The Bahamas

1
The Bahamas

• Presentation
• at
• Bay Gardens Hotel
• Castries, Saint Lucia
• 24th July 2006

2
Caribbean Organization of Tax Administrators

• Innovative Tax Policy for a Developing Economy
• The Bahamas

3
Summary of Revenue
4
Tax Policy

• Consider as part of fiscal policy
• Level of capital and recurrent expenditure
• Role of the Cabinet
• Short, medium and long term benefits

5
Projected Annual Deficit

• Policy decision on
• Recurrent Expenditure
• Capital expenditure
• Recurrent Revenue
• Borrowing / Loans / Grants

6
Annual Budget Communication

• Announcement of Governments programme for the
  next fiscal period
• Announcement of any new taxes or amendments to
  existing tax rates
• Incentives

7
Absence of Standard Mechanism

• No income tax
• No Corporation Tax
• Policy is therefore not related to varying
  factors such as deductables, allowances or
  credits

8
Enhancement in administrationof existing revenue
legislations

• Improvements to administrative mechanism
• Reduction in leakages
• Improved accountability and transparency

9
Administrative Measures

• Implementation of A Trade Information Management
  System (TIMS) in the Customs Department
• (Identifies situations where Customs
  revenue might be at risk)
• Amendment to the Stamp Act
• (Close the loopholes for tax avoidance)

10
Administrative Measures (Contd)

• Amendment to the Business Licence Act
• (Temporary Business Licence)
• Bank and Trust Company Fees
• (Fees now based on Volume of assets )
• Passenger Tax
• (Departure Tax added to cost of ticket)

11
Reporting Format

• Daily report
• Monthly reports
• Adjustments to previously approved expenditure

12
Enhancemet to systems

• Cash receipting
• Improved technology
• Payments by credit cards
• Development of E-Government

13
Taxpayer Services

• Improvements to availability / convenience to pay
• Simplification / clarification of documents and
  forms
• Special arrangements e.g Real Property Tax

14
Use of Legislation

• To enhance
• Administration
• Acceptability
• Adequacy and stability

15
Enforcement of Compliance

• Engagement of Revenue Compliance Officers
• Undertake analytical work
• Equip policymakers with data by which informed
  decisions could be taken

16
Investment Incentives

• Exemption for capital projects designed to
  stimulate economic activity
• Direct employment
• Entrepreneurial opportunities

17
The Way Forward

• Less dependant on Customs duty
• Feasibility of introducing VAT
• Report by the IMF
• Study by Crown Agents