Minister Discusses Bahamian Tax Revenues At Customs Seminar

by Amanda Banks, Tax-News.com, London

02 October 2003

Speaking at the Customs Department Revenue Enhancement Seminar in Nassua earlier this week, Bahamian Minister of State for Finance James Smith emphasised the importance of increased efficiency in the tax collection activities of the Customs Department, which takes $600 million in revenues each year, accounting for 60% of all government revenues.

"That level of national responsibility must of necessity demand an equal level of dedication and competence if we are to successfully capture all of the resources due to the Government to carry out its mandate," commented Mr Smith.

The Minister suggested this could be partly achieved through the employment of the latest technology and software tools to increase the efficiency of the department, which also have the effect of cutting down on tax evasion.

However, it was also stressed at the seminar that the tax system will soon struggle to keep pace with growing government expenditure, and Secretary for Revenue Ehurd Cunningham argued the case for a Value Added Tax as an additional source of revenue.

This echoes the sentiments of Minister of Trade Leslie O. Miller who recently said that reorganisation of the country's tariff system under WTO rules (when the Bahamas assumes full membership) would deprive the government of a large slice of revenues. Mr Miller however, has expressed support for a simple form of excise tax rather than VAT which he argues would be costly to implement.

"The VAT tax is a very difficult and tedious tax, and is very costly to implement, and it goes into areas that The Bahamas may not wish to go into. In other words, the VAT tax is also a tax for services, the lawyers, the accountants, and what have you. It's a much more broad-based tax that would interfere in areas that have never been delved in before, and it could present some problems for us," the Nassau Guardian quoted Miller as saying recently.

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