Customs Duty Reductions Are Announced

Duty Reductions Are Announced - 31 May, 2000

The Government has announced their 2000/2001 budget which will go into effect the beginning of July 2000. This year's total expenditures will be $1077.1 million and for the first time in recent years the income will balance the expenditures. The government is not increasing any taxes nor introducing any new taxes but rather is reducing the duty rates on a number of items. The budget speech was delivered to Parliament by the Hon. Sir William Allen, Minister of Finance, on May 31, 2000.

• Some specific changes in duty rates are suggested as follows:
• Eliminating customs duties on all computers and related parts effective immediately.
• Duty exemption on building materials for another two years for the southern Bahama Islands.
• Reduction of duty on golf carts from 50 percent to 20 percent.
• Elimination of duty on computer perforated paper.
• Exemption of duty for members of the Agricultural Cooperative Society.
• Elimination of duty on printers' paper for registered printers.
• Elimination of duty on cameras including digital cameras.
• Reduction of duty on video games used with television and hand held video games from 65 percent to 35 percent.
• Extension for another year of the duty exemption for importing new taxi cabs and omnibuses.

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International Programs Cause Concerns

There has been concerned about globalization and its effect on small economies. During the Budget Speech presented to Parliament, the government commented on its participation in various international groups and the problems some of these programs will mean for The Bahamas.

The Bahamas continues to participate in discussions to set up the Free Trade Area of the Americas. For smaller countries accepting this when the program is fully developed, there would be major changes. At this time the disadvantages are becoming more evident. Concerns include the additional costs to the government as well as a probable loss of employment in small industries. It is not at all evident that these would be offset by any major advantages. However, The Bahamas has met challenges before and government is confident it can turn them into advantages.

Economy Viewed as Healthy

The Bahamas has been rated by international organizations and these are all very favorable. Since 1995 the economy has recovered well. This is based on significant foreign investment in tourist resorts and a large transshipment facility as well as steady growth in residential construction and financial services. Despite Hurricane Floyd adversely impacting the 1999 figures, the domestic growth was up. The domestic growth in 1997-1998 was three percent annually and by 1999 was about six percent. There has been a decline in unemployment and inflation and a strengthening of the international reserves. Unemployment is at seven percent and is soon expected to be at full employment which is at five percent or below. There have been significant increases in per capita income and employment. The Bahamas continues to enjoy the highest rating of any independent country in this Hemisphere other than the United States and Canada. International organizations are satisfied that the Bahamian debt is very manageable and no strain on the economy.

Tourism is showing growth in many areas including Abaco. Tourism has had seven years of massive construction and renovation and this trend is continuing. The number of visitors is up as well as the total visitor expenditures.

The development of our neighboring island of Grand Bahama was cited for the diversification of its economy. It is outstanding as it is developing in several areas including new and renovated resort facilities, the transshipment terminal, the ship care facility and other major works. When fully operational the ship care facility will employ more persons than the number currently employed in the financial services sector. Their economy will not be dependent on a specific industry so changes in one particular industry will not affect that island so much as other developments on the island will operate normally.