Economy
One of the most prosperous countries in the Caribbean region, The Bahamas relies on tourism to generate most of its economic activity. Tourism as an industry not only accounts for over 60 percent of the Bahamian GDP, but provides jobs for more than half the country's workforce. After tourism, the next most important economic sector is financial services, accounting for some 15 percent of GDP.
The government has adopted incentives to encourage foreign financial business, and further banking and finance reforms are in progress. The government plans to merge the regulatory functions of key financial institutions, including the Central Bank of The Bahamas (CBB) and the Securities and Exchange Commission. The Central Bank administers restrictions and controls on capital and money market instruments. The Bahamas International Securities Exchange currently consists of 19 listed public companies. Reflecting the relative soundness of the banking system (mostly populated by Canadian banks), the impact of the global financial crisis on the financial sector has been limited.
The economy has a very competitive tax regime. The government derives its revenue from import tariffs, license fees, property and stamp taxes, but there is no income tax, corporate tax, capital gains tax, value-added tax (VAT), or wealth tax. Payroll taxes fund social insurance benefits and amount to 3.9% paid by the employee and 5.9% paid by the employer. In 2010, overall tax revenue as a percentage of GDP was 17.2%. Authorities are trying to increase tax compliance and collection in the wake of the global crisis. Inflation has been moderate, averaging 3.7 percent between 2006 and 2008.
By the terms of GDP per capita, the Bahamas is one of the richest countries in the Americas.
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Famous quotes containing the word economy:
“I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical terms.”
—Calvin Coolidge (1872–1933)
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