12272023 BUSINESS

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business@tribunemedia.net

WEDNESDAY, DECEMBER 27, 2023

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Flat revenues and spending increase see rise in deficit FLAT revenues and a $47m increase in total spending resulted in a near-tripling of the government’s first quarter fiscal deficit year-over-year. The Ministry of Finance, releasing August and September’s monthly fiscal numbers last Friday just as Bahamians were heading home for Christmas, disclosed that the deficit for the three months to end-September 2023 hit $58m as compared to just $20.5m during the same period in the prior fiscal year.

This means the amount by which the Government’s total new spending exceeds its revenue income increased during the first quarter of the current 20232024 fiscal year, as expenditure growth outpaced modest revenue improvements. Total revenues for the 20232024 first quarter rose by just $9.2m, or 1.4 percent, year-overyear to strike $663.7m as opposed to $654.5m during the prior year period. While tax revenues were up by slightly more, rising by $29.2m or

5 percent to hit $603.7m as compared to $574.5m in 2022-2023, VAT collections improved by just $7.4m or 2.2 percent to reach $337.9m. VAT, which is the Government’s main revenue source, accounting for almost 48 percent or nearly half its recurrent income, has to increase by a much greater 27 percent or $339m over the $1.252bn collected in 2022-2023 to hit this year’s target of $1.591bn. And, to hit its full-year total revenue and tax targets of $3.319bn and $2.918bn, respectively, the

Davis administration needs to increase its income by 16 percent and 15 percent compared to what it generated in 2022-2023. This means that, to achieve the $462m increase in total revenues and $381m jump in tax income it has projected for the 20232024 full-year, the Government will have to grow its income at a much faster pace over the remaining nine months than it achieved during the first quarter.

‘Rebound is welcome but there’s work to do’

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By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net A FORMER Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman said the government is “not grasping at straws” with its new enhanced Business Licence audit verification process. Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business the government wanting certified audits by April 2024 from all companies who gross over $5m was always a requirement and it is unfair to misrepresent it as going after businesses. The requirement, passed in the 2023 budget, will require companies with turnover above $5m to produce audited accounts by April 2024. Critics, including the BCCEC, say the April deadline is too aggressive for most of the impacted businesses. Mr Bowe said: “Those businesses now have to have their revenue number certified and what the government is doing now is increasing the level of attestation and that is to be determined on if its necessary and should the Department of Inland Revenue (DIR) be able to more independently verify, and to be honest, target those, who may be seen as misrepresenting their revenues.” There are more details that need to be discussed over the deadline impasse, but businesses must “render unto Caesar what is Caesar’s”. Mr Bowe also said: “The government certainly should be collecting all revenues that it’s entitled to, and persons that may have benefiting from deficiencies in the tax collection system should not have seen that as windfall because they were effectively stealing from the wider society.” That notwithstanding, the government may be “overly optimistic” on what they might generate in revenue, but they are “not grasping at straws” on this new process. Mr Bowe, chiding the government, said: “But they need to demonstrate that same level of overoptimism in what they can reduce in expenditure because it’s two sides. You can’t say, well, I’m going to grow revenue by what a number of persons have indicated as very optimistic targets, but not demonstrated you’re taking the very hard actions to reduce expenditure.” He also said: “Sometimes those hard actions mean a reduction in the social services provided, it may mean a reduction in some of the government services that are provided, because we simply are not able to afford them. “So we have to be careful about giving the impression that we can be the provider of all things, without persons having to pay their fair share of taxes, because we don’t have the money tree that you can shake.”

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SunCash leading the way on transactions of Sand Dollars By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net A DIGITAL payments provider is proud to tout they are processing 80 percent of all Sand Dollar transactions as it leads the way to more business accounts for 2024. Shawn Smith, SunCash’s business development manager, told Tribune Business that out of approximately $1.7m in Sand Dollars in circulation, SunCash accounts for over 80 percent of those transactions and only sees that number increasing when it rolls out its full suite of business support tools for merchants. Mr Smith said: “The reason why I say that is because you know you have a little over 2,500 businesses that are on

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Govt ‘not grasping at straws’ with business licence process

A TOP financial expert said while the economic rebound was significant, there is still a lot of work left to do to get the country back on a pre-pandemic growth path. Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business there are a number of positive things that point to growth in the economy, such as new hotel rooms and the increase in employment across the board - although the number of persons employed has “decreased” since 2019. “Whilst we had a tremendous amount of ailments and

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SHAWN SMITH when you have more than 68,000 now active customers, and we have more than 120,000 unique customers and we have all the methods where people are able to interact with us, we’re connected to all of the utilities we’re connected with most of the government systems you can pay through us.”

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need to invest, and put aside for what could be a rainy day,” he said. The country has withstood major hurricanes and a global pandemic along with other social shocks, but it should not take this resilience to mean we are immune from anything. Mr Bowe said: “We should take the good, meaning the increase in tourist numbers, and exploit it to where we

GOWON BOWE get stopover because we don’t want large cruise ship tourists who have been reported as spending less even though the cruise port will ideally start to get more spend out of them. We want to take those numbers and them into greater revenue, we want to take the buoyancy in the economy and turn that into savings, investment and independence financially as opposed to just sovereign independence.” While the debt to GDP improving is a “significant number”, overall GDP improvement is the more

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12272023 BUSINESS by tribune242 - Issuu