PM Davis Gives Snapshot of His Government’s Financial Initiatives

NASSAU, The Bahamas – During his remarks at the Closing of the Mid-Year Budget Debate, on March 6, 2023, Prime Minister and Minister of Finance the Hon. Philip Davis noted that his Government expected to see increased revenues and disciplined expenditures as it worked towards its goal of a 25% Revenue-to-GDP ratio, fueled primarily by “increased efficiency and fairness in tax collection and a booming economy”.

“Already, we are seeing the fruits of our strategic approach to fiscal management come to bear, as we have successfully lowered the debt-to-GDP ratio from over 100% under the previous administration to just over 80%,” he said in the House of Assembly. “We expect continued decreases, as we seek to take it all the way down to 65% by the 2026/2027 fiscal year.”

“Spending is down against our budget projections,” he added. “Spending is also on a downward trend relative to revenues, in the first 6 months of fiscal year 2021/22 expenditure was 12.6% of GDP, for this fiscal period it was 11.6% of GDP.”

Prime Minister Davis said his administration had taken proactive measures to reduce the impact of inflation, including an increase in the minimum wage and addressing long outstanding public sector wage negotiations.

“As a result, we have directly poured tens of millions of dollars into the hands of ordinary hard-working Bahamians and mandated the private sector do the same,” he said. “This resulted in across-the-board salary increases for tens of thousands of public servants and a quality-of-life increase for all families reliant on the minimum wage to make ends meet.”

“The result of the increase in minimum wage meant that those persons received an extra 1 week’s pay every month or an increase of 24% in their base salary,” he added.

Prime Minister Davis noted that both of those moves were necessary to protect people as much as possible from the “ravages of the global inflation crisis”.

“We have done this without taking on extraordinary funding to support our balance of payments and without any drastic rundown on our reserve levels,” he said.

He noted that his Government sees no downsizing by Bahamian businesses.

“In fact, we are seeing current businesses expand and many new businesses springing up every day,” Prime Minister Davis said.

“Our confidence and faith in the Bahamian people is being reciprocated, as we see Bahamians investing more and propelling the nation’s economic growth.”

Prime Minister Davis pointed out that in his first Supplementary Budget, he spoke of the need for a fully empowered Revenue Enhancement Unit.

“Today, we are seeing the results of this effort,” he said. “We have to ensure that everyone is paying their fair share in this country.”

“Paying taxes is not something people can just choose not to do,” he added. “The vast majority of people are paying their taxes, and it’s not fair for those who follow the law to shoulder the financial burden of those who do not.”

Prime Minister Davis said that they were seeing the best real property tax compliance rates in many years.

“The worst culprits when it came to nonpayment, and the records reflect this, were many owners of the most valuable properties in The Bahamas,” he added.

“We have ensured that they are paying their fair share.”

Prime Minister Davis said that much of the revenue gains can be attributed to the widespread economic growth his Government’s policies had created.

“More Bahamians are working now and many of those who are working are making more money to take care of their families and spend within the domestic economy,” he said. “Tourism numbers are at record levels, bringing money into our economy.”

“We have also achieved results through more disciplined spending, prioritizing high impact initiatives, and making hard decisions where necessary,” he added.

Prime Minister pointed out that where certain projects or activities had exceeded the allocation in the budget, they had been funded mainly by re-allocation within the budget, not by unfunded increases in the budgetary allocations.

“Where we have increased the budgetary allocations, for example in Social Services and with respect to certain wage payments, they have been supported by money in the bank, and informed by our need to take care of those who need it the most,” he said.

“We are fully committed to our deficit targets in this fiscal year and fully committed to empowering and providing