分类： politics

Fresh off its re-election victory in the May 12 general election, the Davis administration of The Bahamas has laid out its ambitious fiscal roadmap in the 2026-2027 budget, unveiling a plan to boost recurrent revenues by $470 million even as it cuts its projected surplus by 24 percent and navigates ongoing global economic volatility. Newly sworn-in Finance Minister Michael Halkitis delivered his maiden budget address to the House of Assembly on Wednesday, outlining that the projected 2026-2027 fiscal surplus has been revised downward from the previously forecast $291.4 million to $223.1 million, a $68.3 million reduction that Halkitis framed as a deliberate policy choice.

Halkitis explained the downward adjustment stems from two key driving forces: first, the administration’s commitment to prioritizing Bahamian citizens’ livelihoods by directing additional funding to upgrade the country’s healthcare system, and second, persistent volatility sparked by the unresolved Middle East conflict, which has disrupted global energy and fuel markets and reignited inflationary pressures that raise import costs for small open economies like The Bahamas. Despite the narrower surplus, Halkitis emphasized that the country’s overall fiscal position remains positive, noting that the projected $223.1 million surplus still means government revenue will outpace total spending.

The administration is holding firm to its existing $75.5 million surplus target for the 2025-2026 fiscal year, which concludes at the end of June, even amid widespread volatility in global economic and trade conditions that threaten to dampen tourism demand — the backbone of The Bahamas’ economy — and push up consumer prices. Halkitis did not provide an updated closing surplus figure for the current fiscal year, but expressed confidence the target will be met, citing disciplined government spending restraint and growing optimism that the full $130 million in projected Domestic Minimum Top-Up Tax (DMTT) revenues will be collected before the fiscal year closes.

The government’s bold $470 million, 12 percent revenue growth target for 2026-2027 — which would lift total recurrent revenues to $4.357 billion from the current 2025-2026 projection of $3.887 billion — comes against a mixed backdrop. Data shows that for the first nine months of 2025-2026 through the end of March, revenue collection has lagged the prior year’s pace, with only 65.3 percent of the full-year target collected, compared to 69.4 percent at the same stage in 2024-2025. Additionally, the budget forecasts that real GDP growth will slow sharply from 6.5 percent in the current fiscal year to 1.8 percent in 2026-2027, a rate that is projected to remain steady the following year. This growth projection also differs from the 3.8 percent 2025 growth estimate released last week by the Bahamas National Statistical Institute, which was stronger than the budget forecast. The disconnect between slowing projected growth and the large revenue increase has drawn attention, given The Bahamas’ consumption-focused tax system that ties revenue growth closely to economic expansion.

A large portion of the projected revenue gain is expected to come from a dramatic expansion of DMTT collections. The 15 percent minimum corporate tax, introduced to bring The Bahamas into compliance with the G-20/OECD global minimum corporate tax initiative designed to curb profit shifting by multinationals to low-tax jurisdictions, is projected to see revenues nearly triple from $130 million in 2025-2026 to $350 million in 2026-2027, a 169 percent year-over-year increase. This $220 million year-over-year jump will account for nearly 47 percent of the total $470 million revenue increase the government is targeting.

The Bahamas’ top independent fiscal watchdog, the Fiscal Responsibility Council, previously raised doubts that the full $130 million in 2025-2026 DMTT revenues would be collected on time, as the necessary collection frameworks, regulatory guidance and implementing mechanisms had not been finalized by the time of its mid-year assessment. But Halkitis pushed back on those concerns Wednesday, confirming he expects the first full round of DMTT revenues to be received in June, just before the current fiscal year closes. He also revealed that the expected taxpayer base for the new levy is larger than initial projections: when the 2025-2026 budget was drafted, officials expected fewer than five entities to be subject to the tax, but updated data shows the number of liable taxpayers will exceed that initial estimate, creating an upside surprise for the current year-end fiscal position.

Major entities already expected to fall into the DMTT net include the country’s two largest resort complexes, Atlantis (owned by Canada’s Brookfield Asset Management) and Baha Mar (owned by Hong Kong’s Chow Tai Fook Enterprises), as well as regional resort chain Sandals. All three major Canadian banks operating in The Bahamas — Royal Bank of Canada, Scotiabank and CIBC — have already set aside funds to cover their DMTT liabilities. Other notable entities that will likely be subject to the tax include Commonwealth Brewery, the leading Bahamian beer maker majority-owned by Heineken, Bahamas Telecommunications Company (BTC) controlled by Liberty Latin America, and Hutchison Whampoa’s Freeport port and container terminal assets. Shell’s Bahamian subsidiary already reported a $248 million accrued corporate tax liability on its 2024 books, per prior reporting by Tribune Business. Commonwealth Brewery even requested an extension to publish its 2025 year-end financial statements to accurately calculate its full DMTT tax obligations.

Beyond DMTT, the government has identified three additional key revenue streams to hit its $470 million target. First, it has added a $99.228 million charge to the Grand Bahama Port Authority to cover the cost of public services provided in the Freeport port area that exceed tax revenues generated by the city. Second, it projects $24 million in new annual revenue from a revised real property tax category for foreign-owned primary residences: the new 0.625 percent rate will be applied to properties qualifying as the owner’s primary residence (down from the previous 180-day annual occupancy requirement), while the maximum annual tax liability (or cap) for these properties will rise 33 percent from $150,000 to $200,000. Third, the government forecasts VAT revenues will rise $110 million year-over-year to $1.635 billion in 2026-2027, with more than 60 percent of that increase coming from VAT on property sales over $1 million, which is projected to rise from $170.472 million in 2025-2026 to $237.366 million. Current year VAT collection is already on pace to exceed its $1.525 billion 2025-2026 target.

Outlining the full 2026-2027 fiscal breakdown, Halkitis confirmed total revenues are projected to hit $4.4 billion, equal to 23.6 percent of GDP, while total expenditure will reach $4.1 billion (22.4 percent of GDP). Recurrent expenditure accounts for $3.7 billion (20.1 percent of GDP), with capital expenditure totaling $415.8 million (2.2 percent of GDP). The $223.1 million surplus equals 1.2 percent of GDP, with a primary surplus of 5.2 percent of GDP, and the debt-to-GDP ratio is projected to fall to 59.9 percent by the end of the 2026-2027 fiscal year.

“While this surplus is lower than previously projected in the Fiscal Strategy Report 2025, the revision reflects a changing global and domestic environment. Ongoing tensions in the Middle East have increased uncertainty, particularly around energy and import costs,” Halkitis said. “At the same time, we have made the deliberate decision to strengthen our healthcare system, including increased support for the Public Hospitals Authority and further investment in hospital services. These are necessary and responsible choices. Although they have narrowed the surplus, the fiscal position remains positive, underscoring this Government’s continued commitment to sound financial management while prioritising the needs of the Bahamian people.”

A growing political firestorm has engulfed the Bahamas’ ruling Progressive Liberal Party (PLP) this week, after a recent plane crash off Florida’s coast linked to a well-known figure with alleged drug trafficking connections opened up fresh allegations of corruption and inappropriate ties between senior government officials and organized crime. The opposition Free National Movement (FNM) has taken to the streets outside Parliament to demand transparency, while top PLP leaders have repeatedly refused to address pressing public questions about the incident.

The crash, which left 11 survivors after the unlicensed aircraft suffered dual engine failure and was forced to ditch into the ocean, centers on Eric “Player” Gardiner, a passenger who was reportedly found carrying $30,000 in cash when rescue teams reached him. One survivor told U.S. local media that Kingsley Smith, a sitting PLP member of parliament for West Grand Bahama and Bimini, helped secure their seats on the chartered flight traveling from Marsh Harbour to Grand Bahama. To date, Smith has not responded to repeated requests for comment on his role in arranging the flight.

When reporters approached Prime Minister Philip Davis and Aviation Minister Jobeth Coleby-Davis on Wednesday to ask about the crash, both officials dodged all questions. Davis walked away without answering queries about any potential PLP connections to Gardiner or details of how the flight was authorized, while Coleby-Davis ignored questions about whether a full investigation would be launched into how an unlicensed aircraft was permitted to operate in Bahamian airspace.

The opposition has amplified its demands, focusing additional scrutiny on Top Notch Builders, a construction firm linked to Gardiner that has been awarded multiple government contracts. FNM leader Michael Pintard has publicly questioned whether Finance Minister Michael Halkitis ever held a leadership role as president or director of the company. Halkitis has denied holding any such position, but has declined to explain how a firm tied to a convicted drug trafficker was able to secure public sector contracts.

Outside the House of Assembly on Wednesday, FNM deputy leader Shanendon Cartwright led a small protest of around a dozen demonstrators holding signs calling for the public identification of the unnamed “Politician-1” referenced in recent U.S. Drug Enforcement Administration (DEA) court filings. Opposition members wore custom name tags reading “not politician-1”, a gesture Pintard said was meant to signal that FNM members are not the individuals targeted in U.S. law enforcement investigations.

Pintard launched a blistering attack on the Davis administration, accusing the prime minister of turning a blind eye to “gangsterism” within his own government. He claimed Davis has long been aware of the alleged ties between PLP officials and criminal figures, pointing to past public housing and infrastructure projects that have been linked to individuals now in U.S. custody. “We’re saying that he should speak up and deal with the individual or individuals,” Pintard said. “This is the same prime minister who was clearly aware when he signed the contracts related to the housing project, or he was involved as minister of works with the Eight Mile Rock project that involves a Bahamian now in US custody, he knew all along who the individuals were.”

Pintard also criticized Foreign Affairs Minister Fred Mitchell for dismissing the entire controversy as a “nothingburger” that will fade away once all facts come to light, arguing that the downplaying of the allegations ignores severe damage to the Bahamas’ international reputation. “It’s a nothingburger to somebody who lacks concern about the reputation of the country being savaged, because people believe politicians are working with gangsters to move drugs from south to the US through The Bahamas,” Pintard said. “Five years of having people in government positions working with gangsters is worrisome. We’re gonna have more of this, more reputational damage, and that’s the cause for deep concern.”

Speaking during the protest, Cartwright emphasized that a generic statement from the Prime Minister’s Office does not go far enough to address public concerns, and that continued silence from government leaders is unacceptable. He pointedly questioned how an elected MP who took their parliamentary oath just one week prior is alleged to have attempted to arrange a cocaine deal. “Today, as the government chuckled into the House of Parliament, one of those persons is Politician-1,” Cartwright said.

Cartwright stressed that the prime minister has a clear constitutional and ethical duty to protect the Bahamas’ international standing and answer the questions that Bahamian citizens are asking. He warned that dismissing the serious allegations as an overblown controversy will only further erode public trust in government and democratic institutions. “This cuts at the heart of our democracy, and every day, every session that the government does not give answers, it will continue to leak confidence from this government and continue to call into question this institution,” he said, adding that Bahamian citizens are “enraged, hurt and disgusted” by the DEA allegations that a sitting MP was involved in coordinating drug trafficking activities from within Parliament.

As the Bahamian government tables its 2026/2027 national budget, the country’s Opposition Leader Michael Pintard has launched a sweeping critique of the fiscal plan, centered on a fiery demand for answers over an alleged scandal involving hundreds of thousands in public funds misused for political gain ahead of the last general election.

At the heart of the controversy is a reported $200,000+ in publicly funded gift certificates said to have been distributed to voters in Abaco, framed as Hurricane Dorian disaster relief, but issued under the names of ruling Progressive Liberal Party (PLP) candidates and party officials. According to Chris Lleida, chief executive officer of Premier Importers — the commercial entity that printed and distributed the vouchers — the entire cost of the gift certificates was covered directly by the Ministry of Finance.

Speaking in response to Finance Minister Michael Halkitis’s official budget presentation, Pintard argued that Halkitis had a non-negotiable obligation to address the unaddressed allegations in his opening address to parliament. Pintard called the apparent diversion of public treasury funds to partisan political campaigning a clear case of illegal misappropriation, saying the public deserves a full accounting of how public money left the ministry of finance and ended up in Abaco to benefit the governing party’s election effort.

“At a minimum, the Minister of Finance should have advised the country on the status of any investigation into how public monies were moved from the Treasury to advance a political campaign,” Pintard said. “Our minister of finance must give an accounting for that.”

Pintard’s demands over the Abaco voucher scandal formed the opening of a broader rejection of the government’s full budget proposal, which he scored at less than 50 out of 100, arguing the plan fails to deliver tangible policy improvements that would ease daily burdens for ordinary Bahamian citizens. He pushed back against the governing administration’s claims of progress on three key voter priorities: energy sector reform, cost of living relief, and accessible affordable housing, saying everyday residents have not experienced the positive changes the government has touted.

The Opposition Leader also challenged the government’s narrative of improving national public finances, accusing the administration of hiding major unacknowledged fiscal risks and failing to explain a sharp, unexpected uptick in the country’s total public debt. Official data from the Ministry of Finance puts total public sector debt at an estimated $14.1 billion as of the end of March 2026 — a $689.2 million increase from just nine months prior in June 2025, and a $57 million rise from the end of December 2025.

Pintard noted that the government’s original annual borrowing plan had explicitly stated no new borrowing would be needed over the period, raising urgent questions about how the national debt grew by nearly $700 million without the administration returning to parliament to secure additional borrowing approval. He accused the government of consistently avoiding parliamentary oversight of public spending, warning that this new debt burden will create fiscal strain that extends far beyond the current 2026/2027 fiscal year.

Further, Pintard claimed the administration is intentionally shifting public fiscal exposure to state-owned enterprises (SOEs) through off-budget loans, long-term contracts and financing arrangements that do not appear in the full budget figures shared with lawmakers. He pointed to a dramatic surge in direct Treasury lending to public authorities, which he said grew from less than $100 million at the end of 2022 to more than $600 million today.

“In just over three years, more than a half a billion dollars have been advanced to state-owned entities, and all of those have been under the guise of loans,” he said. “We’ve not been told which budgetary appropriations these funds came from. What was the legal authority that allowed the government to do this, and what are the terms of each of these loans, and how will these funds be repaid? This matters because the law is clear: the government lending must come from properly appropriated funds approved by parliament. If these loans were not drawn from such appropriations, the government must explain what legal basis it relied on — and over and over, their answer has been silence.”

Using Bahamas Power and Light, the country’s primary national utility, as a key example, Pintard said tens of millions of dollars in Treasury funds have been transferred to the state-owned power provider without any adequate public explanation. He added that he has submitted formal questions to Prime Minister Philip Davis and raised the issue repeatedly in the House of Assembly, but has yet to receive any substantive response.

Pintard also backed up his claims by referencing official warnings from the independent Fiscal Responsibility Council, which has flagged unreported fiscal risks tied to SOEs, missing key fiscal data, and liabilities that are not properly disclosed in national public accounts. He added that the government is artificially inflating its reported surplus by relying on unpaid public bills, and structuring large infrastructure projects in opaque ways to hide their full total cost from the public and parliament.

While the bulk of Pintard’s address was critical, he did acknowledge a small number of positive housing-focused measures included in the budget, most notably value-added tax reductions for first-time home buyers and owners of multipurpose properties. Even on housing policy, however, Pintard raised unaddressed questions about $40.2 million in public spending allocated to the Carmichael Village Project, part of the government’s broader Housing Project Renaissance initiative. He said neither current nor former housing ministers have explained how the public funds allocated to the development were spent, and called for the issue to be fully debated during parliament’s budget consideration process, questioning whether the completed housing stock delivers public value matching the investment.

Closing his response to the budget presentation, Pintard rejected the government’s optimistic assessment of the national economy, emphasizing that public trust in government depends entirely on full transparency around how public money is used. “We do not believe that this budget speaks to the real issues Bahamians are dealing with,” he said. “Transparency is not optional. It’s the price for public trust.”