Sat. Jul 20th, 2024

The government of the Bahamas announces a tax-free budget to Parliament

By Vaseline May30,2024

The government of The Bahamas has introduced a $3.54 billion tax-free budget to Parliament, continuing its efforts to improve the country’s economic stability and growth.

Prime Minister Phillip Davis emphasized that this budget package builds on measures taken since his government came to power in 2021.

Breakdown of income and expenses

Prime Minister Davis emphasized that the estimated revenues for the budget exclude a $75 million reimbursement from the Grand Bahama Port Authority (GBPA), noting that the total amount owed by the GBPA is $357 million.

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Total expenditure is estimated at $3.61 billion, with recurring expenditure at $3.27 billion and capital expenditure at $344.5 million.

Budget deficit and economic indicators

The budget deficit is estimated at $69.8 million, or 0.5 percent of gross domestic product (GDP), while the primary balance shows a surplus of $586.9 million, or 3.9 percent of GDP.

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The debt-to-GDP ratio is expected to reach 75.3 percent by the end of the 2024-2025 financial year.

Launch of Cloud Bahamas

Prime Minister Davis announced the official launch of Cloud Bahamas, a new government Enterprise Resource Planning (ERP) application designed to modernize public services.

This ERP system aims to improve financial reporting, including the public sector profit and loss account and balance sheet, and will be fully implemented by January 2025.

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Commitment to tax efficiency

The government’s revenue philosophy is aimed at reducing the overall tax burden on ordinary Bahamians while improving tax efficiency and enforcement.

The new budget does not introduce new taxes, but does include adjustments to reimbursements for government services whose costs have increased.

Sales growth and future targets

Since tax efficiency was prioritized, the revenue-to-GDP ratio has risen from 18.7 percent at the start of the government’s first term to 20.4 percent in the 2022-2023 financial year.

The government aims for a medium-term turnover target of at least 25 percent of GDP.

Key policy priorities

Davis said the budget package prioritizes improving the well-being of Bahamians and creating opportunities, increasing foreign direct investment revenues, addressing underperforming VAT on real estate transactions and developing an equitable and competitive business environment .

He also shared that supporting new opportunities for Bahamians and encouraging participation in a growing economy remain key policy priorities for the government.

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