Bahamas Government Reveals Tax-Free Budget To Parliament

  • The Bahamas government has introduced a tax-free US$3.54Bn budget to Parliament, continuing its efforts to enhance the nation’s economic stability and growth.
  • Prime Minister Davis highlighted that the estimated revenue for the budget excludes a US$75Mn reimbursement from the Grand Bahama Port Authority (GBPA), noting that the total amount due from the GBPA is US$357Mn. The total expenditure is projected at US$3.61Bn, with recurrent expenditure accounting for US$3.27Bn and capital expenditure for US$344.5Mn.
  • The government’s revenue philosophy focuses on lowering the overall tax burden for ordinary Bahamians while improving tax efficiency and enforcement. Consequently, the new budget does not introduce any new taxes but includes adjustments to fees for government services where costs have increased.
  • Further, since prioritising tax efficiency, the revenue-to-GDP ratio has increased from 18.7% at the start of the administration’s first term to 20.4% in the 2022-23 fiscal year. The government aims to achieve a medium-term revenue target of at least 25% of GDP.
  • The fiscal deficit is estimated at US$69.8Mn, or 0.5% of gross domestic product (GDP), while the primary balance shows a surplus of US$586.9Mn, or 3.9% of GDP. The debt-to-GDP ratio is projected to be 75.3% by the end of the 2024-25 fiscal year.
  • Further, Prime Minister Davis announced the official launch of Cloud Bahamas, a new Government Enterprise Resource Planning (ERP) Application designed to modernize public service operations. This ERP system is set to improve financial reporting, including a public sector income statement and balance sheet, and will be fully implemented by January 2025.
  • Davis said that the fiscal package prioritizes enhancing the well-being of Bahamians and creating opportunities, increasing revenue from foreign direct investment, addressing Value-Added Tax (VAT) underperformance on real estate transactions, and developing an equitable and competitive business environment. He also shared that supporting new opportunities for Bahamians and incentivising participation in a growing economy remain key policy priorities for the government.

 (Source: Caribbean News Weekly)