The Bahamas, Mixed Capitalist
Mixed CapitalistThe labor market is flexible, but labor codes remains ineffective. The government influences domestic prices for such “breadbasket” items as medicines, gasoline, and petroleum gas and state-owned corporations. The Bahamas has no individual or corporate income taxes and has one of the world’s lowest tax burdens. Government revenue, which equals 15 percent of the domestic economy, relies on tariffs and national insurance, property, and stamp taxes. Government spending has reached 23.7 percent of gross domestic product, and public debt amounts to 56 percent of domestic income. The average tariff rate is 18.9 percent, and tariffs are a major source of government revenue. Some agricultural imports are restricted. The financial sector, the second most important contributor to the economy, is fairly competitive. However, nonperforming loans have increased to around 14 percent of total bank lending.