NASSAU, Bahamas (CMC) — The Bahamas Government says it is moving towards implementing the second phase of the comprehensive public service salary review and that public servants will see increases in their salaries at the end of this month.

Prime Minister Phillip Davis, during the debate on the US$3.89 billion national budget, told legislators that the first phase of the review has now been completed, focusing on middle management and above.

“Public servants will see increases in their salaries at the end of this month. This second phase will bring salary adjustments of two to eight per cent for the remainder of the public service,” Davis told legislators, saying it is “a vital step to help restore purchasing power lost to inflation, while also promoting fairness, retention and morale across the public sector”.

He said that the second phase will be implemented in September 2025 and that the Government is also expanding health insurance coverage for all government employees.

“This initiative will provide broader protection for our public officers, reduce out-of-pocket medical costs and improve overall access to healthcare for those who serve our nation,” Prime Minister Davis said, adding that “we’re also modernising the delivery of healthcare benefits by enhancing the National Health Insurance programme”.

“We are transitioning the prescription drug benefit from the National Insurance Board to NHI, supported by a new, upgraded IT (information technology) system. This digital shift will improve operational efficiency, ensure private insurers pay when required, and help reduce pressure on the public purse.”

Prime Minister Davis said that in the next fiscal year, the Government will continue to make meaningful progress with One Tax Bahamas, saying it is part of “our effort to build a simpler, smarter and more transparent tax system”.

“This will be ready January 2026,” he said, adding “We are developing a modern digital platform so that individuals and businesses can register, file and pay taxes online, with no more long lines or piles of paperwork.”

Prime Minister Davis said that to date, the authorities have designed the foundation for a secure and user-friendly tax system, begun development of a new taxpayer registration portal and website, drafted robust data protection and privacy policies, which will include provisions to address issues of cybercrime and wrongful use of artificial intelligence and engaged key stakeholders across government to ensure the system serves all Bahamians effectively.

“To stay on schedule, we’ve made several key strategic decisions, including using a cloud-based solution to prevent delays and to ensure the system is ready by March 2027.  We continue to work hand-in-hand with our partners to meet international standards and deliver a tax system that works for the Bahamian people.”

Davis said that even as the economy has continued to improve, his Government is aware that there is still much work to be done.

“There are still too many Bahamians that simply struggle. Of course, the lower light bills and reduced VAT (value added tax) on food help, but they are not enough. ”

He said that the increase in the minimum wage, reductions in duty and other measures have also helped, but “the main causes of the cost of living and inequality are structural. These are not issues that can be fixed overnight, but we are determined to make a start”.

He said as announced late last year, the Government is already moving forward to address some of the fundamental causes of the high cost of living in the country.

“We are developing legislation to strengthen competition. And we have already launched several initiatives under our Trade Diversification strategy.”

Davis said that given the new global tariffs being introduced by the new American administration, “it is fortunate that we had already begun to expand and diversify our trade partners”.

“We are also developing policies to reduce the costs of domestic trade between all our islands.

I have spoken on several occasions about the need to promote greater “economic justice” in The Bahamas.

“It is not right that as our national economic circumstances improve, all Bahamians are not able to feel an uplift in their situations,” Prime Minister Davis said, noting that the strong, positive economic outlook for The Bahamas does not mean that there are no challenges on the horizon.

“However, in starting to build a budget surplus, we are in the fortunate position of being able to prepare ourselves better for a literal ‘rainy day,”  he added.