Several days ago, a single mother walked into a tire shop in search of a used tire. She knew what the cost of a used tire had always been so she thought she knew how much she would have to spend.
But the wind was knocked out of her when the retailer told her the cost of the tire. She hadn’t planned on coming up with that extra money but what else could she do? She needed the tire for her car.
That’s when she quickly realized: retailers were already passing the new taxes and levies by the government as of July 1 on to consumers. She also realised that in just that area alone, Bahamians who were already struggling to make it would be finding it even harder now to make ends meet.
Last week, I posted a question to my Facebook blog “According to Me – Sharon T”, asking my readers how many of them have seen a spike in the cost of their regular purchase items and services since July 1.
One reader replied: “significantly more, on order of ~ $200 extra in grocery bills…Many items have gone up 50-100% and they seem to go up more every time I go to the store.”
Another reader, a mother replied: “Can’t keep up, my grocery bill double and had to cut back and feeding growing kids with the proper meals is rough. Fruits and vegetable are so pricey it makes ya head spin.”
After others also chimed in about the spike in their grocery bills, a reader’s reply echoed sentiments expressed by the single mother I highlighted earlier: “A certain business that sells battery & tires charge an additional $5.00 for environmental levy for every battery they sell. People need to read their receipts carefully and keep them to chart the amount of money that you’re paying on items monthly…it’s downright scary…”
These are the voices of the average, everyday Bahamian – the voices you don’t get to hear on the news and who don’t get national attention because they are not an MP, Cabinet Minister or foreign billionaire.
These voices represent the real-life, everyday hardships the government’s 2013/2014 Budget has caused on the wallets and lives of the Bahamian people.
When State Minister Michael Halkitis (whose public statements almost always indicate a personal break with reality) recently defended the government’s surprise tax hikes by saying they are not that bad, I guess he was saying that in the context of making a $60,000 Minister’s salary plus a $28,000 MP’s salary, plus a Minister’s allowance and plus whatever other perks he and his colleagues are receiving at the hand of taxpayers.
But tell me – how many Bahamians are making at least $90,000 per year as a salary? If many more were, maybe they could share the view of State Minister Halkitis that the increase in the cost of living brought on by his government isn’t that bad.
But most employed Bahamians are not making even half that amount of money each year and they have to try to survive, feed, clothe and educate children, take care of their health and try to manage as unexpected price hikes take a heavy toll on their wallets and quality of life.
Last week I saw a newspaper headline in a local daily on Grand Bahama announcing yet another hike in gas prices on the island that continues to have the highest unemployment rate in the country. I asked myself how in the world the average person is making it.
We’re watching politicians parade into Parliament on their sitting days, and on our live television and radio they run on with all manner of nonsense, completely caught up in the fact that they are elected officials; the rock stars of our culture.
While they are doing that, their constituents are trying to decide which items to put back on the shelves in the grocery store even though they really need it, but simply cannot afford it.
And lest we forget, it’s also back-to-school time again which is always a challenging period for parents; but will likely to be even more of a challenge with price increases that run the gamut of standard expenses.
In our frustration, we cannot blame the retailers for passing recent tax hikes onto the consumers – what else do you expect them to do? Businesses have to know what is going to happen with their operational costs in order to plan and then effectively operate.
The government cannot tell them on Monday that effective that same Monday, their operational costs are going to significantly jump, and expect for the average retailer to simply eat the increase.
No. In order for those businesses to stay open they had to make the unexpected decision of either laying off staff, or raising their prices to offset the extra money they – without prior consultation – were forced to pay to the government via new taxes and fees.
Our government has waged an open war against our wallets, and what the powers that be seem to care little about is that this is a war many Bahamians cannot afford to fight, much less win.
Through its reckless tax increases, our government is breaking the back of consumers and business people, with more and more Bahamians wondering and fearing whether we as a nation will have to hit rock bottom before eyes begin to truly open.
VAT and BEC
As I continue, let me break down for you how your expenses could take another leap once the government slaps its next new tax on us in several months time – 15% Value Added Tax (VAT). If your light bill is now about $600 per month, it could jump to $690. A water bill at $200 could jump to $230. Numerous items and services that may cost $100 now could jump to $115, and so on.
VAT will be serious business for The Bahamas, and with all the foolishness that has gone on in Parliament, people have missed that Parliament has now gone on summer recess without the government tabling the Bill for Value Added Tax and its Regulations that it promised to table before the summer break.
The House does not meet again until October. Why didn’t the government table this critical Bill for consultation as promised? What could possibly be more critical on its agenda right now than a brand new national taxation scheme that will increase the cost of living and doing business by at least another 15 percent in just a few months time?
A new taxation scheme cannot be rushed without also causing major upheaval for the citizenry. Once the government gets back in October we still do not know when it will table its VAT Bill; which is supposed to trigger the start of national consultation before the Bill is even passed.
But that period is moving into the holiday season, where very little by way of national consultation would get accomplished. Then comes the New Year, giving the government less than six months to meet its July 2014 deadline of implementing a system of taxation on us that even the government itself by way of infrastructure is not prepared to collect yet.
Between talk of another major national consultative move – a Constitutional referendum – and now the surprise announcement of a privatization plan for BEC which the government says it wants to complete in stages between next month and the New Year, just when and how in the world does the government plan to fully educate the population on, and then effectively and responsibly implement Value Added Tax?
As for BEC, at no time did the Progressive Liberal Party ever tell the Bahamian people that it planned to introduce a privatization element to BEC, but out of the blue the Prime Minister announced the same this week – surprising even at least one of the unions representing staff at BEC.
The announcement made by Prime Minister Christie about how the government plans to carry out this hurried privatization model for BEC raises key questions about how this restructuring of BEC will impact both the cost and delivery of electricity.
I am hoping that persons in this country who are able to bring deeper perspective to the Prime Minister’s announcement speak up for the benefit of the Bahamian people, because the Prime Minister and his government have a horrible track record on transparency and honesty in matters as significant as this.
At the very least, this announcement has added yet another slab of uncertainty to the Bahamian economy, economic projections and what you and I can expect to happen to our wallets and the cost of doing business.
Freeport Businesses Unite
Businesses in Freeport meantime are coming together to seek a judicial review of whether new taxes and fees via the 2013 Customs Management Act are a violation of Freeport’s Hawksbill Creek Agreement (HCA). As part of the process, the businesses plan to seek an injunction against those taxes ahead of the judicial review.
Businesspersons as members of the Grand Bahama Chamber of Commerce met Tuesday evening and unanimously agreed to pursue the court process. A petition for those members as part of this process was to be launched on the Chamber’s website today (Friday).
In addition to retail and tourism-based business, Freeport’s economy is heavily weighted in its industrial sector that is driven by foreign direct investment and employs thousands of Bahamians.
I attended this meeting and spoke with Chamber President Barry Malcolm, who stressed that the process of the island’s businesses coming together is strictly about business, not politics – putting action to their concerns about the new and substantial increases in the cost of doing business.
“The main concern of many of our members is that their reality is that the cost of goods has gone up,” Mr. Malcolm pointed out. “In the case of the retailers, they will pass those on as surely as night follows day – they have to.
“For the international companies their cost has gone up also,” he continued. “There is one of our members whose costs have gone up by about $250,000 per month.”
Freeport businesses will also be seeking review of whether the government’s planned VAT regime is also a violation of the HCA.
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