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WEDNESDAY, JUNE 13, 2018
$4.75 Gaming $101m income boost ‘very difficult to replace’ * CONTRACTION RISKY DUE TO GDP, JOBLESS WOES * AND UNDERMINE ‘TECHNOLOGY HUB’ AMBITIONS * CONSULTANT: WILL HURT $15M REAL ESTATE IMPACT By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net WEB shop advisers have warned that the $101m in annual salary income generated by the sector will be “very hard to replace” if the budget’s tax hikes result in mass lay-offs. A June 2018 report by the Oxford Economics consultancy, commissioned by the Bahamas Gaming Operators Association (BGOA), said the government’s plans could undermine its ambitions to develop the country as a “technology hub” and stifle real estate development activity. The consultants, who performed an “economic modelling” of VAT’s likely impact for the Bahamas Chamber of Commerce in 2014, argued that the country’s “persistently slow” economic growth and “stubbornly high” doubledigit unemployment rate meant it was especially risky to introduce taxes that threaten the web shop sector’s present model.
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Web shop patrons face $20m tax bill By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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EB shop taxes will increase by a minimal sum as a result of budget hikes that could extract $20m per annum from Bahamian gaming patrons, new studies suggested yesterday. The Bahamas Gaming Operators Association (BGOA), in its latest salvo against tax increases it views as equivalent to “expropriation” of the industry, unveiled research showing gambling customers will pay a hefty price from the twin five percent levies. The 2018-2019 budget plans to impose this tax on both customer deposits and
* Clients to pay hefty price on 5% levies * Deposit stamp tax ‘unprecedented’ * 40 Island Luck sites already ‘marginal’ over-the-counter (ORTC) lottery sales, targeting patrons directly, with the resulting reduction in gaming activity leaving operator contributions to the Public Treasury virtually unchanged despite the significant turnover-based tax hikes. Christiansen Capital Advisors, in a study commissioned by the Association, predicted that the two five percent levies will suck between $13.3m and $19.9m annually from the pockets of Bahamian gaming patrons. The advisory firm,
describing itself as having worked in 50 states and countries on gaming and wagering, branded the five percent stamp tax on gaming deposits as “unprecedented” and “unique” - something it had never encountered before. Referring to the five percent stamp tax as a levy on “drop” or player bankroll, Christiansen said the Bahamian web shop industry’s “three to one” ratio of customer deposits to losses in 2017 implied a 15 percent increase in patron costs.
“It is likely, however, that consumer behaviour will change somewhat in the face of this tax,” the Christiansen report said. “Today, customers can withdraw and reload their accounts at no additional cost. If this tax goes into effect, Bahamians will withdraw and deposit from their accounts less frequently. “In other words, consumers are now disincentivised to withdraw from their accounts and reload the next time they come in. The extent to which
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NATARIO MCKENZIE Tribune Business Reporter nmckenzie@tribunemedia.net
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The Minister, who has responsibility for gaming regulation, told Tribune Business that web shop proprietors had enjoyed “many years of feast off the backs of the Bahamian people” while avoiding any sanction for operating illegal businesses prior to the industry’s 2014 “legalisation”. He suggested that the sharp taxation increase was no justification for threatening to lay-off to 2,000
Super Value chief: Abandon all exemptions for 10% VAT * OTHERWISE CHAIN’S TAX INTAKE HALVES * URGES THREE-MONTH PRICING TRANSITION * AND PUSHES FOR VAT EXCLUSIVE PRICES By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
workers and close 192 web shop locations, pointing out that “legalisation” had created a much more significant consolidation through the reduction from 635 sites. Mr D’Aguilar also argued that the domestic gaming industry’s response to the 2018-2019 budget was “counterproductive”, provoking the government to harden its stance against
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* Minister urges: reveal your figures * Sector’s wealth ‘off backs of Bahamians’ * ‘Vitriolic’ response counter-productive
WEB shop operators may have to endure “a year of famine” to find the industry’s taxation “sweet spot”, a Cabinet Minister yesterday urging: “Let the Bahamian people be the judge.” Dionisio D’Aguilar, minister of tourism and aviation, called on the seven licensed web shop chains to publicly disclose their financial statements so persons can accurately judge whether the government’s proposed DIONISIO new tax structure is too D’AGUILAR harsh.
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SUPER Value’s principal yesterday argued that a ten percent VAT could achieve the government’s fiscal goals if it abandons its multiple tax exemptions. Rupert Roberts, pictured, told Tribune Business that the Minnis administration should “claw back” the millions of dollars in VAT revenues it will forego on the likes of “bread basket” items and utility bills rather than increase the tax rate by 60 percent. Pointing out that the budget will likely increase “breadbasket” goods as a percentage of Super Value’s inventory to 50 percent, Mr Roberts said this would result in the supermarket chain “collecting half the tax we do now”. The Super Value chief said the government’s plan will result in a “tax break” for the rich, and he urged it
Web shops face ‘year of famine’ on ‘sweet spot’
Winning landfill bid chosen by June 25 THE government plans to select the winning bidder for the New Providence landfill management contract by June 25, a Cabinet minister said yesterday. Romauld Ferriera, pictured, minister of the environment and housing,
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