and no capacity to do this. All these little guys, if the Government doesn’t help them get sorted, they’re not going to get sorted out themselves.”
Mr Myers estimated that just 20 per cent of the Government’s forecast 4,000 mandatory VAT registrants were large companies, with their small brethren needing software, IT and Point of Sales help.
He added that the Government, too, was beginning to recognise this issue.
February 25, 2014
|February 26, 2014 | 7:46 AM
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