By YOURI KEMP
The Central Bank’s governor says The Bahamas’ recent ranking as the world’s sixth most expensive country to live in is not an “accurate portrayal” of this nation’s cost of living.
John Rolle, speaking during the Bahamian digital currency’s launch in Abaco, said of the findings by CEOWorld magazine: “I think the biggest misinterpretation of that is Bahamians think that it means that it’s their cost of living that’s being referred, and it’s not.”
“It’s the cost of being an expatriate, and that’s compared against other countries internationally where you have expatriate communities. For the expatriate communities there are inputs into their living like real estate accommodations. Accommodations in The Bahamas would be comparable to the cost of real estate rental wise in many of the other expensive jurisdictions in the world, so we have to remember than.”
He added: “The other thing that we have to remember is that our tax system is pointed towards consumption. That is not similarly the case in other countries. So in other countries, to make a fair comparison with The Bahamas, you also need to consider that we are not paying income taxes.
“Just to look at the cost of living as it applies when you are only paying taxes on your consumption basket understates the fact that your income is not being taxed directly, which is the case in a lot of these other global centres. So The Bahamas, in my view, doesn’t get as accurate a portrayal in those types of comparisons.”
The magazine’s survey ranked The Bahamas behind just Switzerland, the world leader, and Norway, Iceland, Japan and Denmark, making it the world’s sixth most expensive country to live in and the highest-cost destination in the Western Hemisphere.
The survey, which uses New York as the baseline benchmark to compare all countries to, based its assessment on five metrics including the cost of living; rent; groceries; eating out; and purchasing power.
To assess these metrics, the magazine looked at consumer prices indexes and cost of living studies from 132 nations, as well as publicly-available data that measured every-day costs such as accommodation; clothing; taxi fares; utility; internet; the price of groceries; transport; and eating out.
The Bahamas scored a combined 82.51 points in its “cost of living” rankings, rating especially highly on restaurant costs at 83.66 - a result that may have been aided by the inclusion of the automatic 15 percent gratuity. It also achieved a 62.65 score in the groceries cost index.
While rent costs in The Bahamas received a relatively low score of 36.36, this jumped to 60.43 when added to the magazine’s cost of living index. And it scored just 54.18 for “local purchasing power, the third lowest mark among the 20 most expensive countries. This indicates that many Bahamians are struggling to keep up with rising living costs.
The survey’s findings will come as little surprise to many observers given that The Bahamas has long been known as, and perceived as, an expensive destination due in large part to its import dependency and regressive taxation system that focuses primarily on taxing the cost of living through VAT and import tariffs/Excise Tax.
However, K Peter Turnquest, deputy prime minister, who was also present at the Abaco Sand Dollar launch, added: “It really is an apples and oranges kind of comparison, because if you look at the list, for instance, it ranks Hong Kong’s cost of living below ours. I have been to Hong Kong. It is an expensive place to live unless you are living in very meagre accommodations.
“So if you compare apples to apples I think you would find we would fall way below where we are ranked on this listing. That’s not to say we need to do more about trying to bring down the cost of living, and we are looking at ways that we can do some of that.
“But, as the governor rightly says, we are a consumption tax-based economy and, as a result of that, a lot of the cost gets built in to the price of goods whereas in other countries it would be taxed on the income, so it gives an unfair comparison,” Mr Turnquest said.
“In addition to that, even when you look at the region to compare us to the region, the reality is our standard and quality of life is a little different. Not better, but it’s different. So when you try to make those comparisons it is sometimes misleading. If you take out all of the anomalies the reality is our overall burden as a citizen is comparable to most in the world if not less, certainly less than most developed countries.”
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March 04, 2020 at 02:25AM
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Bahamas' sixth most expensive ranking not 'accurate portrayal' - Bahamas Tribune
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