Bahamas government releases tax-free budget to Parliament

The Government of the Bahamas has submitted a $3.54 billion tax-free budget to Parliament as it continues its efforts to enhance the country’s economic stability and growth.

Prime Minister Philip Davis stressed that the fiscal package builds on measures his government has implemented since taking office in 2021.

Income and expenses details

Prime Minister Davis stressed that the budget’s projected revenues do not include a $75 million reimbursement from the Grand Bahama Port Authority (GBPA), noting that the total amount payable by the GBPA is $357 million.

Total expenditures are expected to be $3.61 billion, including $3.27 billion in recurring expenditures and $344.5 million in capital expenditures.

Fiscal Deficit and Economic Indicators

The fiscal deficit is estimated at $69.8 million, or 0.5 percent of gross domestic product (GDP), while the primary balance surplus is $586.9 million, or 3.9 percent of GDP.

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The debt-to-GDP ratio is expected to reach 75.3% by the end of 2024-25.

Launch of Cloud Bahamas

Prime Minister Davis announced the official launch of “Cloud Bahamas,” a new government enterprise resource planning (ERP) application designed to modernize public service operations.

The ERP system is designed to improve financial reporting, including public sector profit and loss accounts and balance sheets, and will be fully implemented by January 2025.

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Committed to tax efficiency

The Government’s revenue philosophy focuses on reducing the overall tax burden on ordinary Bahamians while improving tax efficiency and enforcement.

The new budget does not introduce any new taxes, but does make adjustments to government service fees where costs have increased.

Revenue growth and future goals

Since prioritizing tax efficiency, tax revenue as a percentage of GDP has risen from 18.7% at the start of the government’s first term to 20.4% in the 2022-23 fiscal year.

The government aims to achieve a medium-term revenue target of at least 25% of GDP.

Main policy priorities

Davis said the fiscal package prioritizes enhancing the well-being and creating opportunities for the Bahamian people, increasing foreign direct investment revenues, addressing the shortfall in value-added tax on real estate transactions, and developing a level playing field for business.

He also said providing new opportunities for Bahamians and incentivizing people to participate in the growing economy remains a key policy priority for the government.

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