The Bahamian one-cent coin, better known as the penny, is set to be decommissioned from circulation by December 31st, 2020 and by June 2021 will no longer be considered legal tender in the Commonwealth of The Bahamas.
Reports indicate that the Central Bank of The Bahamas made the decision to decommission the penny following a study of the cost of producing it in comparison to its actual value and it was discovered that it cost $443,000 to distribute the one-cent coin.
However, if the bank discontinued it, a saving of just over $7,000,000 could occur in a 10-year span by eliminating it altogether and while this seems to make good fiscal sense, Bahamian citizens are up-in-arms about this decision.
Several persons expressed their views as to whether they believe this is the right call made by the government and Central Bank of The Bahamas as well as if this is yet another form of government taxation being forcibly levied upon the Bahamian people.
Sharing her views on the matter, Dencie Tucker said, “Honestly, I do not believe that the government and Central Bank of The Bahamas made the right decision as it regards the decommissioning of the Bahamian one-cent piece.
“Looking at it from a historical and cultural perspective, the one-cent piece/ penny plays an integral role in the average Bahamian’s finances and has literally been in existence for as long as The Bahamas has been established,” Tucker added.
“On a daily basis, the penny is used in stores and businesses throughout our communities and it is used as a teaching tool in mathematics classes from preschool to primary throughout our nation, hence, its decommissioning proves to be a tough pill to swallow.
“Personally, I feel both the government and Central Bank of the Bahamas could have come up with a more cost-effective solution to keep the penny in circulation, especially when you consider the fact that we are now being forced to round up the change in our wallets and at store counters to five-cent pieces and that in itself puts a lot of added pressure on the pockets of the poor.
“While it is not stated, I, like many others believe it is another form of taxation implemented by the government and that is truly unfair.”
Completely in agreeance with the sentiments expressed by Tucker, Derek Stubbs revealed that it is his belief that the government made the wrong call with its decision to decommission the Bahamian penny, as it is just as important to the average Bahamian as a paper dollar.
Not mincing his words on the matter, Stubbs emphatically stated, “Definitely, in my view this is yet another move by the government that was not well thought out. Personally, I believe that the government looked at what other nations around the world have decided to do as it regards their economy and have haphazardly set the wheel in motion for the decommissioning of the penny without gathering proper statistical data that is unique to the Bahamas and the people.
“Oftentimes the decisions made in Government are emotionally motivated as oppose to being fact based, which is unfortunate in instances such as this and while the decommissioning of the penny might not outrightly be identified as a form of taxation, there is more pressure being placed on the pockets of the poor.
“We are now being forced to round-up at the cash register from one-cent to five cents and that will be both seen and felt at mom and pop, grocery and wholesale stores, gas stations and utility companies.
Furthermore, Stubbs said it will affect the recently implemented Value Added Tax (VAT), which currently stands at 12 percent but will now at the very least experience a three-cent increase to 15 percent.
Additionally, Stubbs noted that while this decision may appear to bode well for the coffers of the Government, the penny’s decommissioning puts poor Bahamians in a financially precarious position as it relates to making ends meet.
“Ultimately, the Government would be able to collect more but this in itself does not benefit the poor, who are already financially challenged and the rich are not affected,” Stubbs concluded.
Businessman Dorrall Weech Concerns also raised concerned to how the decommissioning of the Bahamian penny would affect American tourists visiting the shores of The Bahamas, who know that a dollar-for-dollar exchange rate system exists between both countries and the American penny is in circulation and used as viable currency.
“Truthfully, the government did not think this decision through as it relates to how it was going to affect the poor,” he said.
Whether or not it is properly identified as a form of taxation, the truth is it most certainly is as we are now forced to round-up by four cents.
“My question now is, what is going to happen with the American one-cent coin that is readily used in stores and businesses throughout our country and are we going to now tell tourists visiting our islands that their penny is no longer recognized as legal tender,” Weech queried.
Many like Weech agreed that the validity of his enquiry should not be overlooked, and both the Government and Central Bank of the Bahamas need to conduct more in-depth research.
“The decommissioning of the Bahamian penny also affects us historically and culturally, as for decades it has played an important role in our finances and it has been in circulation for as long as our country has been in existence,” Weech said.
“Like us and our paper currency, it has evolved in size, diameter and design hence the decision for the penny’s decommissioning should not have been autonomous and instead brought to the people in a referendum as it effects so many areas of Bahamian life particularly as it concerns the taxpayers’ pocketbooks.”
Rounding out the debate on the impending decommissioning of the Bahamian penny was Ricky Martin, who like Tucker, Stubbs and Weech agrees that the decision to do so is not right and may have serious repercussions for the middle and poor class of The Bahamas.
He is of the view that an alternative compromise that benefits all concerned can be reached if the government and Central Bank of The Bahamas are keen enough to seek it out.
“Undoubtedly, I feel that the decommissioning of the Bahamian penny is a form of Government taxation and it will have serious repercussions on the pockets of the Bahamian consumer. Based on the rounding system that is set to be implemented once the penny is no longer consider legal tender, I believe store owners will not take a loss but instead round-up to five cents on the price of goods and services,” declared Martin. “Of course, once this happens, stores will make more money and in turn pay out larger sums to the government so again, I do feel it is a form of unspecified taxation.”
Additionally, Martin revealed he is of the belief that the historical and cultural significance of the penny is going unnoticed, as worldwide no matter the country the penny holds great value to their economies.
Giving thought to the alternative measures the government and Central Bank of The Bahamas can enact to save the Bahamian penny, Martin surmised, “If the government and Central Bank of The Bahamas were of the view that the cost associated with the production of the penny was too high, I believe they should have looked at other cost-effective alternatives to produce it.
“Maybe they could have made the penny out of paper, used a different metal instead of copper like bronze or brass as well as the bank could have conducted a penny drive to restore its coffers and redistribute them instead of decommissioning it,” Martin said.
No matter what ones opinion is on the matter, the decommissioning of the Bahamian one-cent piece/penny surely holds great significance for all concerned.