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THURSDAY, MAY 31, 2018

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VAT’s 60% increase a $400m ‘death wish’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

T

HE government’s 60 percent VAT rate rise was yesterday labelled “a death wish”, amid fears it will plunge The Bahamas into recession by sucking an extra $400m from the economy. Private sector leaders told Tribune Business they were stunned by the decision to increase the VAT rate to 12 percent for the 2018-2019 budget year, and warned that The Bahamas “cannot tax itself to success”. Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, said the government’s revenue-focused fiscal

* New recession fears on rise to 12% * Govt ‘can’t tax itself into success’ * Bahamians pay price for recklessness * Private sector being ‘kicked while down’

ROBERT MYERS consolidation measures were unlikely to succeed unless accompanied by matching “austerity” that reduced public spending. He added that the VAT rate increase, coming just

three years after the tax was first introduced at 7.5 percent, had “whacked economic growth in the knees” just as The Bahamas appeared poised to generate its highest annual GDP expansion for a decade. Mr Myers also warned the Government against “doing stuff in a vacuum”, and questioned whether it had done sufficient economic modelling to determine whether a 12 percent VAT rate rise was the best option for achieving its goals.

“That’s what scares me,” he told Tribune Business. “The negative backlash really scares me with the increased VAT and taking another $400m out of the economy. There is, without a doubt, going to be a negative backlash to that. “You can’t take $400m out of the economy, increase costs to the economy, and not have a GDP backlash. The last thing we need to do is put the country back into

SEE PAGE 4

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Web shops facing taxation ‘wipe out’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SEBAS Bastian yesterday warned web shops face a “wipe out” from tax increases of up to 355 percent, as the sector accused the government of deliberately seeking to “cripple” it. The Island Luck chief confirmed to Tribune Business that he, and other operators, had been blindsided by a 2018-2019 budget that singled out the industry for huge tax hikes. Mr Bastian’s sentiments were echoed by Craig Flowers, head of the rival FML Group of Companies, who warned that operators will likely be forced to make a “business decision” in the face of the government’s new levies - which some may interpret as meaning location closures and job losses

* ‘CRIPPLED’ BY RATE HIKES OF UP TO 355% * FLOWERS WARNS OF TOUGH DECISIONS * GOV’T TARGETS REVENUE DOUBLING TO $70M

SEBAS Bastian and Craig Flowers. among the sector’s estimated 3,000-4,000 employees. The government’s own projections show it expects total gaming taxes to neardouble in the 2018-2019 fiscal year, from $36.5m to $70.039m, as a result

SEE PAGE 5

BICA chief’s concern ‘Insane’ 40% growth in govt’s wage bill * $226m rise in seven years slammed on 30-day VAT ‘hubris’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Bahamas Institute of Chartered Accountants (BICA) president yesterday warned it was “hubris” to believe the private sector can implement the new VAT rate and exemptions within 30 days.

* WARNS RATE, EXEMPTION ADJUSTMENT CHALLENGING * SET TO ‘COMPLICATE A TAX WE WANT TO BE SIMPLE’ * SAYS RATE/REVENUE RISES NOT 1:1 TRANSLATION Gowon Bowe told Tribune Business that the

SEE PAGE 10

Auto dealers: budget reforms are ‘bittersweet’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN new auto dealers described yesterday’s Budget as “bittersweet”, despite it delivering the bonded warehouse and “roadside vendor” crackdown they have been seeking. Fred Albury, the Bahamas

Motor Dealers Association’s (BMDA) president, told Tribune Business that implementing the bonded warehouse facility earlier would have prevented him and other new auto vendors from having to “eat” the duty already paid on vehicles subject to yesterday’s rate cuts.

SEE PAGE 6

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THE 40 percent growth in the government’s wage bill over the past seven fiscal years to 2018-2019 was yesterday branded “insane” and “criminal” by private sector leaders. KP Turnquest, pictured, Deputy Prime Minister, said the $226m increase in civil service salaries since the

* And set to hit $791m in 2020-2021 * DPM pledges end to under-budget ‘sham’ 2011-2012 fiscal year was one factor that had created “a significant fiscal gap” for the upcoming budget year without the corrective action of a Value-Added Tax (VAT) rate increase to 12 percent.

“In light of the fact that the Government wage bill has grown by $226m, or 40 percent, between 2011-2012 and 2018-2019 in an economy that has posted little if

SEE PAGE 7

PAGE 2, Thursday, May 31, 2018

THE TRIBUNE

JUST 20% OF BOB ‘BAD ‘LOANS’ ARE RECOVERABLE

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Government’s capital spending budget took an $80m hit after it was determined that just 20 percent of Bank of the Bahamas’ toxic loans were recoverable. KP Turnquest, unveiling the 2018-2019 budget in the House of Assembly yesterday, said the government had been unable to realise its projected capital expenditure savings after

* Govt capital spend takes $80m hit * Accounting change on BOB write down * Near-$26m of arrears relates to BOB being forced to change the accounting treatment relating to the BISX-listed bank’s bail-out. He explained that the government had initially treated the toxic loans transferred to Bahamas Resolve, the bail-out vehicle, during the first “rescue” in October 2014 as receivables. As

a result, they were considered “investment assets” for accounting purposes. However, “conservative” estimates of Bahamas Resolve’s prospects for collecting on the “bad loans” had resulted in a significant write-down of the $100m in promissory notes (bonds) issued to Bank of the

Bahamas in exchange for the toxic credit. “By treating the toxic loans as receivables, they were considered investment assets and, as such, the payments were not considered an expenditure item,” Mr Turnquest said. “Based on Resolve’s own conservative estimates for recoverability,

it now would be more appropriate to treat only 20 percent of the loans as assets. “As such, $80m of the full payment of $100m has been reclassified as a capital expenditure. Consequently, the outturn for capital expenditure in 2017-2018, at $233m, is largely in line with the budget projection.” Capital spending was initially forecast to come in at $153m. Obligations due to Bank of the Bahamas are also responsible for $25.85m of the $172m in

unfunded arrears payments that the government will now attempt to finance and settle. Of that sum, some $8.805m relates to interest due to Bank of the Bahamas on the promissory notes. Bahamas Resolve is unlikely to be able to finance this itself due to the difficulties in liquidating the toxic loans. The $17m balance relates to “settlement of a contingent liability” related to Bank of the Bahamas.

GOV’T HAILED FOR SHOE,CLOTHING RETAIL WAIVER By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government’s proposed tax relief for clothing and shoe retailers was yesterday hailed for helping to preserve Bahamian businesses and jobs. KP Turnquest, pictured, deputy prime minister, said the government had made provision in the 2018-2019

budget to “waive” import duties for retailers and importers of these products in a bid to improve the sector’s competitiveness against online and foreign rivals. “We are providing for the waiver of duty on clothing and shoe imports upon application by importers and retailers of same,” he said in unveiling the 20182019 budget. “This will be extended to any merchant,

large or small, who has a business license for the sale of clothes or shoes. “We are, at the same time, putting in place procedures to ensure that the savings are passed on to consumers. This will be a benefit to all Bahamians, but particularly to those who do not have the means to travel abroad to shop for their clothes like others are sometimes able to do.”

Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, said: “It’s important that the clothing and apparel sector keeps the jobs in The Bahamas as opposed to Florida and online. “It’s sensible. Why do we want to support foreign retailers when we should be supporting and growing our own? It’s a sensible move. I’m happy to see that for their sakes.” He was backed by Fred Albury, the Bahamas Motor Dealers Association’s (BMDA) president, who said: “I’m glad to see they’re trying to breathe a bit of life into the clothing and garment industry.”

‘CAR DUTY REDUCTION SHOWS COMMITTMENT’ By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net A BAHAMIAN electric car dealer said yesterday the Minnis administration’s plan to reduce the import duty for electric vehicles from 25 percent to ten percent demonstrates a “serious commitment” to improving the environment, adding that it could incentivise Bahamians to turn to electric vehicles. Pia Farmer, a director at Easy ECO Car Sales, told Tribune Business yesterday: “I am naturally very pleased that the Bahamas Government is encouraging cleaner, cheaper and more efficient transportation by reducing the import duty for electric vehicles from 25 percent to ten percent, and also for their replacement batteries from 40 percent to ten percent. This

shows a serious commitment to improving our environment by reducing harmful emissions, noise pollution, and ensuring more efficient use of resources. Data shows that EVs are almost four times more efficient in the use of fuel than conventional combustion engine vehicles.” Deputy Prime Minister and Minister for Finance K Peter Turnquest said yesterday during the budget presentation: “In respect to vehicles, the express policy intent is to expand and enhance the noteworthy policy objective of the former administration to encourage the import and sale of more fuel efficient cars and trucks. Through this policy that we are today expanding, the country has seen a rise in the import and use of electric and hybrid vehicles and a build-up of the support systems for same. This administration wishes to continue to encourage a transition to same.” He pointed out that government is restricting the landed price ceiling to $50,000 for hybrids and electrical vehicles to avoid persons bringing in luxury hybrid vehicles at the reduced duty level. “Our policy rationale is that if you can afford a luxury vehicle, you can pay

the standard vehicle excise duty rate. “We are also making brand new small vehicles much more affordable with the duty rate on those vehicles being set at 25 percent. In addition to the fuel efficiency of smaller vehicles generally speaking – which can reach efficiency levels of some hybrids - these vehicles are much better suited to small islands or congested cities.” Mrs Farmer told Tribune Business: “Electric vehicles are solar-ready, so by charging from solar power at home or at work, we can help to reduce our reliance on fossil fuels and help us to achieve our national energy goals. Most importantly, this incentive of lower duty rates can empower Bahamians to join the worldwide evolution in transportation to electric, and drastically reduce the amount of money spent on gasoline and maintaining combustion engines. The Bahamas Government was already committed to EVs with a growing fleet of 100 percent electric cars used by several ministries. Our government has already understood the benefits, and I’m very happy that the public will now also be empowered to share in the financial benefits while reducing their carbon footprint.”

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THE TRIBUNE

Thursday, May 31, 2018, PAGE 3

CHAMBER BLINDSIDED BY 12% VAT PROPOSAL By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE Chamber of Commerce plans to discuss the 2018-2019 budget with the government today after being blindsided by its proposed 60 percent VAT rate increase. Edison Sumner, the Chamber’s chief executive, told Tribune Business that it had been taken by surprise by both the increase and its size, having expected that any move would have been to a ten percent rate. “We expected that if there would have been an increase it would have been to around ten percent,” he

EDISON SUMNER

said. “We certainly did not expect 12 percent as a new rate for VAT. It will have an impact on the business community. We have been getting a lot of calls from people in the business community who are equally surprised by the move. “We’re hoping to meet with the Minister of Finance as early as tomorrow [today] to discuss the budget. We need to understand the rationale for this increase. We are having a review of the budget. The Chamber has taken it in hand, and will be giving it a thorough review to make an assessment of it and deliver some comments back to the government.”

Michael Maura, the Chamber’s chairman, told Tribune Business that his telephone had been “ringing off the hook” with calls from concerned businesses, as the VAT rate increase dominated private sector reaction to the budget. Mr Sumner said the Chamber had not known about the government’s VAT plans in advance of the budget, despite discussing various aspects of the government’s fiscal plans with the Minister of Finance prior to yesterday’s discussions. “I would say to the business sector not to panic,” he told Tribune Business. “It’s come across only as

a communication, and has not passed Parliament yet. It is the Minister of Finance’s projection of what he would like to see, and now has to go through the process. “It gives the Chamber the opportunity to have discussions between now and then. We’ll certainly make some recommendations based on what was presented to Parliament. We’ll be engaging the government and reporting back as soon as we have this meeting. “We’ve been getting a lot of calls, and our response to the business sector has been that we will raise the matter with the

government, have reached out to them and will meet with them to discuss the matter.” Mr Sumner said the tax reform discussion went “well beyond VAT”, involving debate on whether a corporate tax should be introduced, the type of adjustments that should be made to the business licence, Customs duties and payroll taxes. He added that the Chamber was a member of the Tax Review Steering Committee formed by the government to help review The Bahamas’ entire tax structure.

COOPER: ‘BUDGET OF PAIN AND NO GAIN’ By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net THE Official Opposition yesterday slammed the Minnis administration for its “budget of pain and no gain”, arguing that the current 7.5 percent ValueAdded Tax (VAT) rate would have been “adequate for years to come”. Chester Cooper, the Exuma and Ragged Island MP and Opposition Finance spokesman, responding to the 2018/2019 budget communication, said: “This is a budget of pain and no gain. This is a treacherous, reckless and dangerous move on the part of the government. We do not put faith in their fiscal deficit recovery strategy and little faith in their deficit recovery numbers. It appears to be purely crude accounting. One hurricane we believe can come along and blow a hole in their strategy. It is simply pie in the sky.” Deputy Prime Minister and Minister for Finance K Peter Turnquest announced during the budget presentation that government is proposing an increase in the rate of Value Added Tax from the current 7.5 percent to 12 percent effective July 1, stating that government could no longer “kick the can down the road” with regards to the country’s fiscal deficit. Progressive Liberal Party (PLP) leader Philip Davis questioned what has happened in the past year that has caused the Minnis administration to jump from 7.5 to 12 percent VAT.

Mr Cooper stated: “The PLP does not support any increase in taxes in this budget exercise and we will vote against them.” Mr Cooper argued that the government’s VAT exemptions would only make VAT collections more complex and potentially affect revenue beyond what the government expects it will miss out on through granting those exemptions. “It’s clear to me they don’t understand how VAT works. This is no people budget. This is betrayal of the trust imposed in them by the people,” said Mr Cooper. While acknowledging that the former Christie administration’s VAT white paper had proposed a 15 percent rate which was later reduced to 7.5 before it was introduced, Mr Davis argued: “There’s a big difference. What you would have heard about a 15 percent initial VAT exacting of tax was as a result of recommendations being made to us by international agencies. We took onboard their recommendations to considered them. Following consideration and widespread consultation with the business

community and stakeholders we thought and we came to the accommodation that 7.5 percent would have been adequate for quite a number of years.” Mr Cooper further argued: “What was different then was that the government consulted widely and they listened to the various consultants and it was determined that the 7.5 percent with no exemptions was the best methodology. They listened to the consultants, the business community ad consulted widely. Bahamians are being saddled with whopping 67 percent increase. What you saw today was political gimmickry at its best.” He continued: “VAT is being removed from say 22 breadbasket items and being increased on every other item that’s bought by the Bahamian people. I don’t think the Bahamian people will take it sitting down. This is an outrageous display of backtracking on an election promise and an attempt to smooth it over by listing a whole host of exemptions that will amount to less than what the cost increases is going to be as a result of increase in VAT.”

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THE TRIBUNE

VAT’s 60% increase a $400m ‘death wish’ FROM PAGE ONE recession. There’s no doubt that it’s going to slow economic growth and create an inflationary aspect. That’s going to have a negative effect on GDP, disposable income and poverty levels as well.” Mr Myers warned that

“increasing taxes taxes without fiscal austerity is just a death wish”, adding that the government and Bahamians had “to stop fooling themselves” about the need for spending cuts. “You can’t tax yourself into success,” he told Tribune Business. “Many governments have tried and all have failed. The rising ride that

floats all boats is economic growth, and you’ve just whacked that in the knees. I don’t understand how they think they’re going to tax themselves into success.” Given that VAT is a tax paid by the end-consumer, the budget rise threatens to reduce disposable incomes and living standards, thereby further squeezing the middle

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and lower income classes. This, in turn, threatens to reduce the projected 2.5 percent GDP growth for 2018 upon which the Government is relying to drive its revenues. But KP Turnquest, deputy prime minister and minister of finance, argued that the government had little choice but to seek a major revenue hike as he revealed that the fiscal equivalent of “Judgment Day” had arrived. Pledging that “the era of fiscal irresponsibility has come to an end”, and that the government can no longer “kick the can down the road”, Mr Turnquest portrayed the VAT increase as unavoidable if it is to achieve both the Fiscal Responsibility Bill’s consolidation targets and pay off some $360m in presently unfunded public spending commitments. “Moving to significantly enhance the revenue yield of our tax system was not done capriciously but, rather, out of a deep sense of responsibility for righting the ship of state and restoring the fiscal health of the people’s government. This day of fiscal reckoning inevitably had to come,” he told the House of Assembly yesterday. The Minnis administration’s message is that Bahamian people will now pay a high price for the sins of past governments, and their reckless spending and borrowing habits. Its projection of a $400m revenue increase from the VAT rate rise is central to a projected $629m, or 31.1 percent, revenue rise for the 2018-2019 fiscal year. The budget communication was relatively silent on spending measures, with Mr Turnquest stating that “close to one-half of the budget heads have been allocated either virtually the same or even smaller” sums than in the 2017-2018 fiscal year. However, the budget

data shows a $489m or 23.3 percent rise in total recurrent (fixed cost) spending to $2.589 bn - showing that the size of government continues to increase. Mr Turnquest blamed the 2018-2019 rise on the need to pay off some $172m, or nearly half, the government’s unfunded spending commitments. Interest payments to service the government’s debt are set to increase to $108m year-over-year, while a further $76m is needed to fill “the hole” created by persistent under-budgeting for line items known to cost considerably more. Michael Maura, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business yesterday that he was “shocked and disappointed” by the VAT rate increase to 12 percent. Mr Maura, who had issued an 11th hour plea for the Minnis administration to hold-off on any new and/ or increased taxes, likened yesterday’s hike to the Government “kicking the private sector while we’re down”. He added that the private sector was now effectively being asked to drive economic growth and job creation “with one arm behind our back”, and expressed concern that the VAT increase will lead to “a contraction in the market”. The Chamber chair, who had previously warned that tax increases would undermine still-fragile business and consumer confidence, said a 1-1.5 percentage point VAT rate rise “would have been a bit easier” to process in the absence of any consultation with the government. He acknowledged that “nobody would have been happy” with any increase, and said: “I think the word is shocked and disappointed... Obviously the government feels our fiscal circumstance

MICHAEL MAURA is extremely dire, and this is why they had to introduce a 60 percent increase in the VAT rate. “In our situation, I believe we will see a contraction in the market when there’s already so much uncertainty around WTO, businesses wondering if they will continue to invest in their business, manufacturers wondering if their tariffs will come down. We have oil prices on the rise, and the financial services sector under assault from the EU ‘blacklist’ and other international processes, and then we have a 60 percent increase on the VAT rate.” The proposed increase revived memory of the slowdown produced by VAT’s initial introduction in 2015, and Mr Maura expressed concern over the narrow 30-day window for businesses and consumers to adjust to the 12 percent rate. “You have businesses in the construction sector where bids have been issued,” the Chamber chief said. “People make business decisions around the total cost of a project, and only have a 30-day opportunity to contemplate this. Thirty days does not provide an opportunity to contemplate. Thirty days is open up and swallow. It didn’t have to be like this. “There’s going to be unintended consequences. I appreciate the fact the budget speaks to fiscal reform, and speaks to placing The Bahamas on an appropriate footing and stable ground, but the way and

SEE PAGE 6

THE TRIBUNE

Thursday, May 31, 2018, PAGE 5

Web shops facing taxation ‘wipe out’ FROM PAGE ONE

of completely overhauling the domestic gaming industry’s tax structure. And, in a nasty twist as far as web shop operators are concerned, the government has also imposed new taxation on gamblers themselves rather than the sector. Patrons, from July 1, will have to pay a five percent stamp tax on both their web shop deposits and non-online games/digital sales. This comes on top of a new “sliding scale” tax structure for the revenue earned by the operators themselves, with the rate increases ranging from low of 81 percent to a high of 355 percent compared to what the sector currently pays. The proposed rates are: • Up to $20 million in revenue, a rate of 20 percent. • Between $20m and $40m, a rate of 25 percent. • Between $40m and $60m, a rate of 30 percent. • Between $60m and $80m, a rate of 35 percent. • Between $80m and $100m, a rate of 40 percent. • Over $100m, a rate of 50 percent. This compares to the present tax structure, which requires web shop operators to pay 11 percent on taxable revenue or 25 percent of EBITDA (earnings before interest, taxation, depreciation or amortisation), whichever is greater. Mr Flowers told Tribune Business: “I think we all were expecting something to come from the new administration. It’s no surprise to the industry operators. The only surprise is probably the size or the magnitude. “I don’t think the Minister [Dionisio D’Aguilar] ever shied away from making it

absolutely clear that this industry would be revised by the present government. governments have the economy to guide the country in the direction they feel more comfortable with. A lot of times we may or may not like the decisions, but that’s what we elected them to do.” Mr Flowers said he had not been fully informed on the tax structure, but added: “I know my company would fall in the high bracket, and whatever those numbers are a decision would have to be made by us whether we would be prepared to pump in the reserves to sustain the operation. We will do our due diligence and come up with a decision. “There’s nothing wrong with saying you have made a decision that you feel is in your best interest to close your business and move on,. as long as you pay your debts to your customers. Our company, FML, doesn’t have anything to be ashamed of. If that’s what it is, that’s what it is. “If you don’t have the resources to deal with the clash flow reduction as these things are rolled out, along with paying employees as well as others taxes and bills separate apart from this tax, then you have to make a business decision. Is government fair to roll all of industry’s taxes into one?” The Bahamas Gaming House Operators Association, which represents the sector, yesterday said the magnitude of the proposed tax increases suggested the government was trying to deliberately disable the industry. Describing itself as “stunned and appalled” by the budget’s contents, the Association said in a statement: “It represents a very unfortunate day in the Commonwealth of The

Bahamas to see a government blatantly discriminate against one industry versus another. “It is equally unfortunate to fathom the level of increase in taxes levied on the industry, and now its patrons, which could only be aimed at crippling the domestic gaming industry.” It suggested the industry was being “singled out”, and added: “This is hardly what you would expect in a free-market economy where persons are now being targeted because they run an efficient and profitable business... “We do not see the government taking aim at the liquor or construction industries. We don’t see them targeting the commercial banks, food stores or port operators. So why is it that the gaming sector should see such a drastic increase in taxes? “We would have thought that, in 2018, we would have been beyond this kind of economic oppression, but it appears that we still have a long way to go.” Governments worldwide, though, frequently target activities such as gaming, and products such as alcohol and cigarettes, with heavy taxation. This is due to both their addictive nature, with persons prepared to pay no matter how prices go, and the desire to levy so-called “sin taxes” on industries seen as having a potential negative social impact. The UK government, for instance, concerned about the proliferation of gaming houses and betting shops there, has launched a review of the sector’s regulatory framework. It is especially concerned about fixed odds betting terminals (FOBT), which are seen as contributing to gambling addiction problems because of the high frequency with which bets are made.

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Provides financial and business input, guidance and advice to senior business leaders Defines Content Product & Road Map to address all business needs and use cases Document the Use Cases and Functional Specifications from project business requirements Act as the business partner to the local operations and commercial teams by providing insight and financial perspective • Collaborate with cross-functional teams such as product, engineering, operations, marketing, finance, and sales teams to unlock new opportunities for growth • Ability to develop business requirements, understand impacts and identify potential issues across various stakeholders • Participates or leads ad hoc projects including data analysis and process improvements.

Qualifications/Experience • Bachelor Degree in Business, IT or management disciplines, MBA preferred. • Two years’ experience in an operational environment within a banking / insurance / financial services organization. • Must be willing and able to commit to regular travel • Strong analytical and product management skills, including a thorough understanding of how to interpret customer business needs and translate them into application and operational requirements. • Very strong soft skills – leadership – communication – facilitation • Business case development • Ability to Model techniques and methods • Time management skills with proven experience in working with tight project deadlines. • Ability to utilize quantitative and qualitative data to interpret reports • High level of proficiency with Microsoft Office • Banking Knowledge a MUST PLEASE SUBMIT BEFORE June 8th, 2018 to:

HUMAN RESOURCES Re: Business Analyst 51 Frederick Street P.O. Box N-4853 | Nassau | F: 328.1108 careers@fidelitybahamas.com

ABSOLUTELY NO PHONE CALLS

A competitive compensation package will be commensurate with relevant experience and qualification. Fidelity appreciates your interest, however, only those applicants short listed will be contacted.

PAGE 6, Thursday, May 31, 2018

VAT’s 60% increase a $400m ‘death wish’

FROM PAGE FOUR degree to which it is being implemented is going to have unintended consequences. Those consequences are not good for business. “With these other factors we’re being influenced by, I hope we don’t find business slowing down on hiring and

THE TRIBUNE pulling back on investment, but it is very possible we will see that.” Mr Maura said the strong US economy, and 2018 first half tourism rebound, were factors in the Bahamas’ favour. The Government appears to be hoping that such external forces will offset the domestic impact of VAT, and ensure GDP

growth projections of 2.5 per cent and 2.2 per cent for 2018 and 2019, respectively, are met. But, with reduced consumer spending likely to be one consequence of the VAT increase, the Chamber chief said: “That will manifest itself in smaller grocery carts and smaller baskets of goods. There will be fewer

meals in restaurants and probably fewer trips to the doctor. Pointing out the private sector and consumer are now being urged to “feel more pain”, Mr Maura told Tribune Business: “We’re the ones expected to grow the economy and create jobs, and are being told we now have to do it with an

arm tied behind our back. “Government should be incentivising us, establishing opportunities. Increasing VAT by 60 per cent at a time when it’s still very difficult and expensive to do business in the Bahamas, they’re kicking us while we’re down. That’s what it feels like, notwithstanding our fiscal issues.”

Auto dealers: budget reforms are ‘bittersweet’ FROM PAGE ONE And while both he and Ben Albury, Bahamas Bus and Truck’s general manager, welcomed the government’s efforts to ensure all industry players competed on a “level playing field”, they questioned whether it will be able to enforce the requirement that individuals importing more than two cars every 12 months obtain a valid Business Licence. The duo spoke out after KP Turnquest, Deputy Prime Minister, unveiled numerous initiatives designed to stimulate the auto industry and better regulate roadside vendors long perceived by established dealers as enjoying an unfair competitive advantage because of the minimal taxes they pay. Mr Turnquest pledged that the bonded warehouse will be set-up during the 2018-2019 fiscal year to provide auto dealers with “a tremendous cash flow advantage”. Under this system, dealers will be able to keep imported vehicles “in quarantine” until they are sold, and only pay due Excise Taxes and VAT when this occurs. This will relieve auto dealers from the burden of having significant sums tied up in taxes for years until a vehicle is sold. The government is also reducing the Excise Tax on new vehicles, with engine capacity of 1,500 CC or less, from 65 percent to 25 percent - a move likely to cover a significant percentage of many BMDA’ members inventory. Mr Turnquest said the

government’s tax policy moves were designed to encourage the importation of smaller, more fuel efficient and environmentally-friendly vehicles, while also making new cars more affordable for Bahamians. However, both Alburys expressed regret that the bonded warehouse facility was not introduced in time for the 2018-2019 budget. Fred Albury said it had been offered to the industry under the previous government, and the idea was picked up following the Minnis administration’s election. “They were a bit hesitant and we explained our scenario to them,” he told Tribune Business. “That scenario has come to fruition. There is a reduction in excise tax on a certain segment of the market, and we have to eat the import tax on existing inventory. “Had we had the bonded warehouse facility, that would not have happened. I’m going to take a hefty loss on vehicles like my Yaris’s, Suzukis and so forth. Consumers are going to expect a certain price level. It’s a shame they couldn’t do an offset against the business licence, but it is what it is. We have to take the bad with the good, and look further down the road.” The BMDA chief’s sentiments were echoed by Ben Albury, who said: “We pleaded with them [the government]. Please don’t make any changes by getting up in the House of Assembly and make this statement, and 30 days later it takes effect. “Most of the dealers have

SEE PAGE 11

THE TRIBUNE

Thursday, May 31, 2018, PAGE 7

‘Insane’ 40% growth in govt’s wage bill FROM PAGE ONE any real growth, [there is] the necessity of exercising restraint in respect of the overall wage bill and headcount,” Mr Turnquest told the House of Assembly yesterday. Budget figures show the Government attempting to hold public sector wages, described as “personal emoluments”, relatively flat year-over-year at $738.476m for 2018-2019 - a slight decline on the prior year’s $741.759m. However, this still represents 28 percent of the government’s total recurrent spending for the next fiscal year. And the salary bill is expected to grow further over the next two years, rising to $757.478m in 2019-2020 and $790.941m in 2020-2021. Mr Tunquest’s revelations were seized on private sector leaders as illustrating just why Bahamian consumers and businesses are being forced to pay for the fiscal profligacy of past governments through a major increase in the VAT rate. “That’s just insane,” Michael Maura, the Bahamas Chamber of Commerce’s chairman, said of the wage bill’s explosive growth since the last year of the final Ingraham administration. Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, added: “That’s just criminal and asinine. It’s criminal. We’ve already paid the price, and are going to continue to pay the price. We’ve got to roll up our sleeves, do the hard work and get this thing going in the right direction.” While the government is targeting $80m in extra “above run rate” revenues for 2018-2019, via a combination of Customs duty, excise tax and real property taxes generated from an enforcement crackdown, Mr Turnquest said compliance efforts would not bear fruit quickly enough

to meet the government’s immediate needs. While the ten percent “across the board” reduction in spending had brought the government’s wage bill, and goods and services spending, in some $120m or 10.3 percent below budgeted amounts for 2017-2018, Mr Turnquest said revenue performance remained weak and was set to come in $130m below forecast. “Given the rebound in real growth, such lacklustre performance of revenue is definitely a matter of pressing concern and speaks to the mandate given to the Ministry of Finance and its Revenue Enhancement Unit to address the areas of revenue under-performance so as to exceed the status quo run rate in the upcoming fiscal year,” the deputy prime minister said. He also pledged to end what he described as “the sham” where governments deliberately under-budgeted for certain budget items despite knowing they will cost more, resulting in the build-up of unfunded arrears that were simply “kicked down the road” for future administrations to pick up. Mr Turnquest said, for example, that this had left the government unable to pay school lunch vendors. He added that the 20172018 fiscal deficit is now projected to come in at $310m, a slight improvement on the $323m forecast in the budget. As a percentage of GDP, Mr Turnquest said this amounted to 2.5 percent compared to the 5.5 percent incurred in 20162017 - a reduction of $351m in dollar terms. Mr Turnquest’s budget address effectively amounted to a “bait and switch”, as he softened Bahamians up with a package of tax breaks before delivering the “sucker punch” of the VAT rate increase to 12 percent. He also sought to soften that blow by promising to reduce Customs duties

and excise taxes by $100m when a balanced budget is achieved within the next three years, as the government moves to hit the Fiscal Responsibility Bill target of a 0.5 percent fiscal deficit for 2020-2021. “The GFS deficit in 2018-2019 is therefore projected at $237m, some $73m lower than in 2017-2018,” Mr Turnquest said. “At 1.8 percent of GDP, the deficit will come in at the target that will be mandated in the fiscal responsibility legislation. “With the decline in the size of the deficit and the ongoing growth of nominal GDP, the debt-to-GDP ratio is projected to fall to 56.1 percent in 2018-2019, down from 57.2 percent in 2017-2018.” Looking further ahead, Mr Turnquest added: “On the basis of these planning assumptions, the GFS deficit in 2019-2020 is projected at $85m, or 0.6 percent of GDP. In 2020-2021, a GFS surplus of some $10m is forecast. As such, we will readily achieve the deficit targets for those two years. “In addition, the debtto-GDP ratio will decline steadily over the forecast period, to stand at 52.1 percent at the end of 2020-2021.”

To advertise in The Tribune, contact 502-2394

Doctors Hospital

Notice

TO SHAREHOLDERS OF DOCTORS HOSPITAL HEALTH SYSTEM REGARDING DIVIDEND DECLARATION

Whereas there are sufficient funds to provide a cash dividend to the shareholders of Doctors Hospital Health System, and Whereas the Directors have determined that after the payment of such dividends the Company will be able to meet all of its continuing obligations and provide adequate oblig funds for reinvestment in the business, Notice is hereby given that the Board of Directors has declared a dividend of $0.04 per share to be paid to shareholders of record on June 8th, 2018. The payment date shall be June 15th, 2018.

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w w w.doc torshosp.com I (242) 302-4600

PAGE 10, Thursday, May 31, 2018

THE TRIBUNE

BICA chief’s concern on 30-day VAT ‘hubris’ FROM PAGE ONE

proposed 60 percent increase in the VAT rate to 12 percent, which the Government wants implemented on July 1, should “have been done in a very structured manner” involving feedback with all 6,000-plus registrants. He warned that the move raised major compliance concerns, with the introduction of VAT “exemptions” on socalled “breadbasket” food items, medicines and other items set to only “complicate a system that we want to keep as simple as possible”. The Government, through the rate increase and exemptions unveiled with the 2018-2019 budget, is thus abandoning the principal of a low-rate, broad-based VAT that resulted in The Bahamas’ tax being branded the “most efficient” in the region by the Inter-American Development Bank (IDB). KP Turnquest, deputy prime minister, said the government was targeting a $400m revenue increase from the 4.5 percentage point rise in the VAT rate. Budget documents show a projected increase in gross VAT revenues from the $663.562m forecast in 2017-2018 to $1.062bn in the upcoming 2018-2019 fiscal year. This translates into a 60 percent revenue increase, matching the magnitude of the rate rise. Mr Bowe, though, expressed scepticism about whether one would translate directly into the other given that the new VAT rate was likely to produce a further downward adjustment in Bahamian consumer spending. “My initial reaction is that it certainly isn’t the manner in which I would have expected the government to lay out that type of increase for several reasons,” he told Tribune Business. While VAT was relatively well implemented in 2015, the BICA president said merchants will have to adjust both their IT software systems and processes to accommodate the new rate, as well as re-price potentially thousands of products on shelves or held in inventory. Given the scale of this task, Mr Bowe said: “The idea that it can be done in a month is hubris on the part of government. It’s a bit optimistic to think it’s easily done. This one is certain;y one that should have been done in a very structured manner. “The consequence of that is going to be compliance. If you’re going to waive [VAT] compliance, and appreciate people will have difficulty complying with it [the July 1 deadline], it’s very difficult to get it back. It’s a dangerous and slippery slope because you haven’t socialised with the persons you are relying upon. Compliance to me would be the greatest concern, doing it in a rushed manner.” Mr Bowe said VAT registrants were given several months lead-in to ready their systems and pricing when VAT was first introduced in 2015, but he - like all others in the private sector - was taken unaware by the government’s proposed rate change within 30 days. He added that the successful 2015 implementation was achieved through business community buy-in and support, which was now absent because of the lack of warning and consultation. “The wisdom from the consultants and business community was that if you want the support of the

business community, be collaborative,” Mr Bowe recalled. “Don’t take a bludgeoning approach to implementation without having it property vetted.” The Bahamas ultimately settled on a low-rate, broadbased VAT with minimum exemptions, but the 20182019 budget abandons this model in favour of seemingly trying to relieve the tax burden on lower income Bahamians. “Exemptions just really complicate a system that we want to keep as simple as possible,” Mr Bowe told Tribune Business. “What has not been taken into consideration is the impact this will have on the Department of Inland Revenue, the process of compliance and the impact it will have on the general community, taking what was a very simple approach and complicating it. “The benefit was a simple approach of having VAT charged across the board. While governments have responsibility for making decisions in the best interests of the people, this type of change should have been accompanied by empirical analysis showing this is a positive change.” Mr Bowe, in particular, decried the seeming absence of an analysis of VAT elasticity, and evidence that the increase to 12 percent will generate the desired revenues. “It’s a bit asinine to believe revenues increase by the amount of the rate increase,” he added, “because people will adjust their spending habits.” The International Monetary Fund (IMF) had previously warned the government against increasing the level of VAT exemptions, having described The Bahamas as having the “most productive” and efficient VAT in the Caribbean - and one that is also better-performing than the average for OECD, European and Asian countries. The Fund said The Bahamas’ performance stemmed directly from its “low-rate, broad-based” model that contained few exemptions, with this nation’s VAT structure held up as something for the rest of the Caribbean to emulate. Industries whose products are treated as VAT “exempt” are unable to recover the 7.5 percent levy paid on their “input” (factors of production) costs, since they cannot charge the tax to their consumers. As a result, “exempt” businesses are left to “absorb” the VAT, increasing their costs, which are inevitably passed on to consumers in the form of higher prices. Mr Bowe said that while he supported the government’s desire to be fiscally responsible, and be able to pay its bills, the nudget had for him recalled an old Winston Churchill quotation: “Taxing yourself out of pocket is like standing in a bucket and trying to hold yourself up.” Suggesting that the VAT reforms were akin to implementing the tax all over again, Mr Bowe urged the Government to prepare itself for “a tremendous debate season” over the next few months. He revealed that the phones and chat groups among fellow passengers on his flight from Freeport were “buzzing” as a result of the budget announced yesterday.

THE TRIBUNE

Thursday, May 31, 2018, PAGE 11

Michael Jackson’s estate sues Auto dealers: budget reforms are ‘bittersweet’ Disney, ABC over TV special FROM PAGE SIX

LOS ANGELES Associated Press THE estate of Michael Jackson sued ABC and parent company Disney on yesterday, saying a two-hour documentary on the singer’s last days improperly used the King of Pop’s songs, music videos and movies. The lawsuit filed in federal court in Los Angeles alleges that last week’s special, “The Last Days of Michael Jackson”, illegally uses significant excerpts of his most valuable songs, including “Billie Jean” and “Bad”, and music videos, including “Thriller” and “Black or White”. It also says ABC used clips from the estate’s 2016 Spike Lee-directed documentary, “Michael Jackson’s Journey from Motown to Off the Wall”, and from the 2009 feature film “Michael Jackson’s This is It”. The lawsuit alleges at least 30 violations and seeks unspecified damages and an injunction against further use of the estate’s intellectual property. It frequently cites Disney’s aggressive defense of its own copyrights and

its normally narrow view of “fair use”, the doctrine in copyright law that says short excerpts can be used for news, criticism and research. “Like Disney, the lifeblood of the estate’s business is its intellectual property,” the lawsuit says. “Yet for some reason, Disney decided it could just use the estate’s most valuable intellectual property for free.” Representatives from ABC said they had not yet

reviewed the lawsuit but reiterated a statement from last week that the special was a piece of journalism and “did not infringe on his estate’s rights”. As a work of news, the special would be entitled to fair use of excerpts of Jackson’s work, but the lawsuit dismisses the idea that the documentary had any news value, calling it “a mediocre look back at Michael Jackson’s life and entertainment career”.

vehicles in stock that were imported at 65 percent, and now it’s at 25 percent.” The Bahamas Bus and Truck executive suggested that the duty reduction should be delayed until January to give dealers time to offload existing inventory. On the enforcement front, Mr Turnquest said: “The Business License Act is being amended to require persons importing more than two cars per 12-month period to have a valid Business License, as well as to control the unauthorised roadside vending of vehicles. “To be absolutely clear,

the government wants to continue to encourage all current and future Bahamian entrepreneurs to bring in and sell vehicles if they so wish. However, we are asking and expecting that if you are in the car import and sales business that you get a Business License and join the sector formally. This protects your prospective customers and permits the government to have a full accounting of the sector.” Ben Albury described the move as “fantastic if they can track it and police it, and go ahead to make sure people don’t get around it by importing two in their name, two in their wife’s name and two in their

aunt’s name”. He added: “I’m happy for people to sell cars, but they should do on the same schedule of taxes and fees as I do when operating this business. We welcome the competition. It just needs to be done in a fair manner.” Fred Albury concurred, adding: “The playing field has to be level out there. You cannot expect me to employ 100 people, pay all kinds of taxes and the guy brings in 30 cars a year by the side of the road, pays minimal taxes and gets away scot free. “It’s a bittersweet budget, but we have to pay our bills, and hopefully this business licence tax changes into something more suitable.”

NOTICE Mr. Ramakrishna Vyakaranam, please be advised that you have until May 31st, 2018 to remove any and all personal belongings from the apartment. After that they will be disposed of.

FamGuard Corporation Limited (Incorporated under the laws of the Commonwealth of The Bahamas) Consolidated Statement of Financial Position As at 31 December 2017 (Expressed in Bahamian dollars)

2017 $ 16,881,642 17,639,018

2016 $ 16,145,293 19,852,029

13,141,670 14,661,520 176,196,403 80,030,193

13,065,957 13,912,881 164,603,183 77,575,014

Total financial investment assets

284,029,786

269,157,035

Reinsurance assets (Note 10) Intangible assets (Note 9) Property, plant and equipment, net (Note 8) Total Assets

6,520,948 100,000 36,803,313

7,979,721 378,333 33,745,316

361,974,707

347,257,727

LIABILITIES Policy Liabilities Reserves for future policyholders' benefits (Note 10) Other policyholders' funds (Note 11)

207,261,508 18,072,481

201,292,443 17,638,441

225,333,989 12,983,280

218,930,884 14,462,724

238,317,269

233,393,608

10,000,000 2,000,000 10,801,080 14,238,268 48,037,032

10,000,000 2,000,000 10,801,080 16,572,792 40,070,095

85,076,380 38,581,058

79,443,967 34,420,152

123,657,438

113,864,119

361,974,707

347,257,727

ASSETS Cash on hand and at banks Receivables and other assets, net (Notes 7 and 22) Financial investment assets (Note 6) Fair value through profit or loss Available-for-sale Held-to-maturity Loans

Payables and accruals (Notes 12, 22, and 23) Total liabilities EQUITY Preference shares (Note 15) Ordinary shares (Note 15) Share premium (Note 15) Revaluation reserve (Note 14) Retained earnings Equity attributable to owners of the Parent Non-controlling interests (Note 27) Total equity Total liabilities and equity

These financial statements were approved by the Board of Directors on May 25 2018, and are signed on its behalf by:

Director

Director

The accompanying notes are an integral part of these consolidated financial statements.

TUG SERVICES LIMITED

Job Opportunity:

Maritime Chief Engineer Duties: Improve performance and efficiency of engine room work team. To ensure smooth communication between inter- department. Arranging preparing and recording of machinery survey. Ensure proper operation of safety equipment’s and its certificate still valid. Planning maintenance check list to ensure machinery are properly maintained and reduced the risk of sudden break down of plant operation. Check list should record machinery description, date of service, part changed and remarks etc. Ensure proper entry of engine room log book and oil record book. To ensure sufficient stock are reserved (bunker, fuel oil, diesel oil, main engine lube oil, cylinder oil, other lube oils and chemicals) in case of any unpredictable situations (e.g. heavy sea, storm, engine breakdown at sea, delay of voyage, unavailable of port bunker service etc.) Writing of report to company e.g. voyage report, monthly main engine performance report and ad hoe report. Requirements; High School Diploma 2 years as engineer of a similar vessel 3 years as a deckhand on a similar sized vessel. Current First Aid and CPR cards. Clean vessel safety record. Familiarity with pollution abatement procedures. Familiarity with regulations that apply to the vessel being applied for. You must be proficient in any software associated with engineering You must be educated to degree level and hold any other qualifications associated with Maritime engineering. Supervise engine room personnel and give advice as required. Certifications Class 1 Certificate of Competency – Marine Chief Engineer. Survival Craft and Rescue Certificate Advanced Firefighting Certificate Electrical/Electronic and control engineering repair/maintenance Certificate Ship Security Certificate Basic Seafarer Training Certificate Control ship operations and care Certificate Proficient in all aspects of caterpillar engines P.O. Box N-7235 Telephone: (242) 322-7982/ (242) 322-7983 Fax: (242) 322-7984 671 East Bay Street Nassau, Bahamas Email: tugservice(s)limited@gmail.com

FamGuard Corporation Limited Consolidated Statement of Profit or Loss Year Ended 31 December 2017 (Expressed in Bahamian dollars)

INCOME: Gross premium income (Note 16) Premiums ceded to reinsurers (Notes 16 and 22) Net premium income (Note 16) Annuity deposits Net premium income and annuity deposits Interest income Dividend income Realized gain (loss) on sale of financial assets Unrealized loss on financial assets (Note 6) Other operating income (Note 22) Total income BENEFITS AND EXPENSES: BENEFITS: Policyholders' benefits (Note 17) Reinsurance recoveries (Notes 17 and 22) Net policyholders' benefits Increase in reserves for future policyholders' benefits Total benefits Expenses Operating expenses (Notes 18-20, 22 and 23) Commissions (Note 22) Depreciation expense (Note 8) Bad debt expense, net (Notes 6 and 7) Impairment of intangible asset (Note 9) Amortization (Note 9) Total expenses Total benefits and expenses Net Income (Note 24)

2017

2016

$

$

103,090,427 (10,423,366)

101,069,634 (10,316,803)

92,667,061 7,099,037

90,752,831 12,224,103

99,766,098 13,725,317 1,471,320 84,218 (213,984) 1,763,984

102,976,934 13,494,595 1,432,720 (227,455) (603,559) 2,381,590

116,596,953

119,454,825

67,832,963 (2,749,895)

66,264,008 (4,913,622)

65,083,068 7,427,838

61,350,386 14,702,664

72,510,906

76,053,050

22,191,781 11,783,005 1,783,065 939,431 178,333 100,000

22,126,476 12,105,443 1,742,704 841,482 175,000 100,000

36,975,615

37,091,105

109,486,521

113,144,155

7,110,432

6,310,670

The accompanying notes are an integral part of these consolidated financial statements. The complete set of audited financial statements are available on the company’s website at www.famguardbahamas.com

PAGE 12, Thursday, May 31, 2018

THE TRIBUNE

UNION: STRIKE WOULD COST TOP VEGAS CASINOS OVER $10M A DAY LAS VEGAS Associated Press THE union representing thousands of Las Vegas casino workers estimated yesterday that the two largest resort operators would lose more than $10m a day combined if housekeepers, cooks and others go on strike at any time starting tomorrow. The Culinary Union released documents explaining how it thinks a one-month strike would impact MGM Resorts International and Caesars Entertainment, which

operate more than half of the properties that would be affected if 50,000 workers walk off the job. Workers last week voted to authorise a strike as disputes over workplace training, wages and other issues have kept the union and casino operators from agreeing on new contracts. The union conceded that it is difficult to estimate how the strike at more than 30 hotels would impact Las Vegas overall, since the last citywide labor action took place in 1984, when the city had 90,000 fewer hotel rooms and only about 12.8

million annual visitors. But it says MGM and Caesars would see a ten percent reduction in revenue because of the loss of group and independent travelers. Using the companies’ earnings reports for the first three months of the year, the union’s estimates show the one-month strike could reduce MGM’s earnings before interest, taxes and other items by more than $206m and Caesars’ by over $113m. The workers’ contracts expire at midnight tonight. They are bartenders, housekeepers, cocktail

and food servers, porters, bellmen, cooks and other kitchen workers at properties on the Las Vegas Strip and downtown Las Vegas, including Caesars Palace, Bellagio, Stratosphere, Treasure Island, The D and El Cortez. Dealers are not part of the Culinary Union. Casino-resorts that would not be affected by the strike include Wynn Las Vegas, Encore, The Venetian and Palazzo. MGM, which employees 24,000 of the workers, on yesterday said it met with union negotiators

Monday and has more talks scheduled this week. The company says it remains confident that it “can resolve the outstanding contract issues and come to an agreement that works for all sides”. Caesars said it “expects to agree to a new five-year contract with the Culinary Union on or about June 1 when the current contract expires”. About 12,000 of its workers are part of the negotiations. The union said it is asking both companies for new-skill training and job opportunities as the

operators continue to adopt new technology that can displace workers; an independent study to analyse the workload of housekeepers; and contract language that would protect the workers if properties are sold. “What is going to happen to my position?” Fernando Fernandez, a guest runner at Caesars Palace, said. “I think they are going to be disappearing it because robots are going to be available to deliver everything.” He said he wants training to fix or programme the robots that he believes could eventually replace him.

THE TRIBUNE

Thursday, May 31, 2018, PAGE 13

Europe expects to be hit by US tariffs on steel and aluminum PARIS Associated Press

EUROPE is bracing for the United States to slap restrictions today on imported steel and aluminum, a move that could provoke retaliatory tariffs and inflame trade tensions. Top European officials held last-ditch talks in Paris with American trade officials to try to avert US tariffs on steel and aluminum. But they did not sound optimistic. “Realistically, I do not think we can hope” to avoid either US tariffs or quotas on steel and aluminum, said Cecilia Malmstrom, the European Union’s trade commissioner. The United States in March announced tariffs of 25 percent on steel and tenpercent on aluminum. But it granted an exemption to the EU and other US allies; that reprieve expires tomorrow. Even if the US were to agree to waive the tariffs on imported steel and aluminum, Malmstrom said, “I expect them nonetheless to want to impose some sort of cap on EU exports.” European officials said they expect the United States to announce its final decision today. US commerce secretary Wilbur Ross attended meetings at the Organization for Economic Co-operation and Development in Paris on yesterday, and US trade representative Robert Lighthizer joins discussions in Paris on today. The US plan has raised the threat of retaliation from Europe and fears of a global trade war — a prospect that is already weighing on investor confidence and could hinder the global economic upturn. “Unilateral responses and threats over trade war will solve nothing of the serious imbalances in the world trade. Nothing,” French President Emmanuel Macron said in an impassioned speech at the Organization for Economic Co-operation and Development in Paris. In a clear reference to US President Donald Trump, Macron added: “These

solutions might bring symbolic satisfaction in the short term ... One can think about making voters happy by saying: I have a victory, I’ll change the rules, you’ll see.” But he said that those “who waged bilateral trade wars ... saw an increase in prices and an increase in unemployment.” Tariffs on steel imports to the US can help local producers of the metal by making foreign products more expensive. But they can also increase costs more broadly for US manufacturers who cannot source all their steel locally and need to import the raw material. That hurts the companies and can lead to more expensive consumer prices, economists say. Europe is expecting a decision from Trump during the day today, French finance minister Bruno Le Maire said. He pledged that the European response would be “united and firm”. If the US goes ahead with its tariffs, the EU has threatened to impose retaliatory

tariffs on US orange juice, peanut butter and other goods in return. Besides the US steel and aluminum tariffs, the Trump administration is also investigating possible limits on foreign cars in the name of US national security. After meeting with Ross, German economy minister Peter Altmaier told reporters that he doesn’t expect a decision soon on foreign cars. Ross criticised the EU for its tough negotiating position. “There can be negotiations with or without tariffs in place. There are plenty of tariffs the EU has on us. It’s not that we can’t talk just because there’s tariffs,” he said. He noted that “China has not used that as an excuse not to negotiate”. But Germany’s Altmaier insisted that the Europeans were being “constructive” and were ready to negotiate special trade arrangements, notably for liquefied natural gas and industrial goods, including cars. Macron also proposed to

PUBLIC NOTICE

start negotiations between the US, the EU, China and Japan to reshape the World Trade Organization to better regulate trade. Discussions could then be expanded to include other countries to agree on changes by the end of the year. Ross expressed concern that the Genevabased World Trade Organization and other organisations are too rigid and slow to adapt to

changes in global business. “We would operate within (multilateral) frameworks if we were convinced that people would move quickly,” he said. Ross and Lighthizer seem like the odd men out at this week’s gathering at the OECD, an international economic agency that includes the US as a prominent member. The agency issued a report yesterday saying “the threat of trade restrictions

Family Guardian Insurance Company Limited (Incorporated under the laws of the Commonwealth of The Bahamas) Statement of Financial Position As at 31 December 2017 (Expressed in Bahamian dollars)

ASSETS Cash on hand and at banks Receivables and other assets, net (Notes 7 and 21) Financial investment assets (Note 6) Fair value through profit or loss - affiliate mutual funds Available-for-sale Held-to-maturity Loans Total financial investment assets

2016 $ 8,302,909 21,781,896

18,179,718 12,860,400 137,880,900 83,717,605

16,729,005 11,871,846 131,569,128 81,746,872

252,638,623

241,916,851

6,520,948 24,113,540

7,979,721 11,918,748

312,552,528

291,900,125

LIABILITIES Policy Liabilities Reserves for future policyholders' benefits (Note 9) Other policyholders' funds (Note 10)

207,261,508 18,072,481

201,292,443 17,638,441

225,333,989 16,437,742

218,930,884 7,931,412

241,771,731

226,862,296

1,707,462 11,401,314 7,294,278 50,377,743

1,707,462 11,401,314 6,121,564 45,807,489

EQUITY Preference shares (Note 14) Ordinary shares (Note 14) Revaluation reserve (Note 13) Retained earnings Total equity

is no longer employed at Switcha Bahamas Ltd./F.S.G. Manufacturing Ltd. and is not permitted to conduct any business on behalf of the company.

2017 $ 10,564,683 18,714,734

Reinsurance assets (Note 9) Property, plant and equipment (Note 8) Total Assets

Payables and accruals (Notes 11, 21, and 22) Total liabilities

AUDLEY INGRAHAM

has begun to adversely affect confidence” and tariffs “would negatively influence investment and jobs”. The OECD also said persistent high oil prices could push up inflation and push down household incomes. After a first-quarter slowdown, the agency slightly revised down its forecast for world growth this year to 3.8 percent, with 3.9 percent expected next year.

Total liabilities and equity

70,780,797

65,037,829

312,552,528

291,900,125

These financial statements were approved by the Board of Directors on May 25 2018, and are signed on its behalf by:

Director

Director

The accompanying notes are an integral part of these financial statements.

Family Guardian Insurance Company Limited Consolidated Statement of Profit or Loss Year Ended 31 December 2017 (Expressed in Bahamian dollars)

INCOME: Gross premium income (Note 15) Premiums ceded to reinsurers (Notes 15 and 21) Net premium income (Note 15) Annuity deposits Net premium income and annuity deposits Interest income (Note 21) Dividend income Realized gain (loss) on sale of financial assets Unrealized gain on financial assets (Note 6) Other operating income (Note 21) Total income BENEFITS AND EXPENSES: BENEFITS: Policyholders' benefits (Note 16) Reinsurance recoveries (Notes 16 and 21) Net policyholders' benefits Increase in reserves for future policyholders' benefits (Note 9) Total benefits Expenses Operating expenses (Notes 17, 19, 21 and 22) Commissions (Note 21) Depreciation expense (Note 8) Bad debt expense, net (Notes 6 and 7) Total expenses Total benefits and expenses Net Income (Note 23)

2017

2016

$

$

103,090,427 (10,423,366)

101,069,634 (10,316,803)

92,667,061 7,099,037

90,752,831 12,224,103

99,766,098 12,106,665 977,890 141,683 526,719 846,594

102,976,934 12,060,872 980,855 (227,455) 256,486 1,437,788

114,365,649

117,485,480

67,832,963 (2,749,895)

66,264,008 (4,913,622)

65,083,068 7,427,838

61,350,386 14,702,664

72,510,906

76,053,050

20,483,553 11,688,318 1,499,524 572,086

20,422,786 11,986,590 1,361,112 271,856

34,243,481

34,042,344

106,754,387

110,095,394

7,611,262

7,390,086

The accompanying notes are an integral part of these financial statements. The complete set of audited financial statements are available on the company’s website at www.famguardbahamas.com

PAGE 14, Thursday, May 31, 2018

THE TRIBUNE

PUBLIC NOTICE

INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that we, KEILYA MARIA NEWBOLD and LEONARDO JONES of Camilla Way, West Bay Street, P.O. Box CB12392, parents of LOGAN MARIO NEWBOLD, a minor, intends to change his name to LOGAN MARIO JONES. 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, Bahamas no later than thirty (30) days after the date of publication of this notice.

NOTICE

NOTICE is hereby given that ROCHELLE BRENDA PHILIPPE of Dean’s Lane off Nasau Street, P.O. Box GT-2557, Nassau, 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 24th day of May, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

NOTICE is hereby given that MERLIE FRANCOIS of #51 Toote Shop Corner, Nassau, 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 24th day of May, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

MARKET REPORT WEDNESDAY, 30 MAY 2018

t. 242.323.2330 | f. 242.323.2320 | www.bisxbahamas.com

BISX ALL SHARE INDEX: CLOSE 1,959.89 | CHG -1.29 | %CHG -0.06 | YTD -103.78 | YTD% -5.03 BISX LISTED & TRADED SECURITIES 52WK HI 4.40 19.17 7.50 3.76 1.64 0.19 4.05 8.90 6.60 5.30 11.50 2.71 1.61 8.21 6.10 11.48 7.29 13.67 12.51

52WK LOW 3.50 17.43 7.50 3.32 0.90 0.12 3.30 8.40 6.00 3.15 9.00 2.30 1.40 7.25 6.00 8.78 5.67 3.35 12.01

1050.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

PREFERENCE SHARES

1.00 103.00 100.00 106.00 105.00 103.00 100.00 10.00 1.01

1.00 100.00 100.00 100.00 105.00 100.00 100.00 10.00 1.00

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

Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class E Commonwealth Bank Class J Commonwealth Bank Class K Commonwealth Bank Class L Commonwealth Bank Class M Commonwealth Bank Class N Fidelity Bank Class A Focol Class B

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

52WK LOW 100.00 100.00

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 18 (Series E) + Fidelity Bank Note 22 (Series B) +

SYMBOL FBB18 FBB22

Bahamas Note 6.95 (2029) BGS: 2015-1-3Y BGS: 2014-12-5Y BGS: 2015-1-5Y BGS: 2014-12-7Y BGS: 2015-1-7Y BGS: 2014-12-30Y BGS: 2015-1-30Y BGS: 2015-6-3Y BGS: 2015-6-5Y BGS: 2015-6-7Y BGS: 2015-6-30Y BGS: 2015-10-3Y BGS: 2015-10-5Y BGS: 2015-10-7Y

BAH29 BG0203 BG0105 BG0205 BG0107 BG0207 BG0130 BG0230 BG0303 BG0305 BG0307 BG0330 BG0403 BG0405 BG0407

BAHAMAS GOVERNMENT STOCK - (percentage pricing) 115.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

104.79 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

MUTUAL FUNDS 52WK HI 2.15 4.16 2.00 178.69 157.58 1.55 1.70 1.62 1.10 6.99 8.54 6.15 10.52 11.46 10.46

52WK LOW 1.67 3.04 1.68 164.74 116.70 1.48 1.62 1.57 1.04 6.41 7.62 5.66 8.65 10.54 9.57

LAST CLOSE 4.40 17.43 9.09 3.35 1.01 0.18 3.35 8.89 6.12 4.10 10.05 2.60 1.60 7.60 6.10 11.00 6.43 3.80 12.51

CLOSE 4.40 17.43 9.09 3.50 1.01 0.18 3.35 8.89 6.12 4.10 10.05 2.63 1.60 7.69 6.10 11.00 6.30 3.80 12.51

CHANGE 0.00 0.00 0.00 0.15 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.09 0.00 0.00 -0.13 0.00 0.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

1000.00 1000.00 1000.00 1000.00 1.00 100.00 100.00 100.40 100.00 100.00 100.00 10.00 1.00

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

CLOSE 100.00 100.00

CHANGE 0.00 0.00

108.49 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

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

LAST SALE 100.00 100.00 108.49 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

FUND CFAL Bond Fund CFAL Balanced Fund CFAL Money Market Fund CFAL Global Bond Fund CFAL Global Equity Fund FG Financial Preferred Income Fund FG Financial Growth Fund FG Financial Diversified Fund FG Financial Global USD Bond Fund Royal Fidelity Bahamas Opportunities Fund - Secured Balanced Fund Royal Fidelity Bahamas Opportunities Fund - Targeted Equity Fund Royal Fidelity Bahamas Opportunities Fund - Prime Income Fund Royal Fidelity Int'l Fund - Equities Sub Fund Royal Fidelity Int'l Fund - High Yield Fund Royal Fidelity Int'l Fund - Alternative Strategies Fund

VOLUME 115 3,000

1,500

VOLUME

EPS$ 0.361 0.932 -0.306 0.281 -0.973 0.000 -1.465 0.638 0.573 0.171 0.627 0.102 0.330 0.000 1.129 0.679 0.610 0.293 0.543

DIV$ 0.080 1.130 0.000 0.230 0.000 0.000 0.000 0.320 0.220 0.120 0.620 0.060 0.050 0.084 0.320 0.500 0.200 0.120 0.580

P/E 12.2 18.7 N/M 12.5 N/M N/M -2.3 13.9 10.7 24.0 16.0 25.8 4.8 N/M 5.4 16.2 10.3 13.0 23.0

YIELD 1.82% 6.48% 0.00% 6.57% 0.00% 0.00% 0.00% 3.60% 3.59% 2.93% 6.17% 2.28% 3.13% 1.09% 5.25% 4.55% 3.17% 3.16% 4.64%

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.00% 0.00% 0.00% 0.00% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 6.25% 7.00% 6.50%

INTEREST 6.00% Prime + 1.75% 6.95% 4.00% 4.25% 4.25% 4.50% 4.50% 6.25% 6.25% 4.00% 4.25% 4.50% 6.25% 3.50% 3.88% 4.25%

NAV 2.15 4.13 2.00 179.39 153.02 1.55 1.68 1.63 1.09 7.15 8.14 6.41 11.26 11.68 10.24

YTD% 12 MTH% 1.23% 4.12% -0.16% 5.10% 0.74% 2.38% 4.66% 3.89% -0.25% 4.57% 1.04% 4.26% -1.06% 2.15% 0.58% 3.61% -0.48% 4.84% -1.08% 1.77% -5.96% -3.05% 1.90% 4.59% 7.24% 11.96% 2.77% 3.88% 3.94% 4.69%

MATURITY 31-May-2018 19-Oct-2022 20-Nov-2029 30-Jul-2018 16-Dec-2019 30-Jul-2020 15-Dec-2021 30-Jul-2022 15-Dec-2044 30-Jul-2045 26-Jun-2018 26-Jun-2020 26-Jun-2022 26-Jun-2045 15-Oct-2018 15-Oct-2020 15-Oct-2022 NAV Date 30-Apr-2018 30-Apr-2018 26-Apr-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 31-Mar-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018 30-Apr-2018

MARKET TERMS 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

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

TO TRADE CALL: CFAL 242-502-7010 | ROYALFIDELITY 242-356-7764 | FG CAPITAL MARKETS 242-396-4000 | COLONIAL 242-502-7525 | LENO 242-396-3225

Nu Life Home HeaLtH Care is seeking 1) registered Nurses 2) registered Nurses with intensive care experience 3) Nursing assistants

Applicants should apply to: nulifehomehealthcare@hotmail.com

with resumé, 2 references and police certificate.

THE TRIBUNE

Thursday, May 31, 2018, PAGE 15

Reputable growing gaming company, accepting resumes for

Accountant

Essential Duties & Functions: (includes but not limited to) • Perform daily accounting tasks and manage month-end activities to ensure timely issue of cost reports incorporating key financial and non-financial KPIs • Maintain the Fixed Asset Register and associated depreciation schedules • Post to Quick Books and provide monthly detail to the Financial Manager for general journal entries • Perform bank and other reconciliations • Implement and promote compliance with processes and procedures surrounding creation of the annual budget and quarterly forecasts • Collect, analyze and summarize account information • Ensure the timely and accurate preparation of profit and loss accounts, budget, cash flows, balance sheets, variance analysis and commentaries • Monitor and promote compliance by business units • Contribute to the development and enhancement of management reporting systems • Provide advice and analysis on the financial consequences of business decisions to evaluate options for business operations • Keep up with financial policies, regulation and legislation • Verify, allocate, post and reconcile accounts payable and receivable Interested candidates are required to possess the following skills, attributes and qualifications: • Bachelor’s degree or greater in Accounting/ 5 years experience in related field • Exceptional financial and analytical skills • Advanced knowledge of MS Excel , QuickBooks and Microsoft Office Suite • Thorough knowledge of accounting and corporate finance principles and procedures • Excellent accounting software user • Strong communication and interpersonal skills • Strong attention to detail and confidentiality Interested qualified candidates may submit their resume via email to info@242careers.com. Deadline for submissions – June 6, 2018 Only successful candidates will be contacted.

PAGE 16, Thursday, May 31, 2018

THE TRIBUNE

Stock markets reverse course and surge as Italy fears fade NEW YORK Associated Press BANKS and energy companies surged yesterdy and smaller companies made huge gains as stocks got back almost all the ground they lost the day before. Investors reversed course as they hoped Italy would be able to avoid a new round of elections after all. Financial companies rallied as bond yields turned higher and energy companies rose along with US crude oil, which busted out of a five-day losing streak. The shift came after Carlo Cottarelli, nominated to be Italy’s next prime minister, said there were “new possibilities” to

form a government. Stocks had plunged the previous day as investors expected gridlock to be resolved with new elections that could have turned into a yes-or-no referendum deciding whether Italy would continue to use the euro. JJ Kinahan, chief market strategist for TD Ameritrade, said the market often reacts irregularly to political events like the uncertainty in Italy or tensions between the US and North Korea: stocks often fall fast and then recover in quick fashion. That process can sometimes repeat itself weeks or months later. “If there’s no follow-up news, they tend to come back near where they

started,” he said. “I wouldn’t count on it being done for the summer.” The S&P 500 index jumped 34.15 points, or 1.3 percent, to 2,724.01. The Dow Jones industrial average climbed 306.33 points, or 1.3 percent, to 24,667.78. The Nasdaq composite gained 65.86 points, or 0.9 percent, to 7,462.45. While the S&P 500 and Nasdaq recovered Tuesday’s losses and then some, smaller and more USfocused companies did ever better as investors continued to worry about trade. Small companies finished with minor losses Tuesday, and on yesterday they made even bigger gains than larger multinationals did. The Russell 2000 index surged 24.34 points, or 1.5 percent, and closed at a record high of 1,647.99. The Chinese government criticised the US, which had renewed a threat to raise duties on some imports from China. At the same time, officials from the US and European Union held talks on the tariffs the Trump administration has proposed on European steel and aluminum. European Union negotiations seemed pessimistic and said they expected the US to announce a final decision today. China and the EU have both said they will react to new tariffs imposed by the US with duties of their own, which has raised the prospect of greater tensions and the possibility of trade wars. Kinahan, of TD Ameritrade, said investors feel smaller companies are less vulnerable. Multinational companies have had a rough ride lately as investors reacted to trade tensions by shifting money into smaller and more USfocused companies.

“Much of their business is done domestically, so the tariffs shouldn’t affect them as badly,” he said. “But even if the tariffs don’t happen, many of those stocks are performing well.” Italy’s FTSE MIB stock index climbed 2.1 percent after a 2.7 percent drop a day earlier. Prices for Italian government bonds also rose, sending yields down following a huge surge the day before. The euro rose to $1.1648 from $1.1531, which was its lowest level in almost a year. The dollar rose to 108.85 yen from 108.24 yen. Germany’s DAX climbed 0.9 percent while the FTSE 100 index in Britain rose 0.7 percent. The CAC 40 in France lost 0.2 percent. Bond prices fell. The yield on the ten-year Treasury note rose to 2.84 percent from 2.79 percent. Interest rates rose and bank stocks recovered about half of their losses from Tuesday. When rates rise, banks can make more money on mortgages and other types of loans.

Energy companies rose as US crude oil climbed 2.2 percent to $68.21 per barrel in New York. Brent crude, used to price international oils, added 2.8 percent to $77.50 a barrel in London. Exxon Mobil rose 3.9 percent to $81.50. That was its biggest one-day gain since September 2016. Oil prices fell 7.6 percent in five days following reports OPEC countries and Russia might start producing more oil soon. Those countries cut production at the start of 2017, which helped take US crude from about $50 a barrel in late 2016 to more than $70 this month. They had agreed to keep production at its current levels until the end of this year, but upheaval in Venezuela and new sanctions on Iran could change their plans. Wholesale gasoline rose 1.9 percent to $2.18 a gallon. Heating oil gained 2.1 percent to $2.23 a gallon. Natural gas slid 0.6 percent to $2.89 per 1,000 cubic feet. Investors also reacted to more earnings from

retailers. Dick’s Sporting Goods soared 25.8 percent to $38.35 after it raised its annual profit forecast. Its first-quarter report was better than expected thanks in part to strong online sales. Its decision to stop selling assault rifles and cease selling guns to people under 21 didn’t appear to affect its business. Clothing company Chico’s FAS plunged 18.2 percent to $8.17 after its profit fell short of expectations and luxury retailer Michael Kors dropped 11.4 percent to $60.41 following a disappointing forecast for the year. Gold rose 0.2 percent to $1,301.50 an ounce. Silver added one percent to $16.54 an ounce. Copper gained 0.2 percent to $3.07 a pound. Japan’s Nikkei 225 stock index dropped 1.5 percent and the Kospi of South Korea dropped two. The Hang Seng in Hong Kong slipped 1.4 percent.