The Bahamas is projecting a 14.1 per cent increase in the economy at current prices for financial year (FY) 2021/22 with its Acting Financial Secretary, Marlon Johnson positing that by that the economy will regain 80 per cent of its pre-COVID capacity by June 2022.

The Bahamas finance ministry’s top official is predicating his assessment on key taxes, which are forecasted to rise by a similar magnitude. In fact, the 2021-2022 revenue forecasts project a 51.5 per cent year-over-year increase in real property tax collections, together with a 77.5 per cent hike in taxes paid by the web shop gaming industry.

These increases have helped to inform the national revenue target of $2.244 billion for 2021-2022 financial year. Zhivargo Laing, minister of state for finance during the 2007-2021 Ingraham administration is among those suggesting that the 2021-2022 budget’s revenue projections are “optimistic” given the extent of the economic and fiscal crisis produced by the twin blows of Hurricane Dorian and COVID-19.

Big jump in property tax collection expected

Real property tax revenues are projected to increase by more than $54 million to over $158 million on the strength of greater enforcement and improved administration. Owner-occupied real property tax is forecast to more than double, from $20.444 million in 2020-2021 to $41.944 million in the new fiscal year, while residential real property tax will jump from $15.788 million to $27.893 million.Some 14,000 properties worth a collective $9 billion have been added to the tax roll. A web shop gaming revenues are forecast to jump by $17.9 million to $41 million largely on the basis of the Government finally implementing the long-awaited tax on patron winnings. 

A patron winning tax of five per cent on winnings up to $1,000, and 7.5 per cent on anything greater than $1,000 is also being imposed.  Johnson told Tribune Business improved tax revenue flows over the past four to five months – together with the vacation rental market’s return to 70 per cent of pre-COVID business levels and signs the tourism plant is “gearing back up” means that the economy will return to four-fifths of pre-pandemic output in a year’s time

Johnson optimistic about projections

Voicing optimism that the Bahamian economy will have “caught up to 70-80 per cent” of its pre-COVID capacity in time for the start of the 2022-2023 fiscal year, Johnson posited that, “barring the unforeseen, and assuming we don’t have any natural disasters that derail us from our path, based on what we are seeing – and provided people get vaccinated at a reasonable clip – I feel very confident we will meet that mark”.

argued that the Government’s revenue flows, at least compared to 2020, had been “very healthy” for the four to five months leading into the current fiscal year’s fourth quarter, while tourist arrivals based on health travel visa data “continue to tick upwards”.