From marked increases in Social Service allocations to tax eliminations on food items, to pay raises for public officers and teachers to tax suspensions on fuel imports for the Bahamas Electricity Corporation, the government’s 2008/2009 budget is tilted toward providing relief and assistance to low income Bahamians and those continuing to be adversely affected by the rising cost of living in the country.
Prime Minister and Minister of Finance the Rt. Hon. Hubert Ingraham announced the government’s plans to provide relief to Bahamians during the 2008/2009 Budget Communication delivered to parliament Wednesday.
“This budget has been crafted to take into account the international economic turbulence and uncertainty impacting so harshly on our own people,” Mr. Ingraham said.
“In particular, this Budget embraces my Government’s social philosophy, its commitment and its determination to cushion the harshness of the impact of the international turbulence upon our citizens, most particularly low income families who invariably are impacted first and most acutely.”
Along with its budgetary increase to the Department of Social Services in the last fiscal year, the government over a two-year period has increased assistance to the poor by $13 million.
When the government came to office just over a year ago, the allocation for the Department of Social Services was $26.4 million. In the 2007/08 budget, it increased that Department’s budget allocation to $31.8 million, an increase of $5.4 million or 20.5%. Some $3 million of the Department’s Budget was specifically earmarked for poverty alleviation.
One year later, it has provided a further increase in the Department of Social Services’ budget allocation amounting to some $7 million or 22%.
“The increase in budgetary allocation for the Department of Social Services will permit meaningful increases in all areas of relief to the poor, including food, uniform, rental and burial assistance, payments in respect of foster care, the student lunch scheme and the work programme,” Mr. Ingraham explained.
“I note that the last increase in these benefits to the poor was granted in 2000 during our last term in office.”
In addition to increases for assistance to the poor, the 2008/2009 budget makes provision for a $750 raise for all public officers and a $1,250 raise for teachers in the public school system.
One of the critical cost increases impacting persons worldwide and here at home is on food items, with the Prime Minister pointing out that present global economic uncertainty is giving rise to what appears to be “unstoppable increases in the cost of living driven by the continued rise in energy and food prices internationally.”
This year’s budget addresses the cost of food items by introducing and duty and stamp tax elimination on a wide range of food items.
“Having reduced the stamp tax on food items from 4% to 2% during our last stint in office we are now moving to eliminate the 2% Stamp Tax on some 160 food items,” Prime Minister Ingraham announced.
The 2008/2009 budget also provides for the elimination of import duties on a number of citrus fruits, as well as frozen vegetables, cereals, oatmeal, and breads.
Regarding the rising cost of energy in The Bahamas, Prime Minister Ingraham announced that the government in its 2008/2009 budget is granting a two-year suspension of Customs Duty of 10% and Stamp Duty of 7% on Bahamas Electricity Corporation’s (BEC) fuel imports as a positive measure to address the rising cost of the utility surcharge, which currently includes the 7% stamp tax.
“This is expected to enable BEC to function without further increasing the costs of electricity,” he explained.
The Prime Minister acknowledged that the tax cuts in this year’s budget, inclusive of new and significant concessions being granted to first-time homeowners will impact revenue.
“Some of these revenue measures will admittedly result in revenue losses for the Government,” he noted, “but that will be money that will stay in the pockets of consumers and homeowners and thereby provide much-needed relief in the period ahead.”