In the recent budget address, Prime Minister Perry Christie, referred to taxes collected at around 17% of GDP and he would like to raise that to 20% of GDP.

This got me to thinking again about the size of our GDP, that is said to be around $8 billion.

Investopedia defines Gross Domestic Product (GDP) as; "The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory."

So, as I've asked before, if The Bahamas GDP includes foreign transactions for hotels and financial institutions are they calculating the taxes collected on an inflated number?

What would GDP look like if those goods and services that are not "produced" here were removed? $4 Billion? $3 Billion?

That being the case the government might have already surpassed its goal of taxes amounting to 20% of GDP.

But another point arises. If they are collecting 17% of GDP in taxes based on a 40% collection rate, imagine what it would be if the taxman collected what is due under the existing tax regime.

If they collected say 60% -75% of taxes due would that surpass the 20% of GDP in taxes the PM wants, based on the current way GDP is calculated?

Seems so to me anyway.

Finally, would the country be in this mess if the taxman had collected what was due all these years, or would successive governments have spent that too and increased the debt even more based on potential receipts?