NASSAU, BAHAMAS – Despite repeated calls from the International Monetary Fund (IMF) to add income taxes to the country’s tax base, the government is not considering introducing an income tax, according to Minister of State for Finance Kwasi Thompson.
Commenting on the IMF’s recent declaration of consultation on Article IV, Thompson said: “We take our commitment to public finance sustainability seriously. This of course includes examining a number of tax reforms in order to create a broader and fairer system.
“The government has already committed to reviewing the recommendations of the Economic Recovery Committee (ERC) regarding the business licensing system and property tax. However, as mentioned earlier, the government is not considering introducing an income tax system. “
Thompson added, “In addition to tax reform, our primary focus is on immediate economic recovery and accelerating economic growth in the medium and long term.
“In accordance with our formulated plans, we will do this by investing in the development of small businesses. Building a resilient business ecosystem; Removing the barriers to doing business easier; Stimulating growth in strategic new industries to support economic diversification; and advance the national agenda for digital transformation and other structural reforms.
“We recognize that by focusing on accelerating economic recovery and seeking robust economic growth, we can put the country on a path to meet the additional demands caused by this period of economic turmoil without having to resort to significant additional taxes. “
The IMF has determined that the government’s short-term priority is “saving lives and livelihoods” and that it is “appropriate” to postpone the achievement of the national debt target of 50 percent of GDP for another two years.
According to the IMF, the national debt is expected to rise to almost 90 percent of GDP by 2021 and in the medium term will be more than 22 percentage points above the pre-pandemic level.