BICA president urges diversification of govt revenue sources

Bahamas Institute of Chartered Accountants (BICA) President Pretino Albury told Guardian Business that consideration should be given to diversifying the government’s revenue sources.

Albury, in a statement sent to Guardian Business yesterday, answering queries about the budget debate in Parliament, wrote: “The 2025/26 budget marks a notable milestone for the country, projecting a balanced position for the first time in several decades. This signals a commitment to fiscal discipline, with a primary surplus exceeding 1.7 percent of GDP [gross domestic product] and an overall deficit target below one percent. These developments are significant within the context of ongoing global economic pressures, and represents efforts toward long-term fiscal sustainability.

“The government’s revenue performance, underpinned by a 12.2 percent increase led by VAT [value-added tax], trade taxes, and real property collections, reflects administrative improvements and economic recovery.

“However, reliance on consumption-based taxes continues to expose the revenue base to external shocks and economic fluctuations. Consideration should be given to gradually diversifying revenue sources to improve resilience and long-term planning.”

Albury also said that while capital spending allocations prioritize critical sectors such as education, healthcare, energy, and digitization, the success of these investments will depend on improved execution frameworks.

“Delays and inefficiencies in project delivery remain persistent challenges. The establishment of a centralized Public Investment Management Unit (PIMU) could support more consistent project appraisal, oversight, and accountability.”

He continued: “On the social front, targeted VAT reductions on baby products, hygiene items, and medicines offer modest relief. However, they are unlikely to materially offset broader cost-of-living pressures stemming from energy, food, transportation, and housing expenses.

“These concerns are particularly pronounced in the Family Islands, where inflationary impacts and access barriers are more acute.

“A more robust monitoring mechanism, such as a national cost of living index, could guide more targeted interventions and adaptive social policy responses.”

Albury also noted that the introduction of sovereign blue carbon securities, and a $124 million debt-for-nature swap, represent commendable steps in climate finance. These instruments position The Bahamas among regional leaders in environmental innovation.

“To strengthen these efforts, fiscal planning should incorporate a formal climate fiscal risk assessment to evaluate the potential financial impact of environmental shocks on public resources. With rising hurricane frequency and sea level threats, it is now imperative that we act.”

“Regarding the National Investment Fund (NIF), its intergenerational equity goals are well-conceived, but its governance structure requires further development. Legislative clarity, financial disclosure mandates, and independent oversight will be essential to ensure public confidence and effective operation. Its continued legitimacy hinges on governance safeguards, legislative clarity, and transparent reporting.

NIF is a mechanism for managing and reinvesting the nation’s resources, particularly those generated from the blue, green, and orange economies, as well as government shareholdings.

“BICA recommends enshrining the fund’s framework in law, mandating audited disclosures, and incorporating professional and civic oversight to build trust.”

Albury also said: “In the regulatory domain, BICA expresses concern over the lack of prior consultation on the 2025 VAT and business license amendment bills. While supportive of reform, we emphasize the value of stakeholder input, particularly through our existing technical working groups with the Ministry of Finance and the Department of Inland Revenue. While policy reform is necessary, structured engagement through existing technical working groups would improve reform design and compliance outcomes.

“According to Albury, as part of its long-standing commitment to public financial management reform, BICA reaffirms its strong advocacy for the full and assertive implementation of the International Public Sector Accounting Standards (IPSAS) by the government of The Bahamas. IPSAS is a globally recognized framework that promotes transparency, accountability, and accrual-based financial reporting within the public sector.

“These standards ensure that government accounts accurately reflect assets, liabilities, revenues, and expenses—providing a comprehensive picture of the country’s fiscal position and performance. The implementation of IPSAS will significantly enhance the credibility and comparability of government financial reports, support better fiscal planning, and improve decision-making. As the government continues to pursue balanced budgets, responsible debt management, and sovereign investment strategies, IPSAS will serve as a foundational tool for ensuring the integrity of financial information presented in future budgets.”