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Bahamas: “MORAL HAZARD”: Economist warns against govt’s real property tax forgiveness programme

NASSAU, BAHAMAS — A leading accountant cautioned against the possible “moral hazard” of effectively rewarding delinquent taxpayers through real property tax amnesty programs.

On Monday, Prime Minister Dr Hubert Minnis announced in Parliament that the government is providing Bahamian property owners with up to a 50 percent discount on real property tax arrears.

Gowon Bowe, chief executive officer of the Fidelity Group, told Eyewitness News: “There is moral hazard we have to be careful about creating and I have often heard persons say that if they run up bills or haven’t been paying, they are going to wait until a tax amnesty is put in place because sooner or later, the government is going to give some amnesty.”

Bowe further noted: “We have had similar amnesty periods multiple times in the past two decades and ultimately it is one that is somewhat contradictory in that it is rewarding delinquent payers by giving them a discount while there are persons paying on an annual basis and not receiving the same benefit.”

Minnis noted on Monday that for Bahamian property owners, the government will waive 50 percent of the total amount of unpaid arrears for more than 180 days on such property, including overdue tax and accumulated surcharges, where full payment of all amounts due and payable is made on or before May 31, 2021.

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