Government Tax Hikes Angers Many

Bahamians Protesting New Government Taxes

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The list of Government taxes, proposed in the 2010/2011 Budget Debate are now laws which become effective July 1st, but not without protest from many Bahamians, ticked off at the hike in car registration fees among a laundry list of other increases.

 

Minister of State for Finance, Zhivargo Laing in an interview with Gems News Tuesday, however assured that it is not the government's intention to burden its citizens, during an economic depression, but to ensure The Bahamas remains economically viable for future generations.  

"The reality is, we presented the budget precisely to put ourselves in a position, so that we could cope and deal with a crisis if it occurs," Laing said.  

“We did not want to have the countries deficit taking place at the levels that it was taking place in the midst of the crisis, because we did not want to grow the debt at the rate that we had to grow it in the midst of the crisis, so we are clawing back to put ourselves in a position to respond to any disaster, natural or financial." 

Other increases that were implemented July 1st, included; the stamp tax on realty transactions which went up by two percent.  Hotel room tax increased by 10 percent, while the duty on items imported temporarily was increased from 7 to 10 percent for every three months stored in the country.  

A comprehensive tax system was also introduced by government on imported vehicles.  This fee structure also caused uproar in pockets throughout the country, which forced the government to revise the provisions of this particular act, before it became law. 

But Laing assured there is no need for alarm, and cleared up a widespread misconception that there was a single flat rate for importing vehicles.  

Laing explained, "We started with just two rates for motor vehicles and we now have three rates.  Vehicles that are 2000 cc or less will have a rate of 65 percent.  Those 2500cc will have a rate of 75 percent and then anything above that will have a rate of 85 percent."

Vehicle import rates are now based on a vehicle's engine size.

Refunds, he explained, will be given to individuals and businesses that were forced to pay a flat clearance rate before adjustments were made. 

“There were some adjustments made in terms of the timing of when rates were to be enforced and some provisions made for persons who would have imported vehicles between the 26th of June and July 1st, when the new rates come into effect," Laing said, " to the extent that commercial credit will be granted to the autodealers and refunds to the individuals that imported vehicles during that time."

Meanwhile, beer tax has also jumped and costs between domestic and imported ones, could soon be notable.  

The new rate on domestic production has increased from four to six dollars per gallon. 

National insurance contribution has also gone up, as well as airport departure tax fees which went up by five dollars. 

Bank transactions have also seen an increase by 10-cents.   

Another controversial tax hike, deals with an annual expense for many motorists, annual vehicle licensing.  Fees introduced are based on a vehicle's weight.  These licensing fees range between $50 and $300 dollars. 

Scores of motorist interviewed by Gems on July 1st, at the main registration department on Thompson Boulevard said, the increase was another expense many could not afford. 

Government,however, has allocated approximately $1.55 Billion for recurrent expenditure and more than $265 Million for capital expenditure, for the fiscal year.

According to Prime Minister, Hubert Ingraham, the government projects a $200 Million revenue increase for this financial period.  

Royanne Forbes-Darville