06042018 business

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MONDAY, JUNE 4, 2018

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$400m extra in VAT?: ‘Not a chance in hell’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

T

HERE is “not a chance in hell” that the 60 percent VAT rate increase will generate the extra $400m revenue the government is targeting, a prominent businessman is warning.

Sir Franklyn Wilson told Tribune Business that it was “unwise” for the Minnis administration to assume a 12 percent VAT will deliver a revenue increase of the same proportion, as the hike will “incentivise” Bahamians to find legal ways to avoid the tax.

Describing himself as “shell shocked” by Wednesday’s budget, the Arawak Homes chairman said he was “at a loss to understand

* Rate rise ‘incentivises’ tax avoidance * Sir Franklyn ‘shell shocked’ by harsh medicine * Questions why civil service wages still rising * Travel exemption contradicts clothing waiver

SIR FRANKLYN WILSON

why” the government was ignoring all research and advice by ditching the low-rate, “minimal exemptions” VAT model.

He also pointed to several contradictions in the budget communication, in particular the “travel exemption” increase to $500 that coincides with the duty waiver for footwear and clothing retailers.

Questioning “why anyone would go into the retail business”, Sir Franklyn said the VAT-induced reduction in consumer spending power was bound to have

“significant repercussions” for the Bahamian economy and its projected growth rates.

And he also challenged the projections for an everincreasing civil service wage bill, given that “the whole thrust of what is being said is to drive personal emoluments down long-term”.

Sir Franklyn said it was vital that KP Turnquest, deputy prime minister, provide further rationale for the pain the 2018-2019 budget will inflict when he kicks-off

SEE PAGE 4

DPM says ‘open to all’ 12% vat alternatives

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Deputy Prime Minister last night said the government “remains open to all viable” alternatives to a 12 percent VAT, despite private sector fears that “the train has already left the station”.

KP Turnquest indicated to Tribune Business he was willing to listen to credible alternatives to the 60 percent valueadded tax (VAT) rate hike, which the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) has voiced its “objection” to in the

* Adds economy to still grow, but by less * Private sector fears ‘train has already left’ * VAT rise ill-timed amid recovery signs

K PETER TURNQUEST strongest possible terms.

The Chamber, in a May 31 letter signed by both Michael Maura and Edison Sumner, its chairman and

chief executive, respectively, warned that the increase - projected to suck an additional $400m from Bahamian consumers and businesses - was especially ill-timed with the economy and investors starting to show signs of renewed growth and confidence.

Hitting out at the lack of consultation over the budget’s revenue-enhancing measures, the Chamber branded this “unacceptable and not in keeping with the

DPM pledges public service ‘right sizing’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE deputy prime minister yesterday pledged a medium-term “right sizing of the public service”, amid warnings the government cannot delay forced civil service terminations for ever.

KP Turnquest, pictured, responding to charges that the budget did too little to

* SAYS SPENDING WILL ‘MODERATE’ MEDIUM TERM * AMID FEARS $500M INCREASE ‘UNSUSTAINABLE’ * CHAMBER: PUBLIC SECTOR LAY-OFFS CAN’T BE AVOIDED address the government’s soaring expenditure, told Tribune Business that its

fiscal forecasts call “for a moderation” of recurrent spending once the $360m arrears backlog is paid off over the next three years.

He added that recurrent, or fixed-cost spending, would be further curtailed by capping it as a percentage of gross domestic product (GDP), with the Fiscal Responsibility Bill committing the government to constrain its growth in line with the long-term rise in economic output.

SEE PAGE 7

transparency, accountability and collaboration promised by the Government of The Bahamas”.

It added: “As we communicated today, the BCCEC cannot support any tax proposal which is not founded on comprehensive economic analysis and has not received BCCEC and private sector review and feedback.

SEE PAGE 3

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Web shops: tax rises attempt to seize industry

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

* SEVEN-DAY LEGAL ACTION ULTIMATUM * OPERATORS, 3,000 JOBS ‘DECIMATED’ INSIDE YEAR * WARN OF SANCTIONS IF SECTOR GOES ‘UNDERGROUND’

THE government has been accused of trying to seize control of the web shop industry through tax increases that will “decimate” all operators and 3,000 jobs in less than a year.

The Bahamas Gaming Operators Association, the government’s in a furious post-budget that counter-attack, has warned proposals would be counthe government it will ter-productive, and have take legal action over the unintended consequences, since they threat“expropriatory, ened to drive the discriminatory, “numbers” busiexcessive and penal” ness underground tax rises of up to where it would be 355 percent unless it agrees to talks harder to regulate before the week - a development ends. that would attract Alfred Sears the attention of QC, the Assosanctioning interciation’s attorney, national regulators. said the proposed ALFRED SEARS QC Arguing that “sliding scale” tax research had shown structure that the govern- that the optimum tax rate ment intends to impose on was between 15-20 percent the industry is tantamount of “gross gambling revto “compulsorily acquiring enue”, Mr Sears said the more than 90 percent” of industry’s revised taxation the industry’s revenue. structure would also “prejuMr Sears, in a May 31, dice” web shops’ ability to 2018, letter to KP Turn- offer shares to the Bahaquest, the deputy prime mian public through initial minister, argued that the public offerings (IPOs). tax increases were so “drasSuch applications were tic” that the government’s currently before the Secumain motive appeared to Commission for be “expropriation” of the rities approval, and Mr Sears domestic gaming sector meaning that it was seeking said the outcome of previto seize, and take over, their ous Supreme Court rulings - that parties affected by property.

He added that the government decisions had a planned five percent stamp “legitimate expectation” of tax on patron deposits to prior consultation, and that web shops, a move possibly the court could interfere intended to deter Bahami- with Parliament’s legislaans from using the sector as tive process before a Bill a money transmission busi- is passed - gave the Assoness, amounted to “double ciation and its members an taxation” should these “actionable claim” against the tax increases. monies be used for gaming.

The former attorSEE PAGE 5 ney general also warned

Fin Secretary: Bahamas must avoid Barbados’ ‘frog in pot’ fate

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas must escape “the frog in the pot” scenario if it is to avoid Barbados’s descent into an International Monetary Fund (IMF) bail-out of its unsustainable 175 percent debt burden.

Marlon Johnson, the acting financial secretary, last night told Tribune

* ALTHOUGH BAHAMAS ‘STILL A WAYS AWAY’ * DPM: WE WILL AVOID BARBADOS’ FALL * GOVT WANTED WOES DEALT WITH ONE-TIME Business that the fellow Caribbean nation provided a “cautionary tale” that

MARLON JOHNSON

SEE PAGE 2

PAGE 2, Monday, June 4, 2018

THE TRIBUNE

BREADBASKET’S VAT ‘ZERO RATING’ BRINGS RETAIL RELIEF

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

GOVERNMENT ministers and officials yesterday brought relief to food retailers by confirming that the budget’s “breadbasket” items will be treated as “zero-rated” for VAT purposes.

However, their property and casualty insurance counterparts were not so lucky, as both KP Turnquest, deputy prime minister, and Marlon Johnson, acting financial secretary, suggested

* BUT RESIDENTIAL PROPERTY INSURANCE LIKELY EXEMPT * TRANSITION GUIDANCE NOTES FOR RELEASE THIS WEEK the removal of VAT from residential property premiums will be treated as “exempt”.

While both men said they needed to confirm the insurance treatment, “exempt” status means that insurers will be unable to “net off” or claim back the

VAT paid on their inputs as there is no “output” VAT paid by insureds.

As a result, insurance companies will either have to absorb the increased tax burden or pass this on to consumers. Most will likely do the latter, meaning that the removal of VAT from residential insurance premiums may not result in lower costs for consumers.

“All the material things will be zero-rated,” Mr Johnson told Tribune Business of the VAT “eliminations” unveiled in the 2018-2019 budget. “The insurance once I have to confirm, for all the others

they are zero rated.”

He also revealed that “guidance notes” for the transition to a 12 percent VAT, with its accompanying exemptions, will be released this week so the private sector “understands how to treat things already in train” such as contracts and other agreements.

Mr Turnquest, meanwhile, told Tribune Business: “Breadbasket to be zero-rated. Insurance to be exempt. The latter is subject to confirmation.”

That will ease the concerns of food retailers, as they will no longer have to pay VAT on their inputs in

proportion to the amount of inventory they sell, as well as removing the burden from consumers.

“Exempt” status could have been especially problematic for food stores. For example, if 60 percent of a food store’s inventory was VAT-able, and 40 percent “exempt”, that business would be unable to reclaim 40 percent of the VAT paid on its “input” costs - such as rent and utilities.

This, in turn, increases that business’s operating costs, forcing it to increase prices to compensate. These price increases might encompass a broader

base of goods, and greater rises, than if all goods had been VAT-able.

Mr Turnquest said the zero-rating of “breadbasket” items, and removal of VAT from medicine, was designed to relieve the burden of a 12 percent rate on “those most vulnerable families”.

He added: “We appreciate the sacrifice Bahamians are being called upon to make. And this is why we will remain committed to proper fiscal management, so that The Bahamas does not get into a spiral of everincreasing tax burdens on its citizens.”

Fin Secretary: Bahamas must avoid Barbados’ ‘frog in pot’ fate FROM PAGE ONE illustrated just why the Minnis administration felt it

must take decisive action in the 2018-2019 budget.

While The Bahamas is “a ways away” from treading

in Barbados’ footsteps, Mr Johnson said Ministry of Finance officials were continually warning about a scenario where this nation could follow its lead as “the heat turns up” through credit rating downgrades and spiralling interest (debt servicing costs”.

“I think it’s a cautionary tale for Bahamian governments, and all governments, as to why it is important to address big fiscal imbalances decisively and comprehensively to avoid ending up, down the road, in the situation Barbados is facing now,” Mr Johnson said.

“We really, truly wanted to avoid kicking the can down the road. The government wanted to be truly open with the Bahamian people in this budget on all outstanding commitments that are due. We wanted them included in the budget.

“One, we wanted to address the structural issues, the arrears ($360m), and ensure there was sufficient funding to address the known commitments of the government. Going forward, the government wanted to ensure we didn’t

end up in a situation where we would be forced to go to the IMF or any external body, which would take policy control outside of the government itself.”

Mr Johnson’s message is that pain and sacrifice at the hands of their own government now, via a 60 percent value-added tax (VAT) rate hike to 12 percent, and other revenue-enhancing measures will be easier medicine for the Bahamian people to swallow than any IMF prescription imposed from outside.

The government is seeking $500m in extra tax revenues to finance a similar increase in spending, which is designed to pay off $172m in unfunded arrears in 2018-2019 plus provide an extra $79m to end the “sham” of governments knowingly under-budgeting for certain expenditure lines that were bound to cost more.

Barbados’s newly-elected government announced last week that it had no choice but to go “cap in hand” to the IMF after discovering similar unknown, unfunded spending commitments that pushed its debt levels to $15bn or

171 percent of GDP. The country has also suspended debt repayments to foreign creditors with its Central Bank reserves critically low at $220m, amid fears these will be exhausted and Barbados will lose control of its exchange rate.

Mr Johnson yesterday agreed The Bahamas, with a debt-to-GDP ratio of around 58 per cent thanks to the recent revision to the National Accounts, was “a ways away” from falling into Barbados’s trap.

“I don’t think there was anything imminent,” he told Tribune Business. “But at the administrative level we impress upon the government the ‘frog in the pot’ scenario, where the heat starts turning up, where you continue to face downgrade after downgrade, and your situation becomes too tenuous to manage.

“We were still a bit aways, but wanted to avoid getting to the point where our financial situation deteriorates to the position where Barbados is now.”

Mr Johnson’s concerns were echoed by KP Turnquest, deputy prime minister and minister of

finance, who said: “The Barbados experience should serve as a cautionary example to us in The Bahamas.

“The decision by this government is to ensure that The Bahamas remains strong and viable, and that we never enter into a situation such as Barbados is facing... We remain fundamentally strong and our economy is growing. However, as we are all aware, we have been trending in the wrong direction.

“The fundamental job of any government is to protect the long-term integrity of the society and the economy. And that is what we are doing. We understand it is unpopular. We appreciate it requires real sacrifice.

But we have seen the example of Barbados and others, and our actions will ensure that we avoid ending up where they are.”

Tribune Business sources, speaking on condition of anonymity, suggested the government wanted to deal with any required fiscal correction “one time”, rather than drag it out over many years. Dealing with it over the next three years, they

SEE PAGE 6

THE TRIBUNE

Monday, June 4, 2018, PAGE 3

UNIONS PLAN PUSH FOR VAT-OFFSET WAGE RISES

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

TRADE unions leaders “absolutely” plan to push for wage and benefit increases to offset the impact of a 60 percent VAT hike on Bahamians.

Bernard Evans, the National Congress of Trade Unions (NCTU) president, told Tribune Business that middle and lower income Bahamians were “getting the brunt” of a fiscal austerity strategy where they were constantly being asked “to do more with the same dollar”.

Speaking prior to the Labour Day tragedy, Mr Evans said the government “cannot keep on taking and

* LOWER, MIDDLE CLASSES ‘GETTING BRUNT’ * BEING ASKED TO ‘STRETCH DOLLAR FURTHER’ * EVERYONE WORKING ON ‘SHOESTRING’

BERNARD EVANS

taking and taking” more from Bahamians in taxes in an environment of wage stagnation and minimal economic growth.

Warning that the increase in living costs, and reduction in disposable income and purchasing power, was continuing to shrink the middle class, the NCTU chief said the trade union was “very, very concerned and surprised” by the proposed 12 percent VAT rate.

“There was no kind of notification, and the effective date is a month away,” Mr Evans told Tribune Business. “It’s been proven very difficult to get salary increases, and at the same time they’re going to levy additional taxes and we’ll

have to stretch that dollar further.”

He revealed that the trade unions had a meeting with the Prime Minister scheduled for last Wednesday afternoon following the budget communication, with Dr Hubert Minnis informing them the government had decided to “stop avoiding the inevitable” and simply follow through with the VAT increase.

Pointing out that costs continued to increase without VAT, Mr Evans said the trade unions had no alternative but to seek wage increases or “some other benefit in kind”, such as reduced utility bills, to offset the tax increase.

“Something has to give,”

he told Tribune Business.

“They can’t keep taking and taking and taking.

It’s really the middle class that carries the economy and is the bedrock of the economy.

“They send their children to private school, hire maids and gardeners, but every year that gets less and less.”

Mr Evans suggested that The Bahamas appeared to be headed in the same direction as other Caribbean countries, where most of the population was low income and very few were wealthy, with nothing in between.

“We are very concerned that the middle class framework appears to be getting

worse and worse,” he told Tribune Business. “I think that right now we are all operating on a shoestring budget with everything increasing around us.

“We’re trying to make ends meet as best we can, and this doesn’t help.

Taking VAT off breadbasket items and then increasing the rate on other things, it seems they’re taking with one hand but giving with the other and we’re still paying.

“They keep asking us to do more with a dollar, but that dollar is not increasing and, in some cases, they’re letting people go. The lower income and middle class seem to be getting the brunt of it.”

DPM says ‘open to all’ 12% vat alternatives FROM PAGE ONE

“At a time that The Bahamian economy is beginning to show some signs of recovery, we have serious concerns that the

proposed increase in VAT will negatively impact investor confidence, reduce consumers’ disposable income and further challenge a shrinking middle class.”

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Messrs Maura and Sumner also warned that the one month’s notice given to the private sector to implement the VAT-related changes by July 1, 2018, was “unrealistic and impractical”. They contrasted this with the year-long period granted to prepare for VAT’s initial introduction in January 2015, and the further six months allowed for all businesses to come into compliance.

The rate change, and numerous new VAT “exemptions”, mean businesses - especially retailers and wholesalers - are faced with having to reprice thousands of items on shelves and in inventory, as well as alter computer software and point-of-sale systems.

“The BCCEC respectfully offers that an increase in the VAT rate, along with the expansion of the exemptions under VAT, will be economically disruptive to the nation, commercially challenging to businesses and complicate the current system of VAT,” the Chamber said in its letter, issued after it met with Mr Turnquest and his officials on Thursday afternoon.

“The proposed increase in exemptions goes diametrically against the recommendations of the BCCEC as well as the government of The Bahamas’ own VAT consultants.” The Chamber letter also noted

that the government had committed to sharing the economic and fiscal analysis leading to the 12 percent VAT increase.

Mr Turnquest yesterday conceded to Tribune Business that the VAT rate increase might reduce the level of Bahamian economic growth projected for 2018 and 2019, but would not completely wipe it out.

He based his optimism on the fact growth was being driven through the tourism and foreign direct investment (FDI) sectors, both of which are led by external factors unlikely to be as heavily impacted as the domestic economy by increased taxation.

“Although there may be some moderation in consumption, the good news is that the economic recovery is led by several significant investments in our export sector, meaning tourism,” Mr Turnquest said.

“That means that there may be a slight fall in the level of growth, but we anticipate that the trajectory will remain and that we will continue to see positive economic growth.”

Pre-Budget, The Bahamas was projected to see 2.5 percent and 2.2 percent GDP in 2018 and 2019, respectively. However, the VAT rise will reduce consumer spending power and disposable incomes, further pressure the middle and

lower income classes as a result of the tax’s regressive nature, and risks having a negative effect on business and investor confidence.

The government appears to be “betting” that external factors largely unaffected by domestic tax developments, such as Baha Mar’s full opening; the 18 percent stopover visitor rise in the first quarter; and FDI pipeline will help offset VAT’s domestic impact and keep the economy moving.

Sources familiar with the government’s thinking, speaking on condition of anonymity, told Tribune Business it felt there was still sufficient capacity in the Bahamian economy to absorb the VAT increase - especially after the Department of Statistics increased its size, as measured by GDP, to nearly $11bn in real terms.

And they added that much of the $172m arrears that the government plans to pay in the 201802019 fiscal years is owed domestically to Bahamian businesses and vendors.

Bills such as $10.751m in VAT refunds, and an extra $1.5m for the National School Lunch Programme, will now be paid and the money circulate in the economy, boosting economic activity in theory.

But Mr Maura, the Chamber’s chairman, warned that it was “difficult

to see” how the Bahamian economy could escape a new recession given the magnitude of the planned VAT rate hike.

Lamenting the government’s failure to consult, he told Tribune Business: “There’s no doubt in our [private sector] minds that if we had been given the opportunity, and are still given the opportunity, to sit with government; there is no doubt in our minds we could make their plan even better than it is today.”

Asked whether he felt there was still sufficient time to persuade the government to change course, Mr Maura replied: “The concern many of us have is that train has left the station. We would hope the government stops for a moment, takes a pause and listens because this will give us the opportunity.

“We want our economy to turn around, we want our debt to come down, we want a balanced budget, we want social programmes to support the most vulnerable, we want tax and incentive policies that promote local and foreign investment, and we want to support our government.

“If we partner together we can address these challenges, and arrive at a much more effective economic and fiscal plan.”

PAGE 4, Monday, June 4, 2018

THE TRIBUNE

$400m extra in VAT?: ‘Not a chance in hell’ FROM PAGE ONE

debate this Wednesday.

Otherwise, the Sunshine Holdings chief warned, the confidence of many Bahamians will be shaken through the belief that the government is “making things up on the fly”.

“I’m still so shell shocked,” Sir Franklyn told Tribune Business of the budget. “I haven’t had a chance to really digest it fully, but my first blush is this is really, really bad news. This is really troubling. What else could you say?

“What I’m fearful of, and fearful is not the right term, is the government is not going to get the revenue it

thinks it’s going to get from this initiative. They’re providing sufficient incentive now for people to get into legitimate tax avoidance.

“You cannot assume that, because you got so much money at 7.5 percent, if you go to 12 percent it’s a proportionate increase,” Sir Franklyn continued. “My position is that it’s not prudent. There’s not a chance in hell of that happening.

“People will find legitimate ways to get around it.

They are giving incentives to find ways to be more aggressive in avoiding VAT. He’d [Mr Turnquest] better hope and pray the economy grows if he’s to get that revenue.”

Such a proportionate increase is exactly what the

government’s budget numbers appear to be banking on. They suggest that a 60 percent VAT rate increase, going from 7.5 percent to 12 percent, will boost gross VAT revenues from the $663.562m forecast in 20172018 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. Yet Sir Franklyn reiterated: “It appears to me that he [Mr Turnquest] will not get 60 percent more revenues because he increased the rate 60 percent. There’s not a chance in hell of that happening.

“Once you go down this path, you’re creating more

and more incentive for people to look to avoid this tax... I am at a loss to understand why. All the studies showed and established that the best model was a lowrate, minimal exemptions VAT. There was a reason for that.

“I don’t understand this.

I am at a loss to understand the logic behind this budget.

I’m looking forward to the Minister’s address on the second reading, where he will provide the rationale for this.”

Should the government proceed with its VAT increase plan, The Bahamas will have come “full circle” in just five years. For it will have ended up back where it started in 2013, when a 15 percent VAT with multiple exemptions was comprehensively rejected by the private sector and the government’s own advisers.

Mr Turnquest, in last week’s budget unveiling, said profligacy by past PLP and FNM administrations meant the government had little choice but to force a heavy dose of fiscal medicine on the Bahamian people.

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.

The government’s projection of a $400m revenue increase from the VAT rate rise is central to projected $629m, or 31.1 percent, revenue growth for the 20182019 fiscal year - a target that many are already sceptical of.

Perhaps anticipating a reduction in economic activity, and business turnover, as a result of the VAT increase, the government is predicting business licence fee income will drop from the $150m forecast in 20172018 to just $101.207m in the upcoming budget year

- a fall of 32.5 percent.

Sir Franklyn, meanwhile, said it was ironic that The Bahamas now appeared to be following the same path as the high-tax European states responsible for much of the current pressure facing the country’s financial services industry.

“This is precisely why so many people found The Bahamas useful [for tax planning purposes] because their home countries kept doing stuff like this,” he said.

“Europe has proven that high rates and exemptions create incentives for people to exploit loopholes.”

Turning to other perceived anomalies with the 2018-2019 budget, Sir Franklyn said the increased “personal travel exemption” and import duty waiver for clothing and footwear retailers highlighted its “give on one hand, take away with the other” feel.

“Think about this,” he told Tribune Business. “You got more exemption to go to Miami, or go online. Why go into the retail business in this country? What impact is that going to have on business licence revenues if sales drop?”

Sir Franklyn added that the budget “has raised a lot of questions” on both the government’s spending and economic growth. “What is this? What is the logic behind this? I do not know a school of thought, any creditable school of thought, where you do something like this and maintain the economic growth in the same budget,” he asked.

“I’m waiting and anxious to see how the Minister explains this in terms of why we should not believe this will not have significant repercussions in terms of the impact on the economy.

I’m waiting to see, when he speaks next time, why we should not see this as being really, really bad news.

“On the surface, I do not see how this can possibly be anticipated to trigger economic growth. On the surface these seem to be some seriously wrong policy moves. He [Mr Turnquest]

now has to explain why this is a good move. Why go down this road of increasing the rate, increasing expenditure, when all data from credible sources said this was not the right policy move.”

The deputy prime minister last week admitted that the government’s annual wage bill has increased by $226m, or 40 percent, in the seven fiscal years to 2018-2019, and Sir Franklyn argued that not enough was being done to restrain, or cut, its growth.

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.

“There’s so much in this budget that makes me wonder what is going on,” Sir Franklyn told Tribune Business. “How could personal emoluments be going up when the whole thrust of what was being said was to drive personal emoluments down long-term.

“How is that? The biggest single discretionary thing the government can do to reduce expenditure is personal emoluments. How could that be going up? When you cut away the politics, how could that be happening?”

He added: “I am hoping and praying that the next time the Minister speaks he will address issues like this, and give people a degree of confidence the government does, in fact, have a plan.

Otherwise people will think the government is making things up on the fly, and that could shake up confidence in a lot of ways.”

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THE TRIBUNE

Monday, June 4, 2018, PAGE 5

Web shops: tax rises attempt to seize industry FROM PAGE ONE Web shop chiefs were understood to be meeting late yesterday afternoon to further discuss their response to the government, as the Chamber of Commerce’s chairman backed their right to be consulted rather than be dictated to on measures affecting their business.

Acknowledging that gaming was often categorised with alcohol and tobacco as an anti-social activity, Michael Maura said of the web shops: “Even they deserve consultation.

Even they deserve an opportunity to sit down and have dialogue, rather than sitting by the radio and learning the government plans to tax gaming as much as they did.”

Mr Sears, meanwhile, has already set a seven-day deadline for the government to consult his clients or face Supreme Court action over “the proposed unconstitutional, discriminatory, punitive, irrational and unfair sliding scale tax increase and stamp duty deposit revenue measures on the revenue of gaming operators”.

He added: “Clearly, the proposed sliding scale rate on taxable revenue, coupled with the five percent deposit stamp tax, are exceptional and would have immediate, irreversible damage amounting to expropriation without compensation, cause massive unemployment, the closure of the web shops, loss in revenue and other substantial damage and prejudice to gaming operators.”

Seeking to build the web shop industry’s case for discrimination, Mr Sears’ letter cited the taxes - and tax rates - said

to be paid by other Bahamian businesses that were not subjected to the same “draconian increases” in the 2018-2019 budget.

The companies cited were all BISX-listed companies, and the letter paid special attention to Commonwealth Brewery given its involvement in liquor production, wholesale and retail activities that some see as having a similar social impact to gaming.

Mr Sears said it was “inequitable” for Commonwealth Brewery to be paying just six percent of its $133m annual revenue in taxes in comparison to the proposed structure for the web shops.

Suggesting that the focus on web shop gaming was contrary to the principles of “progressive” taxation, Mr Sears said foreignowned resort casinos were being treated more favourably than their domestic counterparts. He added that casinos were taxed at $4.1m, plus five percent of each dollar of taxable revenue in excess of $20m.

The present tax structure 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.

However, under the proposed new “sliding scale” they will pay: • Up to $20m 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.

Warning of the likely repercussions, Mr Sears

said: “The inevitable consequences of the government’s misguided approach in this proposed selective tax increase will be the creation of “black market” gambling houses which will expose our jurisdiction to possible international sanctions.

“The discriminatory proposed sliding scale rates will have a materially prejudicial effect on the pending share offering fund applications before the Securities Commission for permission to offer ownership shares in gaming houses to the wider Bahamian public.”

The Association argued that there was nothing to show the proposed “sliding scale” was sustainable, pointing to a 2016 report

by Copenhagen Economics that suggested the optimum online gaming tax rate was between 15-20 percent of gross gambling revenue.

“If the proposed sliding scale is implemented, then it would result in the Bahamian government expropriating, or compulsorily acquiring, more than 90 percent of our clients’ revenue through the various forms of taxation and licensing fees,” Mr Sears warned.

“Moreover, this would represent an anomalous 400 percent increase in the tax rate over the revenue collected by the Bahamas Gaming Operators.

The result of this drastic increase in the tax rate, without industry consultation, would decimate most of the seven gaming operators within a year of the implementation of the government’s proposal.

“Therefore, the predominant motive appears not to be revenue raising but, rather, the penal elimination of smaller operators and the expropriation of

the larger gaming operators under the guise of tax measures.”

He added that the web shop sector already employs around 2,800 Bahamians, and contributes $25m in taxes and fees to the government’s Consolidated Fund annually.

Mr Turnquest last week denied that the government was “targeting them or trying to destroy” the web shop industry, arguing that the tax rate faced by such businesses in other jurisdictions was as high as 80 percent.

He added, though, that the former administration had ignored the results of a referendum/opinion poll that rejected the web shop industry’s legalisation. And the deputy prime minister suggested the sector needed to contribute more, given the anti-social impact gaming has in sucking money out of the economy and redistributing it into the hands of a few.

Governments worldwide 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.

PAGE 6, Monday, June 4, 2018

Giuliani plays down idea of Trump self-pardon WASHINGTON Associated Press AN ATTORNEY for President Donald Trump stressed yesterday that the president’s legal team would contest any effort to force the president to testify in

front of a grand jury during the special counsel’s Russia probe but downplayed the idea that Trump could pardon himself.

Rudy Giuliani, in a series of television interviews, emphasised one of the main arguments in a newly unveiled letter sent

by Trump’s lawyers to special counsel Robert Mueller back in January: that a president can’t be given a grand jury subpoena as part of the investigation into foreign meddling in the 2016 election.

But he distanced himself from one of their bolder

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arguments in the letter, which was first reported Saturday by The New York Times, that a president could not have committed obstruction of justice because he has authority to “if he wished, terminate the inquiry, or even exercise his power to pardon”.

“Pardoning himself would be unthinkable and probably lead to immediate impeachment,” Giuliani told NBC’s “Meet the Press”.

“And he has no need to do it, he’s done nothing wrong.”

The former New York City mayor, who was not on the legal team when the letter was written, added that Trump “probably does” have the power to pardon himself, an assertion challenged by legal scholars, but says the president’s legal team hasn’t discussed that option, which many observers believe could plunge the nation into a constitutional crisis.

“I think the political ramifications would be tough,” Giuliani told ABC’s “This Week”. ‘’Pardoning other people is one thing, pardoning yourself is tough.”

Trump has issued two unrelated pardons in recent days and discussed others, a move that has been interpreted as a possible signal to allies ensnared in the Russia probe.

The letter is dated Jan 29 and addressed to Mueller from John Dowd, a Trump lawyer who has since resigned from the legal team. Mueller has requested an interview with the president to determine whether he had criminal intent to obstruct the investigation into his associates’ possible links to Russia’s election interference.

Giuliani said yesterday that a decision about an interview would not be made until after Trump’s summit with North Korean leader Kim Jong Un on June 12 in Singapore, and he cast doubt that it

would occur at all.

“I mean, we’re leaning toward not,” Giuliani told ABC. “But look, if they can convince us that it will be brief, it would be to the point, there were five or six points they have to clarify, and with that, we can get this — this long nightmare for the — for the American public over.”

Trump’s legal team has long pushed the special counsel to narrow the scope of its interview. Giuliani also suggested that Trump’s lawyers had been incorrect when they denied that the president was involved with the letter that offered an explanation for Donald Trump Jr’s 2016 Trump Tower meeting with Russians who offered damaging information on Democrat Hillary Clinton.

“This is the reason you don’t let the president testify,” Giuliani told ABC. “Our recollection keeps changing, or we’re not even asked a question and somebody makes an assumption.”

If Trump does not consent to an interview, Mueller will have to decide whether to go forward with a historic grand jury subpoena. His team raised the possibility in March of subpoenaing the president, but it is not clear if it is still under active consideration.

A court battle is likely if Trump’s team argues that the president can’t be forced to answer questions or be charged with obstruction of justice. President Bill Clinton was charged with obstruction in 1998 by the House of Representatives as part of his impeachment trial. And one of the articles of impeachment prepared against President Richard Nixon in 1974 was for obstruction.

Giuliani suggested yesterday that, despite the president’s broad powers, a theoretical charge of obstruction may be possible in some cases.

THE TRIBUNE

Fin Secretary: Bahamas must avoid Barbados’ ‘frog in pot’ fate FROM PAGE TWO said, would ensure that the harshest austerity did not run into a likely general election, which is due by 2022.

One source added that the revenue increase, which is projected to take the government’s recurrent income to just over 20 percent of GDP, would also help address IMF and credit rating agency concerns over what is perceived to be a relatively low take compared to the economy’s size.

The Chamber of Commerce, though, has said tax rate comparisons with other Caribbean states are “inappropriate and, in fact, irrelevant”. Others have pointed out that The Bahamas’ ratio of revenue to GDP looks low once again because of the recent upward revisions to the size of the economy.

Dr Hubert Minnis, meanwhile, has come under fire from the government’s political opponents for suggesting that devaluation could have resulted without the budget’s tax measures. This seemingly contradicted Mr Turnquest’s budget assertion that the Central Bank’s external reserves are healthy at just over $1.6bn.

THE TRIBUNE

Monday, June 4, 2018, PAGE 7

DPM pledges public service ‘right sizing’

FROM PAGE ONE “The projection calls for a moderation of recurrent expenditure as the arrears are paid off,” Mr Turnquest told Tribune Business, after this was projected to soar by 23.3 percent or $489m in the upcoming 2018-2019 fiscal year.

“We anticipate that within the fiscal strategy there will be an indicative cap on expenditure as a percentage of GDP, so as to avoid the persistent run-up and expansion of government expenditure over time.”

Mr Turnquest also promised that the government’s unfunded public sector pension liabilities, which represent a “ticking timebomb” projected by the IMF to hit $3.7bn in 2030, would be a “key element” of the fiscal plans once the present situation was addressed.

He pointed to the fact that around half the budget “heads”, or line items, had been reduced or held “flat” against 2017-2018 figures as evidence that the government is taking its commitment to cut spending seriously.

“We remain serious about expenditure restraint,” Mr Turnquest told Tribune Business. “A key element of our midterm strategy will be the right-sizing of the public service.

And pension reform.

“That said, we recognise that we do have to enhance the professional skill sets of the public service and we intend to recruit in very focused way those Bahamians with critically-needed professional skills.”

The government has budgeted $4m for the recruitment of collegeeducated graduates to the public service in 2018-2019 as it seeks to fulfill this objective. It is one of several additional spending

initiatives, totalling $19m, that are intended to deliver on the Minnis administration’s election pledges, including over $5m for small business development and $5m for the longpromised Over-the-Hill “economic empowerment zone”.

Mr Turnquest last week blamed this funding, together with $172m required to pay-off unfunded arrears, and a further $76m needed to fully fund known spending commitments, for the jump in recurrent spending in 2018-2019. An $89m increase in debt-servicing interest payments is also included.

But the Bahamas Chamber of Commerce and Employers Confederation (BCCEC), in a May 31 letter to Mr Turnquest, warned that the proposed recurrent spending increase for 2018-2019 was “unsustainable”.

The letter, signed by Michael Maura and Edison Sumner, the Chamber’s chairman and chief executive respectively, warned that The Bahamas “cannot tax ourselves out” of the current fiscal crisis by placing the entire burden on the private sector and consumers.

“While we agree that the state of the government’s fiscal affairs needs to be remedied, we are reminded that successive administrations created this fiscal challenge and we cannot

tax ourselves out of our current situation,” they wrote.

“The increase in government expenditure year-on-year is unsustainable. Specifically, we note that recurrent and capital expenditure is being increased by $555m when compared to the projected expenditure for 2017-2018.

The increase in VAT and other revenue measures are projected to yield $500m in 2018-2019.

“Hence we submit that the additional revenue will be funding the increased spending appetite of the Government of The Bahamas for the new fiscal year.

The Government of The Bahamas needs to identify other opportunities for improving the economy through fiscal prudence and innovation, tax efficiency and equity, and enhanced revenue-generating measures.”

Mr Maura, in a subsequent interview with Tribune Business, warned that the government had little alternative but to initiate forced civil service lay-offs if it was to reduce the burden imposed on the rest of society by an overbloated public sector. It has currently focused on releasing persons when their contracts expire.

“Relying on the budget presentation, you have the expenditure climbing by approximately the same amount as these new taxes are supposed to deliver

to the government,” the Chamber chairman said.

“You have approximately $500m in additional tax revenues, and $500m in additional spending.

“While the government had been discovering unknown arrears, and has to address those additional debts and expenditures as they come up, the business community is saying: ‘We hear you, but what are you doing at the same time to reduce the size of government and make sure the government is more efficient than it is today.

“We agree that the government cannot kick the can down the road, leave our problems for another day, but at the same time there has to be a real appreciation in government of its size and cutting down on its costs apart from cutting down on debt.”

Arguing that the public sector should not be spared the bitter fiscal medicine,

Mr Maura added: “Unfortunately it may mean a methodical reduction in the size of labour. We cannot take the approach, we cannot accept that is the reality and way it’s got to be. Unpleasant as it is, we have to reduce the size of the government workforce.

It has to happen.”

The $172m worth of arrears payments the government plans to pay in 2018-2019 include $17m in departure tax rebates owed to the cruise lines; $11.921m and $10.265m owed to Bahamas Power & Light (BPL) and the Bahamas Telecommunications Company (BTC) respectively; $13.589m for the National Drug Plan; another $13.589m in rent arrears; $10.751m in VAT refunds; $25m for Bank of The Bahamas-related liabilities; and $50.227m for “other outstanding commitments”.

When asked what

happened to the $400m borrowed to pay outstanding commitments from the 2016-2017 fiscal year, Mr Turnquest said the funds were used to cover these arrears and more that were identified over the past 12 months.

He explained that the $360m referred to in the 2018-2019 budget represent “additional arrears and obligations that had not been budgeted before”.

Affirming that the government had sought to address them all “one-time”, the deputy prime minister reiterated: “No more fudging of the Budget.”

To advertise in The Tribune, contact 502-2394

NOTICE

NOTICE is hereby given that CALIS MEUZE of Abaco, Marsh Harbour, Abaco, 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 28th day of May, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

COMMONWEALTH OF THE BAHAMAS IN THE SUPREME COURT Common Law & Equity Division

2017 CLE/qui/000433

NOTICE

The Petition of CHARLENE MOXEY AND JANET PATRICIA FERGUSON (Personal Representative of the Estate of FLORENCE CAMBRIDGE and in her own capacity) in respect of: IN THE MATTER OF ALL THAT piece parcel of lot of land containing by measurement four thousand five hundred and sixty one square feet (4,561.00) and bounded in the NORTH by Cambridge Street and running thereon fifty three and ninety-three hundredths (53.93) feet EAST by property of FLORENCE CAMBRIDGE and running thereon eighty three and fifty-five hundredths (83.55) feet SOUTH by property now or formerly owned by KINGSLEY POITIER and running thereon fifty eight and seventy hundredths (58.70) feet WEST property now or formerly owned

by DAVID SOLOMON and running thereon SEVENTY EIGHT AND SIXTYFIVE HUNDREDTHS (78.65) feet with such position marks shape boundaries and dimensions as are delineated on a plan prepared by SHURN HENRY and is thereon coloured PINK. The Petitioners CHARLENE MOXEY AND JANET PATRICIA FERGUSON (Personal Representative of the Estate of FLORENCE CAMBRIDGE and in her own capacity) claim to the legal and beneficial owners in fee simple in possession of ALL THAT parcel of land hereinbefore described and the Petitioner has made application to the Supreme Court of the Commonwealth of the Bahamas under Section 3 of the Quieting Titles Act, 1959, to have its title to the said land investigated and the nature and extent thereof determined and declared in a Certificate of Title to be granted by the Court in accordance with the provisions of the said Act. Copies of the filed plan may be inspected during normal working hours at:a.

The Registry of the Supreme Court, British American Building, Marlborough and George Streets, Nassau, N. P., Bahamas; or b.

The Chambers of Bowleg McKenzie Associates, RowClem House, #67 Marathon Road, Marathon Estates, New Providence, The Bahamas.

NOTICE IS HEREBY GIVEN that any person having dower or right to dower or any adverse claim or claim not recognized in the Petition shall on or before the expiry of the thirty (30) days after the final publication of these presents, file in the Registry of the Supreme Court and serve on the Petitioners or the undersigned a statement of such claim in the prescribed form and verified by an affidavit to be filed therewith.

Failure of any such person to file and serve a statement of such claim on or before the expiry of the thirty (30) days after the final publication of these presents, will operate as a bar to such claim.

BOWLEG MCKENZIE ASSOCIATES Chambers RowClem House # 67 Marathon Road Marathon Estates, N.P., The Bahamas Attorneys for the Petitioner

PAGE 8, Monday, June 4, 2018

THE TRIBUNE

CHINA WARNS US TRADE DEALS ARE OFF IF TARIFFS GO AHEAD BEIJING Associated Press CHINA said yesterday it wouldn’t step up its purchases of American products if President Donald Trump goes ahead with his threat to tax

billions of dollars’ worth of Chinese imports. White House advisers insisted on fundamental changes in ties between the world’s two biggest economic powers.

China’s warning came after delegations led by US Commerce Secretary Wilbur Ross and China’s

NOTICE International Business Companies Act (No. 46 of 2000)

Eight Exuma Limited Registration Number: 167600 B (In Voluntary Liquidation) Notice is hereby given that in accordance with Section 138 (4) of the International Business Companies Act (No. 46 of 2000) Eight Exuma Limited commenced voluntary liquidation on the 29th day of May, 2018.

Any person having any claim against Eight Exuma Limited is required on or before the 28th day of June, 2018 to send their name, address and particulars of the debt or claim to the Liquidator of the company, or in default thereof they may have excluded from the benefit of any distribution made before such claim is approved.

GSO Corporate Services Ltd., of 303 Shirley Street, Nassau, The Bahamas is the Liquidator of Eight Exuma Ltd. GSO Corporate Services Ltd. Liquidator

top economic official, Vice Premier Liu He, wrapped up a meeting on Beijing’s pledge to narrow its trade surplus. Ross said at the start of the event they had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details.

“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink,” said Eswar Prasad, professor of trade policy at Cornell University. “Despite the potential negative repercussions for both economies, the risk of a full-blown China-US trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly.”

Asked specifically on Fox’s “Sunday Morning Futures” if the US is willing to throw away its relationship with China by proceeding with threatened tariff hikes, Peter Navarro, director of the White House National Trade Council, pointed in part to an unfair relationship involving a multi-billion dollar trade

deficit, Defense Secretary Jim Mattis’ warning of China’s activities in the South China Sea and the threat of China stealing US intellectual property.

“That’s a relationship with China that structurally has to change,” he said.

“We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this.”

The United States has threatened to impose tariffs on up to $50bn of Chinese products in a dispute over Beijing’s aggressive tactics to challenge US technological dominance; Trump has asked US trade rep Robert Lighthizer to look for another $100bn in Chinese products to tax. China has targeted $50bn in US products in retaliation.

Tensions temporarily eased on May 19 after China promised to “significantly increase” its purchases of US farm, energy and other products. Treasury Secretary Steven Mnuchin said then that the US tariffs were suspended and the trade war “on hold”. The purchases are meant to

NOTICE International Business Companies Act (No. 46 of 2000)

GOODSWAY TOTTENHAM LTD. Registration Number: 167878 B Pursuant to the provisions of Section 138 (8) of the International Business Companies Act, 2000 notice is hereby given that GOODSWAY TOTTENHAM LTD. has been dissolved and has been struck off the Register of Companies with effect from the 15th day of May, 2018.

GSO Corporate Services Ltd. Liquidator

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

US Commerce Secretary Wilbur Ross, second from left, and Chinese Vice Premier Liu He, right, arrive to attend a meeting at the Diaoyutai State Guesthouse in Beijing on yesterday. US Commerce Secretary Ross is in Beijing for talks on China’s promise to buy more American goods after Washington ratcheted up tensions with a new threat of tariff hikes on Chinese high-tech exports.

Photo: Andy Wong, Pool/AP reduce America’s massive trade deficit in goods and services with China, which last year came to $337bn, according to the US Commerce Department.

After the apparent cease-fire, global financial markets rallied in relief.

But Trump upended the truce last Tuesday by renewing his threat to impose 25 percent tariffs on $50bn in Chinese high-tech goods.

The tariffs are meant to pressure Beijing for allegedly stealing trade secrets and forcing foreign companies to hand over technology in exchange for access to the Chinese market. Navarro later called Mnuchin’s conciliatory comments “an unfortunate soundbite”.

Ross nonetheless journeyed to Beijing Friday to work out details of the vague agreement Mnuchin had earlier cobbled together with the Chinese vice premier. China balked at making concessions unless the US lifted the tariff threat.

“If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect,” said a Chinese

government statement, carried by the official Xinhua News Agency.

The negotiating process should be “based on the premise” of not fighting a “trade war”, the statement said.

The dispute with China comes at the same time Trump has riled some of America’s closest allies with the imposition of tariffs on steel and aluminum imports.

After a three-day meeting of finance ministers from the G7 industrial nations that ended Saturday in Canada, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of “concern and disappointment” over the US trade actions.

Allies including Canada and the European Union are threatening retaliatory tariffs.

Canadian Prime Minister Justin Trudeau told NBC’s Meet the Press on yesterday that the reciprocal tariffs would hurt both US and Canadian workers and consumers. He also pushed back against the argument that Canadian steel poses a US security threat.

THE TRIBUNE

Monday, June 4, 2018, PAGE 9

US singled out by G7 allies over steel and aluminum tariffs BRITISH COLUMBIA Associated Press THE United States was singled out by some of its closest allies Saturday over the imposition of tariffs that they warn will undermine open trade and weaken confidence in the global economy.

The dispute over US President Donald Trump’s new levies on steel and aluminum imports is driving a wedge in the G7 group of industrial nations.

Following Saturday’s conclusion of a three-day meeting of G7 finance ministers, Canadian Finance Minister Bill Morneau issued a summary saying the other six members want Trump to hear their message of “concern and disappointment” over the US trade actions.

Allies including Canada and the European Union are threatening retaliatory tariffs.

The G7 ministers urged US Treasury Secretary Steven Mnuchin to deliver their message before leaders of the group’s member countries meet next week in Quebec.

Ministers urged the US to

abandon the tariffs ahead of the leaders’ summit before the move causes deeper divisions within the G7.

“The international community is faced with significant economic and security issues, which are best addressed through a united front from G7 countries,” said the summary, which was agreed to by the attending ministers.

“Members continue to make progress on behalf of our citizens, but recognise that this collaboration and cooperation has been put at risk by trade actions against other members,” it added.

Bruno Le Maire, France’s finance and economy minister, was blunt in his assessment of the Whistler meeting, where ministers confronted Mnuchin.

“It has been a tense and tough G7 — I would say it’s been far more a G6 plus one than a G7,” said Le Maire, who called the tariffs unjustified.

“We regret that our common work together at the level of the G7 has been put at risk by the decisions taken by the American administration on trade and

on tariffs,” he said.

Mnuchin disagreed with Le Maire.

“I think there was a comment out there that (this was) the G6 plus one. It was not. ...

We believe in the G7, it’s an important group,” Mnuchin said at his own news conference. “I’m sure that the president looks forward to coming to Canada and meeting all the other leaders with many, many important issues going on throughout the world.”

Morneau, who presided at the ministerial meeting in Whistler, said even though the group found common ground on many subjects, G7 members are now forced to do whatever they can to persuade Trump to withdraw the tariffs.

“They actually are destructive. And that’s consistently held across the six countries that expressed their point of view to Secretary Mnuchin,” Morneau told reporters.

The US president has said the tariffs are needed to protect US steel and aluminum industries vital to the nation’s security.

Morneau has called the

tariffs “absurd”, saying Canadian metal sales are no security risk to the US. He warns the measures will

destroy jobs on both sides of the border.

Le Maire said it is up to the US to take action to

rebuild confidence among G7 members and to avoid any escalation during the leaders’ summit next week.

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