05262022 BUSINESS

business@tribunemedia.net

THURSDAY, MAY 26, 2022

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‘No disconnect’ despite $200m surplus increase

Blacklist ‘factor’ fear on bank Business Licence

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Bahamian economy’s “exceptional” post-COVID rebound justifies revisions of more than $200m in key Budget projections, top officials asserted yesterday, despite Opposition fears of a “disconnect” that will undermine fiscal credibility.

Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business the tourism-led economic revival was occurring “a lot quicker than anyone thought” possible and enabling the Government’s revenue performance to recover from the pandemic at similar speed and magnitude

• Key fiscal targets revised in just four months • Upcoming year’s deficit rises $150m to $564m • Pintard fears hit to Bahamas fiscal ‘credibility’ With VAT collections for the first nine months of the current 2021-2022 fiscal year standing at 90 percent of full-year estimates, he argued that such an outturn justified the Davis administration’s optimism that its main tax mechanism will generate $1.412bn in revenue

PHILIP DAVIS QC

during the upcoming 20222023 period. This would represent a 67 percent year-over-year increase compared to the Minnis administration’s original $845m forecast for 2021-2022.

SEE PAGE 4

MICHAEL PINTARD

$100m SOE subsidy cut goes in opposite direction

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has temporarily shelved plans to slash subsidies to stateowned enterprises (SOEs) as it seeks Parliamentary approval to borrow $251.4m for clearing unpaid bills prior to the 2021-2022 fiscal year-end.

Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune

Business that cutting annual subsidies to the likes of Bahamasair and the Water & Sewerage Corporation “remains a priority” even though this collective sum is set to increase by almost $31m yearover-year in the upcoming 2022-2023 Budget year.

The Davis administration’s Fiscal Strategy Report, released just four months prior in January 2022, had committed the Government to pursuing

plans left in place by its predecessor that were targeting a $100m cut in these subsidies “over the medium-term horizon”.

However, with the Government yesterday unveiling its second “supplementary Budget” in just eight-and-a-half months since it took office on September 16, Mr Wilson said it had no choice but to address the “huge overhang” of unfunded liabilities generated by the

likes of the Water & Sewerage Corporation.

Prime Minister Philip Davis QC, unveiling the 2022-2023 Budget in the House of Assembly, said that an additional $251.4m in borrowing will raise this year’s fiscal deficit to $758.6m - a sum equivalent to 6 percent of Bahamian gross domestic product (GDP).

When this is added to the $564m deficit forecast

SEE PAGE 5

Debt strategy was Budget’s ‘big miss’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A GOVERNANCE reformer yesterday argued that the Budget presentation’s “big miss” was its failure to detail how The Bahamas will tackle its $10.5bn national debt and annual interest costs set to hit a record $589m.

Hubert Edwards, the Organisation for Responsible Governance’s (ORG) economic development committee head, told Tribune Business that the failure to go into detail on

The Bahamas’ debt management strategy means the Budget announcement “will not move the needle significantly” in improving the country’s creditworthiness.

“The biggest miss in the Budget presentation by the Prime Minister might be in not having a fuller discussion around debt and the debt management strategy,” he argued. “The sole mention in the Prime Minister’s presentation was to ‘have appointed a private sector debt management committee, assisted by an

SEE PAGE 7

A COMMERCIAL bank chief yesterday questionedwhethertheGovernment’s plan to reimpose Business Licence fees on the sector could revive a situation that caused The Bahamas’ 2018 blacklisting by the European Union (EU).

Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business he was unsure whether the move unveiled in yesterday’s 2022-2023 Budget communication could again result in the ‘ring fencing’” that drew the 27-nation bloc’s ire back in 2018.

That resulted in the thenBusiness Licence regime for commercial banks being disbanded because it was part of a structure that created a preferential tax regime

GOWON BOWE for foreign-owned entities, which enjoyed benefits and concessions that they counterparts operating in the domestic economy did not.

With few details communicated to the commercial banks on how the new Business Licence fee regime will work, Mr Bowe said it was unclear whether the Davis administration had

SEE PAGE 8

‘About time’ high-end tax loopholes closed

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net REALTORS yesterday said it was “about time” that the Government doubled the annual real property tax cap and sought to close “loopholes” that enable high-end condominiums in hotel rental pools to largely avoid tax.

They reacted positively after Prime Minister Philip Davis QC, in unveiling “some new and very targeted fees”, announced

that the maximum annual real real property tax payment will be increased from $60,000 to $120,000 - a 100 percent jump - as part of the 2022-2023 Budget’s efforts to increase yields from multi-million dollar real estate.

Noting that real property tax revenues remain almost 40 percent below the $280m in total annual billings, Mr Davis also revealed the imposition of a “minimum tax fee” - equivalent to 75

SEE PAGE 6

PAGE 2, Thursday, May 26, 2022

THE TRIBUNE

Up to $40k VAT refund for first-time home purchasers

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE PRIME Minister yesterday unveiled multiple measures designed to boost Bahamian home ownership including an up-to $40,000 refund of VAT paid by firsttime buyers on construction services and building materials.

Philip Davis QC, unveiling the 2022-2023 Budget in the House of Assembly, pledged to expand and grant equal incentives to

first-time buyers either purchasing an existing home, renovating a property or acquiring land to build their house on.

“For those who are constructing or renovating their first home, we also are refunding up to $40,000 in cash for any VAT paid for construction services or materials purchased once the occupancy certificate is provided within 18 months of the commencement of construction,” he added.

“We are also increasing the level of exemption

for first home buyers from $250,000 to $300,000, and reducing VAT on property transfers below $1m for individuals.” Under the VAT Act reforms tabled in the House of Assembly, first-time buyers acquiring a property valued between $300,000 and $500,000 will pay a VAT rate of just 4 percent.

The Government is also introducing a tiered scale for VAT payable on property transactions below $1m. While persons buying property valued at less than $100,000 will still pay the current 2.5 percent VAT rate on the sale/purchase, those acquiring at a price between $100,000 and $300,000 will now pay 4 percent.

Non-first time buyers will face a 6 percent VAT rate where the property value falls between $300,000 and $500,000, and 8 percent between $500,000 and $700,000. Properties valued at between $700,000 and $1m will attract 9 percent.

“We are also eliminating VAT on property transfers between joint tenants of property. This is especially important to Bahamians who have inherited land jointly with siblings. We have also simplified the rules around transfers of property with similar but not identical beneficial ownership. We have, as well, eliminated nuisance fees in the Stamp Act for documents unrelated to the transfer of property or registering a financial instrument,” Mr Davis said.

Promising more focused attention on the Family Islands, he added: “We have allocated 10 percent of overall revenue collected in the Family Islands from property tax and road traffic fees to the creation of a Family Island Development Trust Fund in the amount of $200m. This fund will facilitate the Government in making immediate and significant investment in Family Island infrastructure. This fund would be a

Hotel union set to break away from umbrella body

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net THE HOTEL union has served notice that it plans to break away from its umbrella union, the National Congress of Trades Unions of The Bahamas (NCTUB), with

“immediate effect”, it was revealed yesterday.

Dwayne Woods, the NCTUB’s acting president, confirmed to Tribune Business that the Bahamas Hotel, Catering and Allied Workers Union (BHCAWU) sent the umbrella body a letter two weeks ago advising that it would be ending

sub-fund of the National Infrastructure Fund.

“We also propose to leverage the aviation-related revenue to create a fund for aviation infrastructure, which would be another sub-fund of the National Infrastructure Fund. This, combined with the Family Island Development Trust, will accelerate the reconstruction of Family Island airports. It will also end the practice of Family Island infrastructure improvements being made a lesser priority than infrastructure improvements in New Providence.

“It is important to note, however, Madam Speaker, that this does not mean that we will exclude Family Island projects from future capital budgets of the Ministry of Public Works. Far from it. It just means that the Family Islands will have their own dedicated fund to ensure that they keep pace with national development.”

When it came to marine resources, Mr Davis said: “We are increasing royalty fees for the export of seafood, and we are also formally prohibiting the export of conch in commercial quantities in order to encourage sustainable fishing of this precious resource....

“We are reducing the duty on roofing materials, plumbing materials and electrical supplies. This will make it more affordable for everyone in The Bahamas to undertake any construction project. We have also reduced the duty on electric cars with a value of under $70,000 to 10 percent.

“For vehicles over $70,000 the duty will be 25 percent, the same framework that presently exists for all hybrid cars. These duty adjustments are part of a deliberate strategy to reduce national our carbon footprint.”

its affiliation “effective immediately.”

The move came just weeks before the Randol Fawkes Labour Day Parade on June 3, where all unions in The Bahamas traditionally come together in a show of solidarity to support worker’s rights. Darrin Woods, the hotel union’s president, could not be reached for comment on the matter.

But Dwayne Woods said: “They have indeed written us to tell us that their executive team has voted to leave the Congress.”

He confirmed that Darrin Woods had signed the letter on the hotel union’s behalf, and said: “We’re not fighting, but that’s what his executives chose to do.

Apparently there was a rift in the congress from the leadership of Bernard Evans, and from what I was told they didn’t want Mr Evans.”

With the NCTUB’s convention, and leadership election, ultimately resulting in a controversy that is now being disputed before the Supreme Court, Dwayne Woods added: “All of this divided the NCTUB. Mr Evans has resigned and the Congress has now fallen into my lap as the second vice-president. I have been thrust into the position of acting president. I’m trying to pull the Congress back together. The olive branch is extended to everybody.”

This is not being accepted by everyone.

Dwayne Woods said he understood a separate

umbrella union body is being launched and organised by Bahamas Union of Teachers (BUT) president, Belinda Wilson, who is seeking to take other NCTUB union members with her.

Ms Wilson neither confirmed nor denied she was planning to start a new umbrella union body when contacted by Tribune Business yesterday, instead saying she will send a “release in short order”.

That was not receive before press time last night.

Dwayne Woods added: “I guess the BHCWU wants to go behind them. Darrin (Woods) is my brother and we have no malice, but if that’s what his officers in a democratic situation choose to do, we have no control over that. That relationship we have will never be separated because we were brought up in that vein.

“The only union that would have left, or have written to the NCTUB to say that they are leaving, is the BHWCU. Ms Wilson’s union, even though it is rumoured that she is starting this new congress, has not written to the NCTUB to say that they are going anywhere. So we are just waiting to see what is happening because right now nothing is confirmed.

“My thing is united we stand, and divided we fall.

When the court decides when we will go to elections, anybody will have an opportunity to run and not before then.”

THE TRIBUNE

Thursday, May 26, 2022, PAGE 3

PM TARGETS 20% CUT FOR ELECTRICITY COSTS

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Prime Minister yesterday revealed the Government is targeting a further 20 percent reduction in electricity costs to below $0.20 per kilowatt hour via a combination of renewable energy and liquefied natural gas (LNG) related reforms.

Philip Davis QC, addressing the House of Assembly while unveiling the 20222023 Budget, said his administration is essentially picking up where its Minnis predecessor left off by seeking independent power producers (IPPs) from the private sector who will supply Bahamas Power & Light (BPL) with energy generated by solar power and LNG. No mention was made of where negotiations with Shell North America over the proposed new Clifton power plant and LNG terminal, left behind by the former administration,

stand. Neither did BPL’s proposed $535m rate reduction bond (RRB) refinancing feature, but the Prime Minister pledged to mitigate the impact of high global oil prices on Bahamian energy costs.

The rise in global prices to over $100 per barrel as a result of Russia’s Ukraine invasion means BPL faces higher fuel prices should it seek to continue its hedging strategy after July 1, regardless of whether or not it executed the option trades due last September and October under the existing arrangement.

“My government is committed to alleviating and addressing, in a more sustainable manner, the firming trend in global prices including the impact of higher fuel prices on electricity costs,” Mr Davis said, adding that Alfred Sears QC, minister of works and public utilities, will address BPL’s plans “to secure greater operational efficiency” during the Budget debate.

“This will be achieved, in part, by leveraging independent power providers to bring to The Bahamas generation powered by solar power or natural gas,” the Prime Minister added. “Our commitment to energy reform and lowering the cost of electricity to Bahamians across the board is more than just talk.

“The Government shortly on coming to office appointed a Cabinet energy sub-committee that has been focused on advancing our commitment in the Blueprint for Change to transform to LNGpowered generation. The sub-committee is advanced in discussions with providers to develop an LNG bunkering facility, LNG conversion of our generation and incorporating solar solutions.

“It is expected that these initiatives will keep the long-term average cost of electricity below $0.20 per Kwh for The Bahamas, which is a 20 percent reduction from the

current levels. We look to have a definitive agreed framework this fiscal year to announce to the Bahamian people.”

Acknowledging that the high cost and unreliability of energy supply are a major impediment to the ease of conducting business in The Bahamas, Mr Davis planned to employ an $80m Inter-American Development Bank (IDB) loan agreed under the Minnis administration to deepen renewable energy penetration.

“The immediate focus is the introduction and implementation of new models to develop resilient solar PV (photovoltaic) installations in The Bahamas. To

SEE PAGE 9

PHILIP DAVIS QC

Tour operators hail foreign charter VAT

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net BAHAMIAN tour and excursion operators yesterday said that forcing foreign yacht charters to register for and pay VAT is a “welcome move”.

Andoni Lisgaris, president of the Bahamas Excursion Operators Association (BEOA), told Tribune Business: “Obviously, policing this will be the challenge moving forward. Having the Government support us by saying that these vessels should be paying VAT is certainly a step in the right direction.”

Foreign charter operators currently have to pay a fee equivalent to 4 percent of the charter price when in Bahamian waters, plus check-in with the Port Department and Customs.

Yet Prime Minister Philip Davis, QC, unveiling the

2022-2023 Budget, said: “We are clarifying the law on foreign yacht charters to ensure that operators of foreign yacht charters register and pay VAT. Operators will therefore now be subject to the stringent policies of the VAT Act.” Mr Lisgaris added: “We have to now see what’s in the regulations. The first step is to now review them as soon as they get released to see if it speaks to all of the changes that might be required, and then go from there. But certainly it was a welcome move and a little bit of a surprise.

“It’ll be interesting to see the amendment to this.

I know that in addition to making changes to the legislation, they also listed the Boat Registration Act. So it’ll be interesting to see what amendments are being proposed there to see if that may address some of these loopholes and close them.”

The BEOA have been lobbying the Government

for four years, intensifying this effort over the past six months, to make the point that there are millions of dollars in foreign yacht charter fees that go uncollected, with some estimates placing this as high as $50m per year.

Nicholas Pinder, general manager of Born Free Fishing Charters, added: “This is the best thing I’ve heard all day. I think they’ll have to develop the capacity to do it, but it’s a very good start and moving in the right direction, that’s for sure.”

“We can now go back to an even playing field if they keep the VAT. If they keep the 4 percent that the yachts have always been paying, and make them pay VAT on top of the 4 percent, it will be fine. If they only add the VAT it will be better than what it is now, but it still gives the foreigner the same rights as we have as humans. But it’s still a step in the right direction.”

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PAGE 4, Thursday, May 26, 2022

THE TRIBUNE

‘NO DISCONNECT’ DESPITE $200M SURPLUS INCREASE FROM PAGE ONE

But, despite the optimistic outlook, Mr Wilson acknowledged that “putting it on paper doesn’t make it happen” and the Government will “have to work very hard on it” to make its projections a reality and convert persistent annual fiscal deficits into a $278.8m surplus by 2024-2025.

That forecast, contained in yesterday’s Budget, represents a $200m upward revision from the $71.9m surplus projected for the same 2024-2025 Budget year in the Fiscal Strategy Report that was released by the Davis administration just four months ago at endJanuary 2022.

Several other key estimates have also been revised with the Government increasing the projected deficit for the upcoming 2022-2023 fiscal year by almost $150m, raising it from the Fiscal Strategy Report’s $415.2m to $564m in yesterday’s Budget presentation. And the Davis administration is still predicting that it will increase revenues by more than $1bn over the next three fiscal periods - the critical factor in turning the deficit into a surplus.

Prime Minister Philip Davis QC, unveiling the 2022-2023 Budget in the House of Assembly, left the door open to a lower 2022-2023 deficit than projected by saying the proceeds from asset sales such as the pending $100m Grand Lucayan sale - have not been factored into the calculations. Mr Wilson yesterday told Tribune Business that including the resort’s sale would reduce the deficit by a sum equivalent to 1.5 percentage points of gross domestic product (GDP).

However, Michael Pintard, the Opposition’s leader, told this newspaper that the rapid revisions to the Government’s fiscal numbers threatens to create “a disconnect” between yesterday’s Budget and those contained in the Fiscal Strategy Report.

The latter is designed to lay out “the framework” for achieving the Government’s fiscal targets and policy objectives, and he warned that the magnitude of these changes, and the speed at which they have happened, could threaten The Bahamas’ credibility with the likes of the International Monetary Fund (IMF), credit rating agencies such

as Moody’s and Standard & Poor’s (S&P), and lenders/investors who hold the country’s foreign currency bonds.

“The reality is that it lays out the Government’s plan of action in the fiscal space, and that’s what people are going to assess us on,” Mr Pintard told Tribune Business of the Fiscal Strategy Report. “It’s not wise or prudent to move away from it at Budget time, as how do you believe them in future?

“The Fiscal Strategy Report is supposed to set the framework and tone for what you are going to do when governing. I think we will have a credibility problem.” This, the Opposition leader added, would result both locally and internationally with investors, creditors and multilateral agencies unsure whether they could rely on the Government’s figures. “It really sends the wrong message,” Mr Pintard added.

Mr Wilson, though, said the adjustments were justified by the improving economy. “The key thing is that the economy has rebounded a lot quicker than anybody thought notwithstanding the COVID variants,” he told Tribune Business. “Tourism has

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been performing exceptionally well, and because tourism has been performing exceptionally well, revenue has been performing exceptionally well.

“We believe the economy will return to pre-pandemic levels and is coming back a lot quicker than anticipated initially. If you look at this year’s Budget, even though the Government announced the sale of the Grand Lucayan it has not placed those revenues in the Budget. If it had placed them in the Budget, the deficit would go down by 1.5 percent” of GDP. Suggesting that the deficit will thus likely be lower than the forecast $564m due to “a very conservative approach” to revenue forecasts, Mr Wilson added that the near-$500m VAT increase projected for the upcoming 2022-2023 fiscal year was based on the fact this tax had generated 90 percent of full-year projection in just the first three quarters of 2021-2022.

“When you look at that in context, you realise the $1.411bn is very achievable, especially when you factor in any increase because of inflation,” the financial secretary said. The Prime Minister, in unveiling the Budget, said the Government’s revenues for the 12 months to end-June 2022 are forecast to come in some $208.6m ahead of the Minnis administration’s projections made in May last year.

The forecast $2.455bn total represents a 9.4 percent increase over initial Budget forecasts, with the increase driven by the post-COVID economic re-opening, the easing of pandemic-related restrictions and the boost that inflation creates in a consumption-based tax regime such as The Bahamas. With VAT and import tariffs levied on the price of goods, any increase in the latter inevitably drives a greater tax.

Mr Davis spent relatively little time during yesterday’s presentation on the 2022-2023 forecasts. “Total revenue is projected at $2.804bn, a 19.9 percent increase over the prior fiscal year when the economy was in the early stages of an economic rebound from the COVID-19 pandemic,” he said, adding that fee increases unveiled yesterday, together with stronger economic growth and improved enforcement/compliance, will drive improvement.

“Total expenditure is forecast at $3.368bn, with recurrent expenditure projected at $2.997bn, and capital expenditure estimated at $371.1m. As a result of these operations, which incorporate prudent fiscal management principles, the fiscal deficit under the current budget is estimated at $564.3m or 4.3 percent of GDP.” The Government is again relying on increased

economic output to keep the debt-to-GDP ratio low.

However, Mr Pintard said the Budget unveiled no actions that would enable the Government within three years to achieve a $279m fiscal surplus. This means revenues would exceed spending for perhaps the first time in The Bahamas’ post-Independence history.

“There’s nothing they laid out on how they’re going to get there,” the Opposition leader argued, pointing to the absence of spending cuts or significant revenue enhancements.

“They couldn’t get there in the Fiscal Strategy Report, and the certainly cannot get there in this Budget. It’s unwise that they have this elevated, exaggerated outlook when nothing suggests they are going to get this outcome.”

Another source, speaking on condition of anonymity, was more blunt about the revised targets. “That’s fantasy. That’s pure fantasy,” they said of the 2024-2025 revised surplus. “To fund their spending they have had to ramp up this year’s deficit. I think the most telling there is the divergence from the Fiscal Strategy Report. That’s going to put a lot of pressure against our credit rating. When they see divergence like this, the credit rating agencies will come knocking on the door.”

THE TRIBUNE

Thursday, May 26, 2022, PAGE 5

$100M SOE SUBSIDY CUT GOES IN OPPOSITE DIRECTION FROM PAGE ONE

for the upcoming 20222023 fiscal year, and those incurred during the two years covered by Hurricane Dorian and the COVID-19 pandemic, The Bahamas will have added $3.47bn to its national debt in just four years. That latter sum represents almost 30 percent of the Government’s projected $11.609bn direct debt at June 30,2013.

Loss-making SOEs have been one factor driving this annual debt decrease, and the Davis administration is increasing total taxpayer subsidies to them in the upcoming 2022-2023 fiscal year by 7 percent to $457.183m compared to the $426.202m forecast for the current Budget cycle.

Of the latter figure, some $398.251m had already been advanced as at end-March 2022.

Taxpayer funding is thus going in the opposite direction to the cost savings drive pledged in the Fiscal Strategy Report. Most of the increase is directed to three agencies: The Public Hospitals Authority ($9m to $232.456m); the Bahamas Public Parks and Beaches Authority ($8.8m to $24m); and the Water & Sewerage Corporation ($8m to $32m).

Acknowledging that SOE taxpayer subsidies were going in the wrong direction, Mr Wilson said the Government had little option but to seek Parliament’s approval for additional monies and “put a serious dent” in the unfunded arrears owed to vendors by the likes of the Water & Sewerage Corporation.

“We have a huge overhang with Water & Sewerage,” the financial secretary told Tribune Business. “They owe a very significant amount to their vendors; Miya, Consolidated Water. We have to

pay them. We just cannot ignore these very significant amounts.

“Reducing subsidies to SOEs is still a priority, but the reality is that coming out of the pandemic there were huge vendor arrears that we cannot keep ignoring.... This will put a serious dent in the arrears. It will clear a substantial portion and leave as clean a slate as possible. It will never be completely clear, but as clean a slate as possible.”

Mr Davis said the need for further supplementary borrowing approval, as required under the Public Financial Management Act, meant the 2021-2022 fiscal deficit - which measures by how much government spending exceeds its revenue income - will jump from $334.3m at end-March to a projected $758.6m at yearend. The latter, though, will still be $100m less than the revised 2021-2022 fiscal deficit unveiled at the first supplemental Budget.

“We still have a number of inherited arrears which we believe it is important to liquidate,” he added.

“In this regard, we will be seeking parliamentary approval for a supplementary Budget for additional recurrent expenditure of $216.928m and capital expenditure of $34.49m “These balances are owed to hard-working women and men, who have given their time, energy and resources to contribute to the development of this nation, and months later still haven’t been paid. This harmful practice cannot be allowed to continue.... Just as our recently-established Credit Bureau encourages citizens to make timely payments, so too must we in government be timely in paying our bills.”

Apart from the $45m owed to the Water & Sewerage Corporation, this

$251.4m also includes some $56.7m owed in insurance premium payments for public servants. Mr Wilson revealed that the latter liability “popped up four weeks ago” as the insurance agreement was “not completely in place” prior to that time.

The Government has also chosen the final remaining month of the 2021-2022 fiscal year as the time to raise $30m for completing the Andre Rodgers Baseball Stadium, while another $19m represents outstanding payments owed to Doctor’s Hospital for COVID-19 emergency support.

Breaking down how the borrowed sum will be employed further, Mr Davis said $6.4m will cover outstanding rent payments; another $6m will finance outstanding legal claims owed by the Government; and $4m will be dedicated to the restoration and refurbishment of public clinics.

The Prime Minister also foreshadowed reforms to the Public Finance Management Act that will result in all taxes and fees more than one year past due being transferred, when collected, into a “sinking fund” and used to pay future government arrears.

“Going forward, the new Public Finance Management Act will allow all tax arrears collected to be deposited directly into the sinking fund,” he added. These funds will be directly earmarked to the settlement of debt, because in many cases we have already borrowed to settle the arrears. This amendment would increase fiscal discipline, as future governments would not be able to

rely on arrears to fund current expenditure.”

Hubert Edwards, the Organisation for Responsible Governance’s (ORG) economic development committee head, yesterday told Tribune Business that the need for a second supplemental Budget in just eight-and-half months raised questions about the strength of the

Government’s “liability management system”.

“The supplemental budget ask of $252m for outstanding arrears, while done out of necessity, is indicative of the Government’s liability management process and carries important credit market information,” he said, hinting at the possibility of a negative reaction from credit rating agencies,

multilateral lenders and lenders/creditors.

“As part of a broader discussion around debt management, targeting especially external lenders, a well-developed position on improved effectiveness in managing liability, going forward, will have positive implications and add credibility to the debt management process.”

PAGE 6, Thursday, May 26, 2022

‘ABOUT TIME’ HIGH-END TAX LOOPHOLES CLOSED FROM PAGE ONE percent of the subject unit’s assessed value for property tax purposes - as a means to extract revenues from condos, apartments and other high-end real estate that are normally exempt from the latter levy because they are placed in hotel rental pools.

He explained that this “minimum tax fee” will only kick-in if the unit’s real property tax value is greater than the VAT levied on the rental income generated. This meant, Mr Davis said, that if for example a property was assessed for $100, and failed to generate VAT equivalent to or greater than this value, its owner would pay $75 as the “minimum tax fee” to the Government.

“We are trying to close the loopholes we have, and for high-end properties this is one way of doing it,” Mr Davis told the House of Assembly during his Budget presentation. “There is a cap on real property tax. We are going to increase that cap from $60,000 to $120,000.

To reach that level, your house has to be valued at over $20m.

“We are now imposing a minimum tax fee of 75 percent of the real property tax assessment for highend properties, which are exempt from property tax because they are in a rental pool, if these properties do not generate VAT revenue equivalent to the real property tax assessment. If part of a rental pool, and your condo and apartment

is being rented, we expect VAT to be paid on the rental.

“To demonstrate that we are serious about collecting property tax, we are updating the law to simplify the process by which we can take action against all classes of property owners, with the exception of Bahamian owner-occupied properties.”

The “minimum tax fee” will likely capture unit owners in high-end developments such as Albany and Baker’s Bay where such properties are placed into a rental pool and leased out to other visitors when the proprietor is not there. Tribune Business sources have revealed that government officials privately admit capturing taxes on such arrangements

is problematic because it is almost impossible to determine when such units have been placed in the rental pool and/or are being leased.

Christopher Armaly, a prominent broker and appraiser, who previously called for the annual $60,000 annual real property tax cap to be raised to around the level now being set by the Government, told this newspaper of the move: “It’s about time, don’t you think, for multi-million properties?”

Legislation giving effect to this change, which was tabled in Parliament yesterday along with the Budget, asserts that moving the maximum annual payment to $120,000 “only increases the tax for properties valued over $6m”. Mr Armaly added: “It’s a start in the right direction. It certainly puts it [the threshold] a little more in line with the $100,000-$120,000 a year area, which should be where it starts.”

Mr Armaly previously told this newspaper that the present $60,000 annual real property tax cap that results in middle class Bahamians effectively paying a higher tax rate than persons with homes valued $10m and above.

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All owner-occupied homes, meaning those residences used exclusively as dwellings by their owners, enjoy a tax break on the first $250,000 of their property’s valuation. A rate of 0.625 percent is applied to the next $250,000, and this increases to 1 percent for the remaining portion of the valuation above $500,000.

However, the $60,000 current maximum limit on annual real property tax payments effectively leaves a $40m property owner’s tax rate at just 0.15 percent. This is four times’ below the rate applied to the $250,000-$500,000 portion of a property’s worth.

Raising the cap to $120,000 will double this rate to 0.3 percent, which is still below that being levied on middle class Bahamians Applying the $60,000 cap to properties valued at $30m, $20m and $10m results in effective tax rates of 0.2 percent; 0.3 percent; and 0.6 percent respectively.

These will now double to 0.4 percent; 0.6 percent; and 1.2 percent, with the latter two now almost matching or exceeding the property tax rate paid on owneroccupied residences valued between $250,000 and $500,000.

“Should you and I pay the same rate as the mega wealthy?” Mr Armaly reiterated yesterday. “I’m not asking for the wealthy to be over-taxed. I’m asking for people like you and me to be taxed at the same rate.”

Meanwhile Mario Carey, the Better Homes and Gardens Real Estate MCR Group Bahamas principal, yesterday praised the Government for seeking to eliminate tax loopholes enjoyed by high-end property owners with its “minimum tax fee” concept.

“I think the Government is trying to find a way to level the playing field and make sure that everybody contributes to the cost of running the country,” he added. “I think that’s what they’re trying to do, and

THE TRIBUNE

maybe this is a creative way to do it.

“Based on various Heads of Agreement that have been signed, and we don’t know what the contents are, we know certain developments have been enjoying exemptions while other people are carrying the full burden of paying tax. Most of those Heads of Agreement, you cannot necessarily change them, which is not a good thing they should be more flexible - but to make everyone pay their fair share, that’s going in the right direction.”

Mr Carey also hailed the reduction of real property tax rates for commercial properties worth more than $500,000 as “a brilliant move”. The rate will be halved, falling from 2 percent to 1 percent on buildings valued between $500,000 and $2m, while those worth more than that sum will enjoy a 1.5 percent rate.

“The Bahamas has always prided itself on having a strong middle class,” he added, “and we need ‘Mom and Pop’ shops.

We’re in a fragile place if we lose our middle class.

We cannot keep squeezing them. We need to have a stable middle class, and unfortunately it’s difficult to run a business.”

Mr Davis said yesterday: “We want to encourage investment by Bahamians, which is why we have reduced real property rates for commercial property, which will come into effect for the 2022 tax year.”

The Government also yesterday moved to increase the portion of an owner-occupied property’s value that is exempt from real property tax from $250,000 to $300,000, with the change set to take effect from July 1 when the Budget is passed into law.

THE TRIBUNE

DEBT STRATEGY WAS BUDGET’S ‘BIG MISS’

FROM PAGE ONE

significantly” in improving the country’s creditworthiness.

“The biggest miss in the Budget presentation by the Prime Minister might be in not having a fuller discussion around debt and the debt management strategy,” he argued. “The sole mention in the Prime Minister’s presentation was to ‘have appointed a private sector debt management committee, assisted by an independent financial advisor, who will devise clear objectives and a strategy to manage the high levels of debt accumulated in the past three years’.

“This might not be well received by the credit market,” he added. “The statement suggests that there is work to be done.

Juxtaposed against the importance and state of the debt stock, a more tangible position would be preferred. Projected deficits for fiscal year 2021-2022 of $756.6m, and 2022-2023 of $564.3m easily makes this case.

“Laying out a persuasive narrative around debt management, an issue where seemingly the IMF and the administration are yet to be on the same page, would have been valuable. There is still an opportunity to do so in the [Budget] debate and this should be exploited to maximum effect. We should not, however, underestimate the influence of first pronouncements.

“This exclusion might represent the most significant area of risk to government’s overall plans as improvements in our credit circumstances are urgently needed to start creating fiscal space

and greater flexibility. This should also be seen through a creditworthiness lens. If the question is raised [as to] how this Budget has improved the creditworthiness of the country, an honest answer would be that the projected trajectory is positive but overall the needle will not move significantly. The inability to do that at this stage demands greater focus on lenders and the credit market.”

Mr Edwards’ comments came as the interest costs on The Bahamas’ present $10.5bn national debt, which is now projected to peak at $11.734bn in the 2023-2024 fiscal year, are set to hit an all-time high of $588.988m in the upcoming 2022-2023 fiscal year. This represents a 14.9 percent increase on the $512.468m in debt servicing costs projected for the current fiscal year.

The projected $589m interest payout over the 12 months to end-June 2022 also represents 19.7 percent - almost $1 out of every $5 in recurrent spending over that period - and highlights the extent to which the national debt is sucking funding away from key public services.

Noting the Government’s efforts to cushion vulnerable Bahamians from soaring inflationary pressures, Mr Edwards said: “Overall, the Budget was excellent in dealing with social support and seeking to protect various segments of the population... The tension with this is that given the decision to not hike taxes to levels it could have, these measures placed pressure on the limited fiscal space.

“Again, this is indicative of a very delicate balancing act to be performed as we seek to navigate the

tensions created by the high inflationary environment; a recovering economy with revenue performances buoyed by inflation and therefore temporary to the extent that high inflation lasts; the contentious issue of tax increases and their adverse impact on political capital; and the pressure of having high debt with associated high yields and high rollover risk.”

Prime Minister Philip Davis QC, in outlining the Government’s 20212022 fiscal performance, said the economy’s postCOVID reflating and end to many restrictions had resulted in total revenues growing by $617.6m or 50.2 percent to $1.847bn during the first nine months when compared to the pandemic-ravaged 2020-2021 period.

“This largely reflected improvements in tax revenue of $526.4m or 50.9 percent, and non-tax revenue increases of $90.9m or 46.5 percent,” Mr Davis said, adding that by immediately ending the COVID-related curfew and easing restrictions on businesses after taking office, the Government’s surplus cash balance had improved by nearly $35m come October 2021.

“Notwithstanding the reduction in the nominal rate of VAT from 12 percent to 10 percent in January 2022, VAT receipts increased by $366.3m or 78 percent to $836.1m over the ninemonth period. Excise taxes were estimated at $46.2m .

Gaming taxes improved by $21m to total $37.5m.

“Taxes on international trade and transactions broadened by $183.5m to $346.6m, and 83.1 percent of

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budget. The improved trade tax performance is largely explained by increases in Customs and other import duty collections of $46.7m to $180.9m, and improvements in departure tax collections of $42.8m to $48.7m.”

However, interest payments on the Government’s growing debt grew by $69.7m to $333.8m during the nine months to end-March 2022. “Government subsidies, which

Thursday, May 26, 2022, PAGE 7

include transfers to government-owned and/or controlled enterprises that provide commercial goods and services to the public, also increased by $21.3m to $351.3m,” Mr Davis added.

“Subsidies to public non-financial corporations were higher by $25.3m at $335.9m, owing to the unwinding of certain COVID-19 support programmes.. To finance operations, government net debt increased over the

nine months by $677.4m, resulting in a total direct charge, or direct claims on government at end-March 2022, of just over $10.5bn or 87.5 percent of GDP. “This represents a significant decline from the position at the end of June 2021, when the Government’s debt was 101 percent of GDP. I’ll say that again: At the end of June 2021, debt was at 101 percent of GDP and now we are at 87.5 percent of GDP.”

PAGE 8, Thursday, May 26, 2022

BLACKLIST ‘FACTOR’ FEAR ON BANK BUSINESS LICENCE FROM PAGE ONE “factored in” the so-called ‘ring fencing’ issue to its strategy.

“What has been communicated to the banks is that it’s not a reinstatement of the Business Licence; it’s an additional tax on top of what was changed in 2018,” he told this newspaper. “In 2018, we had been blacklisted for harmful tax practices, and one component was ring fencing - the tax system was not consistent between domestic and international business.

“The Business Licence regime was disbanded for both so that we carry out and remove ring fencing.

Fairly comprehensive studies and research was done so

that we were creating something that was correct for ring fencing. The Business Licence was disbanded, and there was a fee structure implemented according to the nature of your licence.”

Warning the Government to “be careful” about bringing the Business Licence fee back, he questioned whether it had conducted sufficient research to determine if the change will run afoul of the “ring fencing issue that caused us to be blacklisted four years ago”.

Prime Minister Philip Davis QC, in unveiling the reforms as part of the 20222023 Budget presentation yesterday, gave few details as to how this will be implemented and operate. “We

are also introducing Business Licences for financial service providers, and reintroducing Business Licence fees for commercial banks,” he said.

“To ensure equity with insurance companies we are eliminating the premium tax, and are now requiring insurance companies to pay Business Licence fees.” The reforms to the Business Licence Act, which will give effect to these changes and were tabled in Parliament yesterday, mandate that all Bahamasdomiciled financial services entities will pay a $2,500 “tax”.

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and nature of their business activity. So-called “authorised agents” operating under the Banks and Trust Companies Regulation Act 2020 will pay a $10,000 annual licence fee, while “other public banks and trust companies” will pay $5,000. Authorised dealers must part with a sum equal to 2.25 percent “of total revenues net of interest expenses”.

Meanwhile, money lenders; money transmission businesses; insurance companies and fund administrators, investment managers and advisors working with Bahamian dollar assets all have to pay a Business Licence fee matching 2.25 percent of turnover.

Mr Bowe yesterday said his “three issues” with the Business Licence fee plan, including the ‘ring fencing’ concern, was the lack of consultation with the commercial banking industry and absence of detail. Critically important, he added, was the definition of turnover or gross revenues, and

whether the fee will be based on gross interest income or net interest income and if loan loss provisions will be factored into the equation.

Bahamian insurers, meanwhile, said they also needed to learn more about how the elimination of the existing 3 percent premium tax, and its replacement by “2.25 percent of turnover”, will work. Patrick Ward, Bahamas First’s president and chief executive, told Tribune Business there was insufficient time to implement the changes prior to the 20222023 fiscal year’s start on July 1.

“We’re obviously going to have to study that in more detail,” Mr Ward said of the proposed Business Licence fee change. “To what extent is that going to apply to gross or net earnings. That’s an important distinction.

Outside of that we don’t have an understanding of what impact this is going to have.

“We couldn’t possibly say what difference this is going to make without knowing

THE TRIBUNE the full details of that proposal.” Asked whether there was sufficient time for the Bahamian insurance industry to adjust to the changes, the Bahamas First chief added: “No, and that’s something again that we will have to take a look at.

“That would involve a change in the computer system in terms of programming. Without the details it’s difficult to say, but I can say now that it’s unlikely to be enough time to make the change.” Anton Saunders, RoyalStar Assurance’s managing director, told this newspaper that beside informing the insurance industry it was mulling such a change there had been no consultation with the Government on the Business Licence switch.

“This is the first time I’ve seen it,” he added. “I know they had a meeting saying they were proposing it, but there was no consultation. I cannot comment.

We have no idea what they are proposing and what is the turnover rate. We really need more detail on what they’re proposing and what the realities are going to be.”

THE TRIBUNE

Thursday, May 26, 2022, PAGE 9

PM targets 20% cut for electricity costs FROM PAGE THREE accomplish this an assessment of energy systems in New Providence and the Family Islands will need to be done. This work will start in the southeastern islands, namely Inagua, Mayaguana, Acklins, Crooked Island and Long

Cay,” the Prime Minister added.

“This year we will deploy in those islands public decentralised solar PV plants; rooftop systems and innovative microgrids with storage capacity; and grid modernisation technologies to improve the reliability and resiliency of the power network on these islands.

“Additionally, pilot installations of solar photovoltaic systems on public buildings in Andros will also be carried out. Thereafter, the installations of solar photovoltaic systems will be extended to the central and northern Bahamas.”

Turning to food security, and the Government’s

efforts to fight inflation by lowering a range of foodrelated import tariffs, Mr Davis said: “We also recognise that an important part of our tourism experience is our unique culinary products, and we need to ensure that the sector remains competitive. We have also therefore reduced the duty on food items used mostly in the restaurant and tourism sector.

“Among the list of foods are those produced locally, such as chicken parts. Local production of chicken is less than 5 percent of total consumption, but we want and need to expand local

production of all agriculture products. In this regard, the Government will provide support to local poultry producers by assisting in lowering the cost of electricity, one of the primary inputs in organised poultry production.”

He continued: “In the new Budget, we are continuing to provide support to farms by allocating $500,000 to secure broilers, and $600,000 in the form of livestock to increase the supply of fresh meats in the market. We are investing $300,000 to restore the feed mill at our Gladstone Road location to ensure

that farmers have ample domestic supply of feed for livestock, and we are also providing $500,000 in grant support to farmers.

“Through the use of modern technology and resources, which we have in abundance, we plan to reduce our food import bills. This, Madam Speaker, is how you ensure food security.

This, Madam Speaker, is how you ensure food sovereignty. This, Madam Speaker, is how we will feed our nation and bring down the cost of living.”

FDA CHIEF STRUGGLES TO EXPLAIN SLOW RESPONSE ON BABY FORMULA

By MATTHEW PERRONE AP Health Writer WASHINGTON (AP) — The head of the Food and Drug Administration faced bipartisan fury from House lawmakers Wednesday over months of delays investigating problems at the nation’s largest baby formula plant that prompted an ongoing shortage.

FDA Commissioner Robert Califf laid out a series of setbacks in congressional testimony that slowed his agency’s response, including a COVID-19 outbreak at the plant and a whistleblower complaint that didn’t reach FDA leadership because it was apparently lost in the mail.

Califf testified before a House subcommittee investigating the shortage, which has snowballed into a national political controversy and forced the U.S. military to begin airlifting supplies from Europe.

The shortage largely stems from Abbott’s Michigan plant, which the FDA shut down in February due to contamination issues.

Under fire from Congress, parents and the media, Califf gave the first detailed account Wednesday of why his agency took months to inspect and shutter the plant despite learning of potential problems as early as September.

The FDA’s response was: “Too slow and there were decisions that were suboptimal along the way,” Califf told lawmakers.

The FDA and President Joe Biden face mounting political pressure to explain why they didn’t intervene sooner to head off the supply crisis.

“Why did it take an onslaught of national media attention for the Biden administration to act with a sense of urgency required to address an infant formula shortage?” asked Rep. Morgan Griffith, R-Virginia, the committee’s ranking Republican.

Califf said the agency had been trying to monitor formula supplies since 2020 when COVID-related disruptions first emerged, but regulators have limited visibility into company supply chains.

The House panel also heard from three formula manufacturers, including a top Abbott Nutrition executive who apologized to parents for the shortage.

“We let you down,” said Abbott vice president Christopher Calamari. “We are deeply sorry.”

Calamari repeatedly sidestepped questions about whether any employees were disciplined or fired over the problems at the plant, which included

standing water, a leaky roof and damaged equipment.

FDA staff began honing in on Abbott’s plant last fall while tracking several bacterial infections in infants who had consumed formula from the facility. The four cases occurred between September and January, causing hospitalizations and two deaths.

The FDA planned to begin inspecting the Sturgis, Michigan, plant on Dec. 30, according to Califf’s testimony. But Abbott warned that about a dozen plant employees had tested positive for COVID-19 and requested a delay. As a result, the FDA didn’t begin its inspection until Jan. 31.

After detecting positive samples of a rare-but-dangerous bacteria in multiple parts of the plant, the FDA closed the facility and Abbott announced a massive recall of its formula on Feb. 17.

“We knew that ceasing plant operations would create supply problems but we had no choice given the insanitary conditions,” said Califf, calling the problems “shocking” and “unacceptable.”

Abbott and the FDA have reached an agreement to reopen the plant next week, under which the company must regularly undergo outside safety audits.

Califf also struggled to explain delays in following up on a whistleblower complaint alleging numerous safety violations at Abbott’s plant, including employees falsifying records and failing to test formula before shipment.

Several FDA staffers reviewed the complaint in late October when it was sent to a regional FDA office, but an interview didn’t take place until two months later, in part due to the whistleblower’s scheduling conflicts.

Senior FDA officials eventually received the complaint via email, but not until February due to “an isolated failure in FDA’s mailroom, likely due to COVID-19 staffing issues,” according to the FDA testimony. A mailed copy addressed to then-acting commissioner Dr. Janet Woodcock has still not been located.

Political outrage over the shortage has landed squarely on the FDA and Califf, who was confirmed to the FDA role for a second time in February. The problems have escalated into a political firestorm for the White House, which has invoked the Defense Production Act and emergency import measures.

The FDA contacted the U.S. Department of Agriculture on Feb. 11.

MICHELLE Saenz of Santee, Calif. buys baby formula at a grocery story across the border, Tuesday, May 24, 2022, in Tijuana, Mexico. As the baby formula shortage continues in the United States, some parents are opting to cross the border into Mexico, where the shelves are still stocked with options to feed their babies.

Photo:Gregory Bull/AP

about a potential shortage, just days before Abbott’s recall, according to FDA’s timeline.

Califf said the FDA requested new authorities, funding and staff to track supply chain data that could have helped get ahead of

the problem, but noted Congress has not provided them.

Several lawmakers raised longstanding concerns that the FDA’s food program — which oversees most U.S. foods except meat, poultry

and eggs — is underfunded and needs restructuring.

The program has a convoluted leadership structure in which there is a director of FDA’s Center for Food Safety and Applied Nutrition and a separate deputy commissioner for “food

policy and response.” The deputy commissioner has more of a safety focus, but has no direct authority over food center staff nor field staff who inspect company plants.

PAGE 12, Thursday, May 26, 2022

THE TRIBUNE

ADMINISTRATION OPPOSES AIRLINES IN LAWSUIT OVER CREW BREAKS

By The Associated Press THE Biden administration has sided against the airline industry and urged the U.S. Supreme Court on Wednesday to uphold a California law that would provide more rest and meal breaks than airline crews are guaranteed under federal rules.

The U.S. solicitor general and other administration officials said in a filing that California's law is not preempted by the Federal Aviation Administration's authority to regulate airline safety.

A federal appeals court ruled in 2021 that California was within its rights to apply a law on employee

rest and meal breaks to the airline industry. The original defendant, Virgin America, was later bought

by Alaska Airlines, which asked the Supreme Court to overturn the decision.

The administration asked the court to deny the airline's appeal to hear the case or send the matter back to lower courts for

further consideration. The Trump administration had sided with the airlines when the case went before the appeals court.

The airline industry, represented by trade group Airlines for America, has lobbied to overturn the appeals court ruling.

Airlines worry about a patchwork of different state rules, and the trade group says the California law would cause airlines to reduce flights and raise fares.

The trade group said Wednesday, "The conflict between federal and state law is a critical issue with nationwide implications," and it hopes that the Supreme Court will overturn the lower court's ruling.

Under the ruling by the 9th U.S. Circuit Court of Appeals in San Francisco,

AMERICAN Airlines ticket agent Henry Gemdron, left, works with a customer at Miami International Airport in Miami, on Sept.

30, 2020. The Biden administration is siding against the airline industry in a case that involves whether California-based flight crews should get the rest breaks that are required under state law. The airlines say they should not — that only the federal government can regulate the airline industry. On Wednesday, May 25, 2022 the Biden administration asked the U.S. Supreme Court to let the California law stand or send the matter back to lower courts for more consideration.

Photo:Lynne Sladky/AP airlines would have to release California-based flight crews from all job duties — even during flights — for 10 minutes every four hours, a 30-minute meal break every five hours, and another meal break after 10 hours.

FAA rules set a maximum work day of 14 hours for flight attendants during which they can take meal breaks but must remain on duty. That saves airlines the cost of adding flight attendants to cover for those who are off-duty.

THE TRIBUNE

Thursday, May 26, 2022, PAGE 13

UNIONIZED STARBUCKS STORES FACE HARD WORK OF BARGAINING

By DEE-ANN DURBIN AP Business Writer IT'S become a common sight: jubilant Starbucks workers celebrating after successful votes to unionize at dozens of U.S. stores.

But when the celebrations die down, a daunting hurdle remains: To win the changes they seek — like better pay and more reliable schedules — unionized stores must sit down with Starbucks and negotiate a contract.

It's a painstaking process that can take years.

"The meat is at the bargaining table," said AJ Jones, Starbucks' senior vice president of global communications and a former consultant to companies during labor negotiations.

At least 85 of Starbucks' 9,000 company-run U.S. stores — representing 7,444

workers — have voted to unionize since December, according to the National Labor Relations Board, and at least 10 stores have rejected the union. Many more elections are coming; at least 268 stores across the U.S. have petitioned the NLRB to hold union elections.

The labor board says it has officially certified 64 of those 85 elections, which means Starbucks must begin bargaining with the union at those stores. So far, just three — two in Buffalo, New York, and one in Mesa, Arizona — have begun the process; many others are talking to Starbucks about dates to begin negotiating, according to Workers United, which represents the unionized stores.

All this is happening amid tensions between Workers

United and the Seattle coffee giant, which opposes unionization. Already, the NLRB has filed 56 complaints against Starbucks for various labor law violations, including firing workers for union activity. Starbucks has filed two complaints against the union, saying labor organizers harassed and intimidated workers at some stores.

Starbucks CEO Howard Schultz, a longtime union foe, said during a corporate earnings call in May that the company respects the rights of Starbucks' employees and will bargain where it's required to. But he also insisted that employees don't need a union to get the best-in-class wages and benefits Starbucks provides.

"Sharing success through wins and benefits with our partners is among our core

values, and has been for 50 years," Schultz said.

Schultz then announced $200 million in new investments for non-union stores, including raises for veteran employees and more training time for new baristas.

The company even promised one of the union's priorities — credit card tipping — before the end of this year.

Schultz said federal labor law prohibits the company from automatically sharing those investments with

unionized stores. But labor experts say that's a classic anti-union tactic, and Starbucks could easily offer the new benefits as part of the bargaining process.

Joe Thompson, a Starbucks worker who recently helped organize successful union elections at two stores in Santa Cruz, California, said the announcement confused and upset workers — and, for many, underscored the need for a union.

"They're literally threatening to improve the

material conditions at nonunion stores," Thompson said. "But they can take those benefits away at any point. If we have our contract, they can't take those things away."

Even when workers do successfully organize, there's no guarantee it will stick, as evidenced in 1987 when Starbucks employees voted to decertify the union that represented a handful of Seattle stores just two years after voting it in.

PAGE 14, Thursday, May 26, 2022

THE TRIBUNE

Stocks climb as Fed minutes show determination on rates

By DAMIAN J. TROISE AND ALEX VEIGA AP Business Writers NEW YORK (AP) — Stocks ended broadly higher on Wall Street Wednesday after minutes from the Federal Reserve’s most recent meeting signaled the central bank intends to move “expeditiously” to raise interest rates back to more neutral levels in its fight to tame inflation.

The S&P 500 rose 0.9%, while the Dow Jones

Industrial Average rose 0.6%. The Nasdaq climbed 1.5%. The indexes, which recovered after being in the red in the early going, are on pace for a weekly gain, despite more up-and-down trading this week.

The minutes from the Fed meeting earlier this month show most of the officials agreed that halfpoint increases to the Fed’s benchmark short-term rate “would likely be appropriate” at the central bank’s next two meetings, in June and July. Such an increase

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would be double the usual hike.

The central bank has begun raising interest rates in a bid to stamp out the highest inflation in four decades, so traders are keen to gain fresh insight into Fed officials’ thinking. Still, the Fed minutes didn’t reveal any major surprises.

“The market’s showing a relatively muted reaction to what was already embedded in the public sphere,” said Bill Northey, senior investment director at U.S. Bank Wealth Management.

The S&P 500 rose 37.25 points to 3,978.73. The Dow gained 191.66 points to 32,120.28. The Nasdaq rose 170.29 points to 11,434.74.

Small-company stocks rose far more than the rest of the market, a sign of bullishness on the economy.

The Russell 2000 gained 34.34 points, or 2%, to 1,799.16.

The yield on the 10-year Treasury, which helps set

A U.S. flag waves outside the New York Stock Exchange, Monday, Jan. 24, 2022, in New York. Stocks were moving between small gains and losses in early trading Wednesday, May 25, on Wall Street, keeping most of the major indexes in the green for the week so far.

Photo:John Minchillo/AP mortgage rates, slipped to 2.75% from 2.76% late Tuesday.

The broader market remains volatile with investors on edge because of

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, SHANIQUE MCKENZIE of Australia Avenue, P.O. Box EE-16993, Nassau, Bahamas, intend to change my child’s name from ANTHONY SIDNEY MCKENZIE to ANTHONY SIDNEY DELANCEY. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O. Box N-742, Nassau, New Providence, Bahamas no later than thirty (30) days after the date of publication of this notice.

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, LESNIQUE SHEPHERD of Hannah Road #3, Nassau, Bahamas, intend to change my child’s name from KYLIE GRACE MCFARLANE to KYLIE GRACE MAJOR. If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O. Box N-742, Nassau, New Providence, Bahamas no later than thirty (30) days after the date of publication of this notice.

MARKET REPORT www.bisxbahamas.com

WEDNESDAY, 25 MAY 2022

BISX ALL SHARE INDEX: BISX LISTED & TRADED SECURITIES 52WK HI 6.70 53.00 2.05 2.90 2.60 6.10 10.05 3.50 9.02 3.10 8.00 16.60 2.59 10.25 11.25 10.85 15.20 4.00 11.00 16.50

52WK LOW 4.75 32.12 1.49 2.20 1.30 5.75 6.96 2.82 4.25 2.27 5.94 9.75 1.99 6.50 10.02 9.01 13.10 3.50 8.00 15.50

SECURITY AML Foods Limited APD Limited Benchmark Bahamas First Holdings Limited Bank of Bahamas Bahamas Property Fund Bahamas Waste Cable Bahamas Commonwealth Brewery Commonwealth Bank Colina Holdings CIBC FirstCaribbean Bank Consolidated Water BDRs Doctor's Hospital Emera Incorporated Famguard Fidelity Bank (Bahamas) Limited Focol Finco J. S. Johnson

PREFERENCE SHARES 1.00

1.00

1000.00 1000.00

1000.00 1000.00

1.00 10.00 1.00

1.00 10.00 1.00

Bahamas First Holdings Preference Cable Bahamas Series 6 Cable Bahamas Series 9 Colina Holdings Class A Fidelity Bank Bahamas Class A Focol Class B

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00 100.00

52WK LOW 100.00 100.00

SECURITY Fidelity Bank (Note 22 Series B+) Bahamas First Holdings Limited

CLOSE

CHANGE

%CHANGE

YTD

YTD%

2447.91

-0.10

0.00

219.67

9.86

SYMBOL AML APD BBL BFH BOB BPF BWL CAB CBB CBL CHL CIB CWCB DHS EMAB FAM FBB FCL FIN JSJ BFHP CAB6 CAB9 CHLA FBBA FCLB SYMBOL FBB22 BFHB

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.71 100.53 100.43 100.34 100.23 100.00 100.00 100.98 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.26 100.28 100.43 100.04 100.23 89.62 89.00 90.24 90.73

MUTUAL FUNDS 52WK HI 2.52 4.69 2.22 207.86 212.41 1.73 1.83 1.82 1.05 9.37 11.83 7.54 16.64 12.84 10.77 10.00 10.43 14.89

52WK LOW 2.11 3.30 1.68 164.74 116.70 1.68 1.73 1.75 0.99 6.41 7.62 5.66 8.65 10.54 9.57 9.88 8.45 11.20

Bahamas Note 6.95 (2029) BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-7Y BGRS FX BGR145231 BGRS FL BGRS68023 BGRS FL BGRS70022 BGRS FL BGRS75022 BGRS FL BGRS81037 BGRS FL BGRS88028 BGRS FX BGR129249 BGRS FX BGR131249 BGRS FX BGR132249 BGRS FX BGR136150

BAH29 BG0107 BG0207 BG0130 BG0230 BG0307 BG0330 BG0407 BSBGR1450315 BSBGRS680232 BSBGRS700220 BSBGRS750225 BSBGRS810375 BSBGRS880287 BSBGR1292493 BSBGR1312499 BSBGR1322498 BSBGR1361504

LAST CLOSE 5.35 39.95 2.04 2.31 2.25 6.10 9.75 3.30 7.52 2.81 8.00 16.60 2.83 10.25 12.32 10.85 15.20 3.98 10.00 15.50 1.00 1000.00 1000.00 1.00 10.00 1.00 LAST SALE 100.00 100.00 107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.26 100.53 100.54 100.34 100.23 89.62 100.00 100.00 100.00

CLOSE 5.35 39.95 2.04 2.31 2.25 6.10 9.75 3.30 7.52 2.81 8.00 16.60 2.74 10.25 12.30 10.85 15.20 3.98 10.00 15.50 1.00 1000.00 1000.00 1.00 10.00 1.00

BISX ALL SHARE INDEX - 19 Dec 02 = 1,000.00 52wk-Hi - Highest closing price in last 52 weeks 52wk-Low - Lowest closing price in last 52 weeks Previous Close - Previous day's weighted price for daily volume Today's Close - Current day's weighted price for daily volume Change - Change in closing price from day to day Daily Vol. - Number of total shares traded today DIV $ - Dividends per share paid in the last 12 months P/E - Closing price divided by the last 12 month earnings

VOLUME 100

233

0.00 0.00 0.00 0.00 0.00 0.00

CLOSE 100.00 100.00

CHANGE 0.00 0.00

107.31 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.26 100.53 100.54 100.34 100.23 89.62 100.00 100.00 100.00

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund Leno Financial Conservative Fund Leno Financial Aggressive Fund Leno Financial Balanced Fund Leno Financial Global Bond Fund RF Bahamas Opportunities Fund - Secured Balanced Fund RF Bahamas Opportunities Fund - Targeted Equity Fund RF Bahamas Opportunities Fund - Prime Income Fund RF Bahamas International Investment Fund Limited - Equities Sub Fund RF Bahamas International Investment Fund Limited - High Yield Income Fund RF Bahamas International Investment Fund Limited - Alternative Strategies Fund Colonial Bahamas Fund Class D Colonial Bahamas Fund Class E Colonial Bahamas Fund Class F

MARKET TERMS

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (0.09) 0.00 (0.02) 0.00 0.00 0.00 0.00 0.00

(242) 323‐2330 (242) 323‐2320 EPS$ 0.239 0.932 0.000 0.140 0.070 1.760 0.369 -0.438 0.140 0.184 0.449 0.722 0.102 0.467 0.646 0.728 0.816 0.203 0.939 0.631 0.000 0.000 0.000 0.000 0.000 0.000

VOLUME

DIV$ 0.170 1.260 0.020 0.080 0.000 0.000 0.260 0.000 0.000 0.120 0.220 0.720 0.434 0.060 0.328 0.240 0.540 0.120 0.200 0.610 0.000 0.000 0.000 0.000 0.000 0.000

INTEREST Prime + 1.75% 6.25% 6.95% 4.50% 4.50% 6.25% 6.25% 4.50% 6.25% 4.25% 5.45% 4.62% 4.50% 4.43% 4.87% 4.33% 5.55% 5.60% 5.65% 5.69%

NAV 2.52 4.69 2.21 197.44 202.39 1.73 1.82 1.82 0.99 9.37 11.79 7.54 15.94 12.47 10.74 N/A 10.43 14.89

YTD% 12 MTH% 0.99% 4.22% 0.36% 5.78% 0.67% 2.74% -2.97% -2.35% -4.72% 6.04% 0.83% 2.82% -0.18% 3.72% 0.76% 3.55% -3.55% -3.85% -0.02% 10.36% -0.33% 18.23% 0.22% 3.05% -3.89% 14.76% -1.04% -2.57% 0.81% 4.20% N/A N/A 3.00% 25.60% 7.90% 48.70%

P/E 22.4 42.9 N/M 16.5 N/M N/M 26.4 -7.5 53.7 15.3 17.8 23.0 26.9 21.9 19.0 14.9 18.6 19.6 10.6 24.6 0.000 0.000 0.000 0.000 0.000 0.000

YIELD 3.18% 3.15% 0.98% 3.46% 0.00% 0.00% 2.67% 0.00% 0.00% 4.27% 2.75% 4.34% 15.84% 0.59% 2.67% 2.21% 3.55% 3.02% 2.00% 3.94% 0.00% 0.00% 0.00% 6.25% 7.00% 6.50%

MATURITY 19-Oct-2022 30-Sep-2025 20-Nov-2029 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2022 26-Jun-2045 15-Oct-2022 17-May-2031 21-Jul-2023 29-Jul-2022 7-Sep-2022 26-Jul-2037 26-Jul-2028 15-Apr-2049 15-Jul-2049 15-Oct-2049 21-Apr-2050

NAV Date 31-Mar-2022 31-Mar-2022 25-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Mar-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Jan-2022 31-Mar-2021 31-Mar-2021 31-Mar-2021

YIELD - last 12 month dividends divided by closing price Bid $ - Buying price of Colina and Fidelity Ask $ - Selling price of Colina and fidelity Last Price - Last traded over-the-counter price Weekly Vol. - Trading volume of the prior week EPS $ - A company's reported earnings per share for the last 12 mths NAV - Net Asset Value N/M - Not Meaningful

rising inflation and its impact on businesses and consumers. Investors are also concerned about the Fed’s aggressive plan to raise interest rates to fight inflation and hope the Fed won’t act so aggressively to slow the economy as to cause a recession.

Russia’s invasion of Ukraine in February added even more pressure to already rising energy costs, making inflation worse for both businesses and consumers. Supply chains became even tighter over the last month as China locked down several major cities to fight rising cases of COVID-19.

“The overarching theme, especially for the past few weeks, is that investors are increasingly cautious on growth and the economic outlook,” said Jason Draho, head of asset allocation for the Americas at UBS Global Wealth Management. “It’s one of the big reasons why you’re seeing the inability for the stock market to get any kind of momentum.”

At the May 3-4 meeting, the Fed raised its key interest rate by a halfpercentage point, its most aggressive move since 2000.

It also signaled further large rate hikes to come. To tame inflation, the Fed wants to cool spending and economic growth by making it more expensive for individuals and businesses to borrow.

The minutes revealed that many of the policymakers agreed that after a rapid series of rate increases in the coming months, they could “assess the effects” of their rate hikes and, depending on the economy’s health, adjust their policies.

The economy has showed more signs of showing, and financial markets have dropped sharply, since the Fed meeting.

The S&P 500 gained ground on Monday, but slipped again on Tuesday, dragged down by more losses in the technology sector.

LEGAL NOTICE

NOTICE FEROKEE MANAGEMENT S.A. Company No. 1473560 (In Voluntary Liquidation) NOTICE is hereby given pursuant to Section 204 (1)(b) of the BVI Business Companies Act, 2004 that FEROKEE MANAGEMENT S.A. is in voluntary liquidation. The voluntary liquidation commenced on 20th May 2022 and Querube C. De Nuñez of MMG Tower, Floor 23, Avenida del Pacifico with Avenida Paseo del Mar, Costa del Este, Panama City, Panama, been appointed as the Sole Liquidator.

Dated this 20th day of May 2022 Sgd. Querube C. De Nuñez Voluntary Liquidator

LEGAL NOTICE

NOTICE Hermany Slopes Inc. In Voluntary Liquidation

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, Hermany Slopes Inc. is in dissolution as of May 24, 2022.

International Liquidator Services Ltd. situated at 3rd Floor Whitfield Tower, 4792 Coney Drive, Belize City, Belize is the Liquidator.

LIQUIDATOR ______________________

FIRST LEGAL NOTICE INTERNATIONAL BUSINESS COMPANIES ACT, 2000

TIGER AM VENTURES LTD. Voluntary Liquidation

NOTICE IS HEREBY GIVEN in accordance with Section 138 (4) of the International Business Companies Act, 2000 as follows:a) TIGER AM VENTURES LTD. is in dissolution under the provisions of the International Business Companies Act, 2000. b) The dissolution of the said Company commenced on 11th March 2022 when its Articles of Dissolution were submitted to and registered by the Registrar General. c) The Liquidator of the said Company is Amicorp Bahamas Management Limited whose address is 3rd Floor, Bahamas Financial Centre, Shirley & Charlotte Streets, Nassau, Bahamas.

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | CORALISLE 242-502-7525 | LENO 242-396-3225 | BENCHMARK 242-326-7333

Amicorp Bahamas Management Limited Liquidator

THE TRIBUNE

Thursday, May 26, 2022, PAGE 15

THIS Nov. 13, 2019, aerial photo shows part of an abandoned oil drilling project in the Allegheny National Forest in Pennsylvania.

The U.S. Department of the Interior says 20 wells in that forest are among 277 “high priority” polluting orphan wells that will be cleaned up with $33 million from the bipartisan infrastructure act. The wells are on federal land in Pennsylvania, California, Kentucky, Louisiana, Ohio, Oklahoma, Texas, Utah and West Virginia.

Photo:Andrew Rush/AP

Infrastructure plan: $33M to clean up hundreds of oil wells

By JANET MCCONNAUGHEY Associated Press NEW ORLEANS (AP) — About $33 million of the $1 trillion bipartisan infrastructure plan recently signed into law by President Joe Biden will go toward cleanning up 277 of an estimated 15,000 abandoned oil and gas wells on federal land, the nation’s interior secretary said Wednesday.

“Millions of Americans live within one mile of an abandoned oil or gas well,” Interior Secretary Deb Haaland said, adding during a news conference that the wells pose a danger to people, “particularly in communities of color and rural communities.”

“With tens of thousands of known orphaned wells across the country there is a significant amount of work to be done,” so the program will provide many jobs that pay well, Haaland said.

There are an estimated 15,000 abandoned wells on federal land — and states have indicated that they would need more than $8 billion to clean up 130,000 other orphaned wells, said Laura Daniel-Davis, principal deputy assistant secretary for land and minerals.

Those figures could be low — the Environmental Protection Agency has estimated the national total at 3.2 million.

Daniel-Davis said money to help “nail down” state inventories is included in $1.1 billion announced in January as available to states under the infrastructure law.

“This is the first installment” of $250 million provided through the infrastructure law for cleaning up orphaned wells and well sites on federal public lands, national parks, national wildlife refuges and national forests, Daniel-Davis said. The next will probably be announced

during the fiscal year which starts Oct. 1, she said.

Including wells on federal land, the bill will provide $4.7 billion to clean up orphaned oil and gas wells, said Mitch Landrieu, Biden’s infrastructure coordinator.

“States are now finally counting them,” he said.

Wells covered by Wednesday’s announcement are considered high-priority because pollution threatens human health and safety, the climate and wildlife. Several wells, particularly in Pennsylvania and Louisiana, are “near disadvantaged groups,” Daniel-Davis said.

Some 163 wells are in Louisiana, in five wildlife refuges and the Jean Lafitte National Historic Park and Preserve’s Barataria unit.

Sixty-eight are in the Darbonne National Wildlife Refuge and 59 in the Upper Ouachita National Wildlife Refuge.

There are 24 each in Kentucky, in the Daniel Boone National Forest, and in Oklahoma, in the Deep Fork National Wildlife Refuge. Another 20 are in Texas, 18 in the Allegheny National Forest in Pennsylvania and 14 in Bureau of Land Management lands in Utah. In addition, the government will inventory and assess wells in the Glen Canyon National Recreation Area in Utah.

Ten wells are in California, three in the Cuyahoga Valley National Park in Ohio and one in the Gauley River National Recreation Area in West Virginia.

Contractors will measure methane before and after cleanup, Haaland said.

Louisiana has about 4,600 orphaned wells, defined in state law as those with owners that have either gone out of business or have ignored state clean-up orders, said Patrick Courreges, spokesman for the state Department of Natural Resources.

NOTICE

NOTICE is hereby given that YVES SIMPLICE of Bethel Avenue, Nassau, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 26th day of May, 2022 to the Minister responsible for nationality and Citizenship, P. O. Box N-7147, Nassau, New Providence, The Bahamas.

NOTICE

NOTICE is hereby given that JAMES BRAVE of Carmichael Road, Nassau, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for Registration Naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 26th day of May, 2022 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

THE TRIBUNE

Thursday, May 26, 2022, PAGE 19

Twitter to pay $150M penalty over privacy of users’ data

By MARCY GORDON AP Business Writer WASHINGTON (AP) — Twitter will pay a $150 million penalty and put in new safeguards to settle federal regulators’ allegations that the social platform failed to protect the privacy of users’ data over a six-year span.

The Justice Department and the Federal Trade Commission announced the settlement with Twitter on Wednesday. The regulators allege Twitter violated a 2011 FTC order by deceiving users about how well it maintained and protected the privacy and security of their nonpublic contact information.

From May 2013 to September 2019, Twitter told users that it was collecting their phone numbers and email addresses for purposes of account security.

But it failed to disclose that it also would use the information to enable companies to send targeted online ads to users on the platform, the government alleged.

The regulators also alleged, in a federal lawsuit filed Wednesday, that Twitter falsely claimed that it complied with U.S. privacy agreements with the European Union and Switzerland, which prohibit companies from processing user information in ways that are at odds with purposes authorized by users.

“Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads,” FTC

IN this April 26, 2017, photo is a Twitter app icon on a mobile phone in Philadelphia. Twitter will pay a $150 million penalty and put in new safeguards to settle federal regulators’ allegations that the social platform failed to protect the privacy of users’ data over a six-year span. The Justice Department and the Federal Trade Commission announced the settlement Wednesday, may 25, 2022, with Twitter.

Photo:Matt Rourke/AP Chair Lina Khan said in a statement. “This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue.”

The San Francisco-based company has more than 229 million users around the world. The $150 million penalty and the required new compliance measures under the settlement must be approved by a federal court in California.

The FTC’s 2011 order had alleged serious lapses in Twitter’s data security that allowed hackers to gain unauthorized administrative control of Twitter, including access to nonpublic user information.

“Keeping data secure and respecting privacy is something we take extremely seriously, and

we have cooperated with the FTC every step of the way,” Twitter’s chief privacy officer, Damien Kieran, said in a blog post Wednesday.

He said the company has taken steps in accord with the FTC on updating operations and making other improvements “to ensure that people’s personal data remains secure and their privacy protected.”

Twitter announced in November the formation of a new data governance committee within the company.

Word of the settlement came on the day of Twitter’s annual shareholders meeting. The drama of Tesla billionaire Elon Musk’s proposed $44 billion purchase of Twitter has swirled around the company for weeks.