By NATARIO McKENZIE
Tribune Business Reporter
A Cabinet minister yesterday said $3 billion could have “easily” been added to the Bahamian national debt had the Christie administration not introduced Value-Added Tax (VAT).
Speaking as a guest on the talk show, the ‘Revolution’, Michael Halkitis, minister of state for finance, said: “We did the reform and it has paid off. I had a study done. What would we have added to the debt if we had not done the reform? It could have easily been $3 billion.
“We have added another $1 billion. We have done the reform, we are in a bad position, it’s improving and we are getting better.”
VAT was introduced in January 2015 at a rate of 7.5 per cent, with nearly $1 billion in VAT revenue having been collected to-date.
Mr Halkitis added that the Government had borrowed “just over $100 million” to defray the costs associated with its post-Hurricane Matthew restoration efforts.
He said the Government had received Parliamentary approval via a resolution to raise $120 million from Bahamas-based commercial banks, with a second tranche of up to $30 million offered to private investors.
“We got approval for $150 million. I think we went and borrowed just over $100 for Hurricane Matthew. Not all the banks participated in the bond so it was just over $100 million,” said Mr Halkitis.
He added: “There is a gap in the time to get that arranged and get all that financing organised. That takes some time, and you are beginning to spend. You can’t stand still waiting for the loan.”