NASSAU, BAHAMAS — A move towards a more equitable and redistributive tax system in The Bahamas is “overdue”, a recent United Nations analysis on this nation has found.
The United Nations Common Country Analysis (CCA) on The Bahamas suggested that not levying income tax is an “untenable” position to maintain in the long-run.
According to the report, while the government has made a substantial effort to increase its spending, especially through the introduction of value added tax (VAT) in 2015, it is still hesitant to levy income tax, either corporate or personal.
“The argument is that not levying an income tax is part of the country’s development strategy, but under the current circumstances, it seems untenable to maintain that position in the long-run,” the report stated.
“Revenue increased from 12.8 percent of GDP in 2013 to 16.4 percent in 2018, a substantial increase, but still a long way off from the average for Latin America and the Caribbean, which stood at 23.9 percent in 2018.”
It was pointed out that while the introduction of VAT may have expanded the tax base, it did so in a “highly regressive way, disadvantaging the poor and exacerbating existing inequalities”.