NASSAU, The Bahamas — The real property tax system suffers from a number of critical structural defects, and as result, annual revenues generated by the system fall significantly short of the amounts that should rightfully be collected, Prime Minister Perry Gladstone Christie said.
During the presentation of the 2012/2013 Budget Communication on Wednesday, Prime Minister Christie said the systemic deficiencies have been well documented.
“It is estimated that with administrative improvements alone, annual property tax revenues could be increased by almost 100 per cent over the next five years,” he said.
“The Government will pursue a comprehensive multi-year strategy and implementation plan to reform and modernise the real property tax system. An international expert has been engaged to help guide this process.”
Securing Excise Tax Revenues on tobacco products
The Prime Minister also noted that the proper control of tobacco imports and the collection of excise taxes due on such products is another area that is fraught with leakage.
“It is estimated that the widespread smuggling of tobacco products into the country costs the Public Treasury some $20 million annually in lost revenues.”
He said that as a means of instituting proper controls and securing excise revenues on tobacco products, the Ministry of Finance is in the process of finalising preparations, with the assistance of the Canadian Bank Note Company, for the introduction of Excise Stamps on all tobacco products.
Prime Minister Christie explained that the stamps will attest to the payment of excise taxes, facilitate audit and compliance activities to combat smuggling and secure an important source of Government revenue.
Bahamas Civil Aviation Flight Information Region (FIR)
The Prime Minister said the Government also intends to initiate negotiations with the U.S. Government in respect of the Bahamas Civil Aviation Flight Information Region (FIR).
“Currently, the U.S. Federal Aviation Administration exercises air traffic control over Bahamian airspace, from the Miami Air Route Traffic Control Centre.
“Despite the air navigation charges imposed by the FAA, The Bahamas receives no funds from thousands of aircraft which transit our airspace,” Prime Minister Christie said.
The Government will engage in negotiations on the FIR as a means of enhancing revenues in this area, he added.
By Llonella Gilbert
Bahamas Information Services