by Adrian Gibson

First published in the The Tribune under the byline, Young Man's View, here…

This week, the government also tabled the much anticipated Value Added Tax Bill in the House of Assembly. In doing so, a list of proposed changes to tariff and excise duty rates was disclosed, revealing a “pared down” list of VAT exempt services that does not include electricity, bread basket items and private healthcare.

Beginning January 1, 2015, proposed decreases in duty rates for numerous items will come into effect. Items like watches, suitcases and articles of jewellery will be duty free while various others – ranging from food to clothing – would see duty reductions ranging from five to 25 per cent.

According to Minister of State Michael Halkitis, this does not mean electricity costs will increase by the VAT rate of 7.5 per cent, nor will the tax wreak havoc on the poor since the government will establish mechanisms to mitigate this. However, I think that there are many Bahamians who would disagree with the minister and, if one listens to the talk shows, will continue to object vehemently to the application of VAT to already skyrocketing electricity bills.

Frankly, when one considers VAT, coupled with national health insurance and subsequent increases in national insurance, it is frightening to see that the government seems to be so disconnected from the realities of the ordinary citizenry to believe that Bahamians could possibly afford further increases to their electricity costs and, even more stunning, increases on bread basket items that are already exorbitantly priced.

At this rate, the poor can only become poorer and the levels of poverty can only increase. Even more, the Department of Social Services budget, which saw a mere increase of some $350,000 in the July 1 budget, will hardly be able to provide relief for those in lower income levels.

I think that the government’s further imposition of a 7.5 per cent VAT on insurance premiums will lead to many more Bahamians not being able to afford auto, health and property insurance. Frankly, the police and road traffic department’s statistics would show that a large number of Bahamians are already traversing our streets without vehicular insurance, due in part to them not being able to purchase insurance packages as it currently is set-up, because corrupt road traffic officers licence these vehicles without insurance and/or because the law is selectively being enforced or hardly being enforced at all.

Generally, it is felt that Bahamians are, by and large, already without insurance or under-insured. Insurance is seen by some as something reserved for the more privileged among us, as many Bahamians simply cannot afford the premiums … yet the government seeks to crazily cause there to be increases in insurance premium prices. By the way, since my varied insurance carriers have already been raising my insurance rates, one would like to know more about the standard that they are using to justify these increases? What is the Insurance Commission doing as it stands?

The government specifically identified life insurance and annuities as products that will be treated as VAT ‘exempt’, meaning that health insurance, as well as the property and casualty variety, will be taxable at 7.5 per cent. According to the government, although VAT will be introduced in January, insurance companies will be allowed a grace period as health, property and auto insurance policies will be hit with the 7.5 per cent VAT levy on June 30, 2015.

One wonders how many employers will now drop their insurance coverage for their employees, which for many of them might have been the only form of insurance they had?

The vast majority of Bahamians are unable to purchase homes, so many more Bahamians will now be unable to afford, and access, mortgages and various types of investment products that require some form of insurance cover?

Transitioning a bit, one knows that the private healthcare sector is a relief valve for many who want prompt, quality care for either themselves or their families. The government has made that more difficult by taxing health insurance and private healthcare in what seems to be a deliberate attempt at pushing people towards a public healthcare system that we all know lack the capacity and the infrastructure to deliver great service in a timely manner.

What’s more, whilst all this is being done, I find it idiotic that the numbers and gaming houses are all exempt from VAT. This speaks to the priorities and is perhaps representative of a conflict of interest, a measured scheme to force more Bahamians in the government’s version of health insurance. If higher premiums are applied to private healthcare – and many of us pay high enough insurance premiums as is – a number of people who would have otherwise been able to afford a private physician will shift to public healthcare … and wow oh wow, the government appears to be stalled and unable to even outfit, staff and open the critical care block in a timely fashion as is.

The VAT public education campaign must be started immediately, with credible professionals at the helm