Prime Minister and Minister of Finance the Hon. Philip Davis presented his first National Budget in which he outlined key priority areas to help Bahamians cope with major cost-of-living challenges. He presented the Fiscal Year 2022/2023 Budget Communication in the House of Assembly on Wednesday, May 25, 2022. The Communication is entitled ‘Budget 2022: The Way Forward.’
“This Budget provides a foundation to strengthen our nation, to lift ourselves up, to face the future with strength and optimism,” the prime minister said. The Budget is organized around central priorities defined in the Speech from the Throne and his government’s New Day Agenda — the first priority of which is to “help Bahamians cope with a cost-of-living crisis,” the prime minister said; “Bahamians were already struggling with high energy prices, high food prices, and expensive housing costs.”
In this vein, his government’s strategy for softening the impact of this global crisis includes: a mix of broad-based import duty reductions; increased enforcement of price controls; an increase in the minimum wage for public servants; increased social services assistance; important new support for Catastrophic Health Care; the establishment of the Universal Service Fund to make technology more accessible and affordable throughout the islands; a substantial investment in promoting home ownership, and energy reform to reduce costs, among other initiatives.
He revealed that the government sent a proposal to the Bahamas Public Service Union to increase the minimum wage with incremental increases beginning July 2022. And, that the government believes the rate of minimum wage needs to increase because of the “general erosion of spending power of ordinary Bahamians.”
“We also recognize that an important part of our tourism experience is our unique culinary products — and we need to ensure that the sector remains competitive. We have also therefore reduced the duty on food items used mostly in the restaurant and tourism sector,” the prime minister said. Sharing the fiscal outlook for 2022/23, the prime minister said that the current budget projects a significant rebound in the Bahamian economy.
“Total revenue is projected at $2,804.4 Billion, a 19.9 percent increase over the prior fiscal year when the economy was in the early stages of an economic rebound from the COVID-19 pandemic.
“It incorporates many of our revenue enhancing strategies and outcomes such as increasing Real Property Tax collections and compliance, an improved VAT performance, based on the economic rebound and growth in other fees as a result of improved revenue administration,” he said. Also in the budget for fiscal year 2022/23, VAT collections are estimated at $1,411.8 million, a 52.4 percent increase over the prior year budget, the prime minister noted.
The prime minister also announced that his government would seek parliamentary approval for a Supplementary Budget for additional expenditure of $216.9million and capital expenditure of $34.4 million, for a total of over $251million.
“This budget provides support for the here and now, and also charts the way forward for a brighter tomorrow,” the Prime Minister said.