by The Oracle
Posted as a comment to this recent blog but it raises some interesting points so we thought we should post it as the blog for today.
The sad thing really is that VAT has been selected (Some years ago BTW) to replace the tax revenue system that has to go away: Import Tariffs.
It started out as simply as that. Considered Barriers to trade, the imposition of Import taxes, sometimes used to protect local products, are considered discriminatory to the products of other nations, our supposed trading partners.
The Bahamas however, really have few products to protect. The products we do produce are certainly not produced in sufficient quantity to supply the local market. Unfortunately for the locals, these Changes come amid serious Budget deficiency increases caused mainly by continued Government overspending, over promising and waste every single year for decades.
The Government however, is convinced these Tax regime changes will yield increased revenue, and so with external Organizational pressure mounting, are eagerly anticipating increased revenue, hurrying towards it like we have never seen Government hurry before. In Reality they are more walking backwards really fast! It is a shame Government administrations have not been more open and honest with the people, but, I suppose it is difficult to promise them the world, then have to explain why it isn't happening as promised. I mean the real reasons, not the pass the buck response.
Unfortunately "we the People" have not exactly been diligent in our study, awareness or even realization of our new reality. This is not new. This has been a scheduled series of benchmarks to be met and committed to for 20 years of negotiations. We have missed many deadlines, begged off on no doubt, especially during our "Political season". Hard to negotiate when your stumping for a year. While most other nations have literally dozens and hundreds of personnel involved in the literally hundreds of different aspects of these "trade agreements", which are really akin to forced compliance from external ex territorial entities, we have had but a handful, who won't level with us.
By the way, the reason some specialty/individual taxes were eliminated, is because if left in place they would amount to double taxation, if VAT was simply added. A no no under WTO rules.
Like it or not, the Bahamas is subject to "trade liberalization" in both goods and services.
So far, we have seen only the changes concerned with goods, save the liberalization of the restaurant and entertainment sectors in the 2010 Budget Communication. Wait 'til the rest get opened up.
Bahamians are going to be marginalized in their own country, partially their own fault, but mainly through the actions of their elected leadership over the last 30 years.
Oracle, your use of the future tense (‘are going to be ‘) suggests that heretofore this social phenomenon has not been happening.
For some of us, the marginalisation was the ‘last straw’ …
I stand corrected S3S, however I was speaking of the specific additional marginalization via Trade Agreements and Ex-territorial “Authority” being exerted upon us.
Our pre-existing marginalization has up to this point been Self generated/inflicted.
We eat our young, squash initiative.
Seriously, long standing oligarchies and general nepotism in such a small population has had the effect of “driving out” those who could be called the best and the brightest, who simply seek greater opportunities internationally, having been exposed to “other sytems/viewpoints”.
Not to say those who are still here are stupid by any means! (I’m still here, but with grossly reduced expectations)
However, one who remains either seriously lowers their expectations, or fights like hell against rampant gross stupidity and or special interests and blockages at every turn.
Unless they are connected.
A good example in the trades/retail sector would be the oft heard refrain given when looking for tools products or not so specialty equipment:
oh, our people don’t use those
Oh the Government won’t let/license you (to) do that,
Oh, it would cost too much to get it here,
Oh, they would never sell.
oh, the duty is too high,
no, we don’t need those, they won’t work here.
We are on average 10 years behind the first world in modern tools and techniques, materials, in some cases 20 years.
Most businesses here have yet to adopt “Just in Time inventory”, which maximizes Gross return on Inventory.
We are for the most part still “buy in bulk, buy cheap”
“It’ll sell eventually”
Inventory/shipping logistics, at best a hobbled together system morphed over decades in to labor intensive “rube Goldberg” scale machinations
We are in for a harsh wake up call, which we have brought upon ourselves.
I got ya, Oracle …. the list of Bahamians ‘competing’ successfully in advanced economies is growing steadily.
As for the effects of any further dictates from the idiots masquerading in the WTO, please see my earlier Blog: http://www.weblogbahamas.com/blog_bahamas/2012/10/the-bahamas-and-the-wto-a-marriage-made-in-heaven-or-hell.html
I think that all these treaties and inter-jurisdictional Pow Wows evolved through good intentions, over at least 50 years, and to address specific legitimate needs to co-operate and counter inter-jurisdictional Criminal activities etc. Unfortunately, to quote a line from a movie,
“things have gone horribly wrong, haven’t they Inspector”
I have been in a few of these meetings and quite frankly, the discussions take no consideration of the effects, nor adjustments people and sectors will make in response. The reality and fluidity of the economy for example. In other words, Armchairing a purely static theoretical approach based on bad theory to boot.
Over the last say 20 years, I believe a visible rift/duality of Civil service vs Political will is evolving, and the bureaucrats are winning.
The political are too distracted by pandering/ self preservation and the 5 year cycle.
Civil servants are holding the power, and have been disconnected from the rules, courtesy of the politicians disregarding rules themselves.