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business@tribunemedia.net

WEDNESDAY, JUNE 20, 2018

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Back-toschool fear on duty waiver delay * CLOTHING, SHOE ELIMINATION SET FOR AUGUST 1 * CHAMBER CHIEF: ‘BRING IT FORWARD A MONTH’ * DENIES RETAILERS BENEFIT FOR KEY SEASON By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE government was yesterday urged to boost Back-to-School retailers by moving duty-free exemptions forward one month to a July 1 implementation. Edison Sumner, the Bahamas Chamber of Commerce’s chief executive, told Tribune Business that the date change was critical to enable uniform and footwear suppliers to enjoy the planned customs duty exemptions on footwear and clothing imports

SEE PAGE 4

Govt warned: Don’t hike taxes again before 2021 * ‘MORE TIME’ REQUIRED FOR VAT TRANSITION * NO GUIDANCE NOTES, BUT 8 WORKING DAYS LEFT * IMPACT ANALYSIS ABSENCE CAUSES CONCERN

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE government was yesterday warned off any further tax hikes before 2021, amid continuing private sector concerns it has allowed too little time to adjust to 12 percent VAT. Edison Sumner, pictured,

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Bahamas’ disaster costs face 28% cut By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

HE Bahamas will cut its disaster recovery costs by 28 percent it takes out its $100m “contingent loan” facility, the Inter-American Development Bank (IDB) is asserting. The IDB, in its proposal for the emergency financing, argued that its facility would amount to 72 percent of the costs incurred by the government in seeking bank loans or issuing debt in the aftermath of a catastrophe. It said the savings would hold true even if the government has to fully draw down on the $100m facility, but warned that the funding will only be made available if The Bahamas implements an adequate Comprehensive Natural Disaster Risk Management Programme (CDRMP).

* IDB touts $100m facility benefits * Will reduce storm recovery’s fiscal burden * ‘Once in 100 years’ event to wipe $1bn

The IDB document, released yesterday, said unidentified “progress indicators” had been agreed with the government for the implementation of such a programme, as it warned that a “once in 100 years” hurricane could wipe out 8.5 percent of GDP - or close to $1bn in economic output - should it strike The Bahamas’ major population centres. Touting the cost advantages of its $100m facility, the IDB said: “The Net Present Value (NPV) of the cost of financing the IDB loan was compared to the NPV of the cost of issuing bonds. “Both NPVs were calculated using a discount rate of 12 percent. The results

show that the contingent loan granted by the bank is 72 percent of the cost of issuing debt, which makes it a much more efficient option not only in terms of financial cost but also in terms of how quickly the resources are made available.” Some observers may view the IDB’s analysis as self-serving, but The Bahamas’ strained fiscal position means the government can ill-afford the need to put in place disaster recovery financing mechanisms well ahead of a major hurricane strike. And it took several weeks for the Central Bank and a consortium of local commercial banks to put together a $150m

emergency facility to finance disaster relief and essential infrastructure repairs in Hurricane Matthew’s wake in 2016, with that storm inflicting $519m in damage and losses - equivalent to 6.75 percent of GDP. Hurricanes Joaquin and Irma added $114m and $118m in damages and loss, respectively, in 2015 and 2017, and the IDB warned that the hurricane threat to The Bahamas is only likely to increase. “These trends are likely to worsen as a result of climate change,” it said. “With most of its territory a few metres above mean sea level, The Bahamas is highly

THE Asure Win web shop yesterday blamed the budget’s tax hikes for the closure of 11 sites, and termination of 50 staff, by end-June amid warnings the sector is not “hyperprofitable”. The domestic gaming operator, in a statement issued yesterday, said the 82 percent increase in its tax rate had forced it to take “a sobering review” of its operations to eliminate locations that are either marginal or “underperforming”. Asure Win added that it had yesterday informed the Gaming Board, the industry regulator, of its “intention to close 11 locations nationwide at the end of June” as its increased tax burden forces it to “make some fundamental business decisions concerning the future sustainability of our operations”. Pointing out that the closures’ impact will extend beyond its staff, the web shop chain added: “It is anticipated that these closures will result in the termination of approximately 50 employees, as well as the termination of property leases which facilitate these locations. “The domestic gaming

on a review of its business by unnamed “external auditors”, who will conduct an analysis of the increased taxation’s likely impact on its model. “Once those assessments have been completed, the results will dictate any further action,” the web shop warned. Asure Win’s move is likely to be seized upon by the wider domestic gaming

* BILL REVERTS TO ORIGINAL VAT ‘EXEMPT’ POSITION * MEDICINES TAX BREAK ONLY ARRIVES AUGUST 1 * TRANSITION GUIDANCE KEY TO ‘AVOID CHAOS’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

industry and the government’s political opponents that the sector’s worst fears in relation to the budget tax hikes are already coming true within 24 hours of the 2018-2019 budget’s passage. A consultant’s report previously commissioned by the Bahamas Gaming Operators Association (BGOA), the industry body, previously

SEE PAGE 4

SEE PAGE 7

SEE PAGE 6

* To close 11 ‘underperforming’ web shops * Warns of more job cuts from ‘sobering review’ * Consultants: ‘Hyperprofitability’ misperception industry is a competitive market with high operating costs. In some instances, these locations identified were already underperforming. With the proposed tax increases in the 2018-2019 budget, a sobering review of our operational costs and structure led us to take this preemptive action.” Asure Win warned that further closures and job losses may follow depending

BIA chair: late revision shows ‘untidy’ budget process

THE Bahamas Insurance Association’s (BIA) chairman yesterday branded the budget process “untidy” following the government’s last-minute reversion to its original VAT “exempt” position. Emmanuel Komolafe told Tribune Business that, following talks with the Ministry of Finance’s financial secretary and Department of Inland Revenue (DIR), the industry found that only “owneroccupied dwellings” will be treated as “exempt” for VAT purposes. This marks a return to the position laid out in the deputy prime minister’s original budget communication, but represents a major change from the draft VAT Amendment Bill that showed up to 85 percent of property and casualty product lines - including motor, aviation, transportation and liability coverage, as well as residential property - was to be treated as VAT “exempt” from July 1. Mr Komolafe revealed

Asure Win blames budget tax hikes for terminating 50 By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

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THE TRIBUNE

REGULATORS EXPLORING REGIME FOR BLOCKCHAIN

BAHAMIAN financial regulators are exploring the creation of appropriate regulatory regimes for the emerging blockchain technology and cryptocurrency sectors. Their efforts come as The Bahamas hosts industry leaders, financiers, block signers and miners at the inaugural three-day Bahamas Blockchain and

Cryptocurrency Conference (BBCC) conference, which begins today in Freeport. “The industry of cryptocurrency and crypto-assets is an ever-changing environment,” said Christina Rolle, the Securities Commission’s executive director. “What was true of the industry five years ago, and even one year ago, has

shifted and changed, and therefore it is important that we create the kind of environment that is also adaptable”. Blockchain technology, and its various applications, has generated significant interest from the Bahamian business community. The government is working closely with regulators and private

sector partners to position The Bahamas, and especially Grand Bahama, as a leader in the sector. This week’s conference will provide an insight into the regulatory framework The Bahamas has established for cryptocurrencies, initial coin offerings (ICOs) and exchanges. Overseas executives scheduled to speak in

Freeport include Manie Eagar, executive chairman of Quantex Digital Asset Exchange Bank. He is also the founder and chair of the Blockchain Association of Canada and the BC Blockchain Forum; director of the BC Blockchain Ecosystem Consortium; and has a career history in banking (Barclays), telecommunications (Vodafone

& Dimension Data), and investment management (J&J Group/Old Mutual). Joining Mr Eagar will be Anthony Di Iorio, chief executive of Decentral, who will speak on “decentralised technologies”. He has helped lead the charge on blockchainfocused software and development for the past six years.

CULINARY TEAM READIES FOR CARIBBEAN CONTEST DINNER guests gathered at Baha Mar to savour offerings by the Bahamas National Culinary Team, who are preparing to compete at the upcoming “Taste of the Caribbean” competition. The Bahamas Hotel and Tourism Association hosted the annual event to build support for the team ahead of the June 22-26 competition, and provide guests with a “taste of things to come”. The 2018 team features team administrator, Charlotte Knowles-Thompson; team manager, Mario Adderley; team captain, Owen Bain; senior members Kevyn Pratt, Jamal Small, Celeste Smith, Carvison Pratt and Tamar Rahming; along with junior chef Hazen Rolle; apprentices Ryan McIntosh and Donovan Moss; and mixologists, Derrick Blackmon and Chavano Jones. Chef Devin Johnson serves as lead consultant to the team, along with Emmanuel Gibson, Angel Betancourt and Sally Gaskins.

NATIONAL Culinary Team members are pictured with Carlton Russell, president of the BHTA; Robert Sands, executive committee member, Bahamas Hotel and Tourism Association (BHTA); foundational platinum sponsors; David Burrows, Cable Bahamas; Joy Jibrilu, director-general, Ministry of Tourism; and Ellison “Tommy” Thompson, deputy director-general, Ministry of Tourism. The Bahamian team will compete against Belize and Barbados, who took home the coveted Gold Medal for Caribbean National Team of the year in 2017, Bonaire, Cayman Islands, Curacao, Jamaica, St Lucia, Suriname,Trinidad and Tobago and Turks and Caicos. They have been preparing for the

competition since late December 2017. Carlton Russell, president of the Bahamas Hotel and Tourism Association (BHTA), recognised the importance of collaboration and stakeholder engagement to attain common goals. When addressing attendees at the event, Mr Russell told

guests, sponsors and partners: “It takes a village to accomplish what we seek to achieve.” The National Culinary Team’s participation is being supported by the Ministry of Tourism, Atlantis, Baha Mar, Cable Bahamas, Aliv, British Colonial Hilton, Carriearl Boutique, Berry

Islands, Sandals Emerald Bay, Sandals Royal Bahamian, Lyford Cay Club, Comfort Suites, Nassau Paradise Island Promotion Board, Bahamas Out Islands Promotion Board, Association of Bahamas Marinas, Bahamas Food Services, Bahamian Brewery, Ardastra Gardens & Zoo, Cheryl’s Taxi & Tours,

Deirdre Clarke-Maycock

Majestic Tours, Liquid Courage, University of the Bahamas, Coventry Realty (Heron Cove), Bahamasair, Commonwealth Brewery, Fusion Superplex, Cassava Grille, Manuelo Lettuce Eat, New Oriental Cleaners, Cacique Judges, Bahamas Culinary Association and Wildflowers Event and Occasions.

THE TRIBUNE

Wednesday, June 20, 2018, PAGE 3

‘Blacklist’ threat highlights builder self-regulation need By NATARIO MCKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net The BAHAMIAN Contractors Association’s (BCA) president yesterday accused the government of effectively assuming the role of the industry’s self-regulatory Board in threatening to “blacklist” companies over incomplete work. Leonard Sands hit out after Dr Hubert Minnis told Parliament on Monday that contractors who received money to work on government homes in

Spring City, Abaco, but never completed the work, will be blacklisted by the Ministry of Public Works and their names given to the Ministry of Legal Affairs in a bid to reclaim those funds. The prime minister alleged that some contractors received as much as $100,000 for work that was never completed. But Mr Sands told Tribune Business: “That statement was a bit of disappointment for me because the BCA knows full well that with the enforcement

of the Contractors Act, the Board would be allowed to do the same thing the prime minister is talking about. “You could remove someone’s license, suspend their license for a period, six months to a year maybe. The legislation which has been passed allowed for the effective management of the construction industry by the Construction Contractors Board so it would no longer require politicians or the prime minister to say what they will do and get involved with it.”

Mr Sands added: “They need to allow the board to run the industry. The board is to be made up of industry professions. It takes all the headache from the government. If you have a situation like that occur the board would meet, review all the facts, render a decision and say based on these existing offenses against the Act your license is being suspended. You can’t practice construction without a license.” The Contractors Act 2016 provides for the establish-

ment of a Construction Contractors Board that will be responsible for registering and licensing contractors. The board’s job is to carry out the objectives of the legislation and enforce the Act. “The Act is passed, but until the Mister of Public Works appoints the Contractors Board, the Act cannot be enforced. We

again would plead with the Minister of Public Works to please make haste and appoint the Contractors Board so that we could finally manage the construction industry for the best results of all Bahamians,” Mr Sands said.

Contributory civil service pensions ‘good first step’ THE government’s decision to make civil service pensions “contributory” for new hires was yesterday branded “a good step”, although it will do little to address its unfunded multi-billion dollar liabilities. Robert Myers, the Organisation for Responsible Governance’s (ORG) principal, told Tribune Business: “It’s a good step, but the 50,000 pound gorilla is the existing pension liabilities. That has to be addressed. The new hires aren’t going to affect the big numbers. That contingent liability

is somewhere around $2bn and that has to be addressed. “The problem is not the new hires; it’s the significant number of existing hires; civil servants with no cap on their pension liability and no contribution. That is just unsustainable. The reality of the matter is the when it comes time to pay the money won’t be there anyway.” The prime minister, during his 2018/2019 budget address on Monday, said: “I wish to announce a necessary step in terms of public pension reform. In keeping

ROBERT MYERS

North Korea’s Kim thanks China for support with Trump summit BEIJING Associated Press NORTH Korean leader Kim Jong Un thanked Chinese President Xi Jinping for his support in last week’s groundbreaking summit with President Donald Trump, the North’s official media reported today.

Kim is in Beijing on his third visit to China this year, underscoring the major improvement in relations between the communist neighbors. A report by the Korean Central News Agency said Kim expressed his gratitude to Xi in a meeting on yesterday, during which Xi

“gave high appreciation and extended heartfelt congratulations” to Kim over the summit. KCNA said that during a banquet hosted by Xi, Kim also said Pyongyang and Beijing are seeing their ties develop into “unprecedentedly special relations.”

with the practice of many countries, civil servants’ pensions will be contributory for new hires. Commencement date to be announced soon. This reform is also necessary in order to begin to seriously address a large pension shortfall.” The Bahamas Public Services Union’s (BPSU) president, Kingsley Ferguson, told Tribune Business: “If it’s to affect the new employees that’s fine if they contribute to their pensions. They would be the ones to determine what they receive at the end of the day. As long

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

as it is not going to have an impact on existing employees it’s not a major concern for us. Still, those new hires, depending on what their earnings are, will feel the impact.” The government’s unfunded public sector pension liabilities are projected to hit $3.7bn by 2030 unless corrective action is taken to protect Bahamian taxpayers from this unsustainable fiscal burden. KP Turnquest, deputy prime minister, previously told Tribune Business that pension reform is among the government’s mediumterm fiscal goals.

2017 CLE/GEN/00278

IN THE MATTER of an Indenture of Mortgage made the 25th day of November, A.D. 2008 between Darren Darling and Shemeka Darling and Royal Bank of Canada AND IN THE MATTER of The Mortgages Act, Chapter 156 of the Revised Laws of the Commonwealth of The Bahamas BETWEEN RBC ROYAL BANK (BAHAMAS) LIMITED (formerly “Royal Bank of Canada”) Plaintiff

AND DARREN DARLING

The Winterbotham Trust Company Limited

and

Winterbotham Place – P.O. Box N-3026 – Marlborough & Queen Streets Nassau – The Bahamas Tel: (1-242) 356-5454 – Fax: (1-242) 356-9432 E-mail: nassau@winterbotham.com – Website: www.winterbotham.com

JOB OPPORTUNITY JOB OPPORTUNITY

The Winterbotham Trust Company Limited is looking to fill the position of a Client Accounting Unit Manager Winterbotham Trust Company Limited is looking to fill the position of a Client Accounting Unit nager Main Function: Specializing in both trust and corporate accounting and preparation of financial statements. Review transactions recorded in the books and FS to be sent n Function: Specializing in both trust and corporate accounting and preparation of financial statements. to clients. Verify that supporting documents of the transactions are duly filed.

ew transactions recorded in the books and FS to be sent to clients. Verify that supporting documents of ransactions are duly filed.

In this challenging position you will be responsible for but not limited to the

is challenging position following tasks:you will be responsible for but not limited to the following tasks:

Fully responsible for the accounting for a portfolio of trusts and companies in multiple jurisdictions; • Fully for the accounting for a portfolio of trusts and companies in multiple jurisdictions; • responsible Responsible for providing excellent and flexible service support to local • Responsible for providing excellent and flexible service support to local and international clients; and international clients; • Responsible for supervision and review of work of junior accountants in Nassau office, leading the team • providing Responsible for supervision and review of work of junior accountants in and support for prioritization of tasks. Nassau the team and providing support for prioritization of • Able to review work office, of Hongleading Kong Accounting Manager if required • Responsibletasks. for/able to perform full suite of accounting services such as preparation of payments, journal entries, management accounts; • Able to review work of Hong Kong Accounting Manager if required • Full responsibility for drafting annual financial statements and related disclosures in accordance to • Responsible for/able to perform full suite of accounting services such as appropriate reporting standards and co-ordination with auditors; preparation of payments, journal entries, management accounts; • Filing of annual financial statements and liaising with the relevant authorities when required. • Full responsibility for drafting annual financial statements and related disclosures in accordance to appropriate reporting standards and coordination with auditors; • Filing of annual financial statements and liaising with the relevant successful applicant must have the following qualifications: authorities when required.

• • • • •

LEONARD SANDS

•

Experienced in corporate and trust accounting; ideally also experienced in private equity and real estate; Qualified CPA or equivalent (eg ACA, ACCA); The successful applicant must have the following qualifications: Fluent in spoken and written English; Team ability to achieve several objectives in a dynamic environment • work-focused, Experienced in corporate and trust accounting; ideally also experienced in Minimum ofprivate equity and real estate; 5 years’ relevant work experience.

• • •

•

Qualified CPA or equivalent (eg ACA, ACCA); Fluent in spoken and written English; Team work-focused, ability to achieve several objectives in a dynamic Applications/resume should be sent by e-mail to pgoudie@winterbotham.com & environment vmachado@winterbotham.com Minimum of 5 years’ relevant work experience. Under reference “Client Accounting Unit Manager,” ABSOLUTELY NO TELEPHONE INQUIRIES WILL BE ACCEPTED

Persons not meeting the above requirements need not apply Deadline for applications Wednesday, June 27, 2018 Applications/resume should be sent by e-mail to

pgoudie@winterbotham.com & vmachado@winterbotham.com Under reference “Client Accounting Unit Manager,” ABSOLUTELY NO TELEPHONE INQUIRIES WILL BE ACCEPTED Persons not meeting the above requirements need not apply Deadline for applications Wednesday, June 27, 2018

SHEMEKA DARLING TO:

First Defendant

Second Defendant

Darren Darling Shemeka Darling

TAKE NOTICE that an action has been commenced against you in the Supreme Court of the Commonwealth of The Bahamas by RBC Royal Bank (Bahamas) Limited (formerly “Royal Bank of Canada”), Nassau, New Providence, Bahamas, in which the Plaintiff’s claim is set out in the Originating Summons filed in this action on the 7th day of March, A.D. 2017 seeking an Order to direct you to deliver up possession of Mortgaged Property situate at ALL THAT piece parcel or lot of land on the Island of Great Exuma one of the Islands of the Commonwealth of The Bahamas and situate near and in the vicinity of the Settlement of George Town which said piece parcel or lot of land has such position shape boundaries marks and dimensions as are delineated on the plan attached to an Indenture of Conveyance dated the 8th day of January, A.D. 1971 made between Bahamas Acres Limited of the one part and Carl-Gustaf Knut Cederlund and Monica Cederlund of the other part and recorded in the Registry of Records in the City of Nassau on the Island of New Providence another of the Islands of the Commonwealth of The Bahamas in Volume 1753 at pages 337 to 343 and which said piece parcel or lot of land are Numbered Nine Thousand Nine Hundred and Seventy-eight (9978) in the Subdivision called and known as “Bahama Sound of Exuma Number Nine (9)” and is thereon coloured PINK to the Plaintiff, within Twenty-Eight (28) days of the order and judgment for the sums outstanding under the Indenture of Mortgage dated the 25th day of November, A.D. 2008 AND THAT it has been ordered that service of notice of all further process issued herein including the Notice of Appointment filed on the 28th day of June, A.D. 2017, Affidavit in Support filed on the 3rd day of August, A.D. 2017, and a sealed copy of the Order dated the 23rd day of August, A.D. 2017 be effected on you by way of this advertisement. The Originating Summons will be heard before the Honourable Mr. Justice Gregory Hilton, Judge of the Supreme Court, at The Swift Justice Building, Bank Lane, Nassau, Bahamas on Wednesday, the 15th day of August, A.D. 2018 at 9:30 o’ clock in the forenoon, on which day you are to appear, and if you do not appear either in person or by your Attorney at the time and place abovementioned, such Order will be made as the court thinks just. A copy of the said Originating Summons, Notice of Appointment to Hear the Originating Summons, Affidavit in Support and Order may be obtained from the Supreme Court Registry, Judicial Complex, East Street North, Nassau, Bahamas, or from the Attorneys of the Plaintiff below mentioned. Dated the 20th day of June, A.D. 2018 HIGGS & JOHNSON Ocean Centre Montagu Foreshore East Bay Street Nassau, New Providence, The Bahamas Attorneys for the Plaintiff

PAGE 4, Wednesday, June 20, 2018

THE TRIBUNE

Asure Win blames budget tax hikes for terminating 50

Back-to-school fear on duty waiver delay

FROM PAGE ONE

forecast that around 2,000 jobs and 192 web shop locations would be lost if the Minnis administration went through with tax hikes it branded as “expropriation” and an attempt to seize control of the sector under the guise of taxation. Should that forecast come true, the web shop industry will lose around three-quarters of its jobs and locations based on BGOA figures. Gershan Major, the Association’s chief executive, yesterday said each of the seven licensed operators will be forced to make hard decisions concerning their business models as a result of the tax hike. “Each licensee will have to look at their own operations and make some fundamental business decisions concerning the future sustainability of their individual operations as a result of the proposed tax increase,” he told Tribune Business, parroting Asure Win’s line. Dionisio D’Aguilar, minister of tourism and aviation, did not return Tribune Business’s calls and messages seeking comment before press deadline last night. However, he is likely to argue that the Asure Win closures were inevitable even before the budget’s tax increases, as technology and competition were already driving industry consolidation. “There are three of the seven gaming houses that are either too small or have been increasingly losing market share over the past three years that, unless something dramatic occurs, I expect them to

begin to close locations,” Mr D’Aguilar said in his budget communication last week, although he did not name them. “So, when it happens, Mr Speaker, I do not want the people to cry shame on the government. With the advent of technology and the building of bigger and more splendid locations, the smaller players in the market are slowly losing market share. “Mr Speaker, I expect that, in a few years, the number of locations will be significantly less than they are now as the number houses move more of their business online. Players will be able to sit at home, log on, transfer cash from their bank account into their gaming accounts, game and transfer money back from their gaming account into their bank account. Remember that just four to five years ago there were 635 locations, and now there are 363. That downward trend is expected to continue.” Mr D’Aguilar suggested that the seven licensed web shop chains, earning a collective $50m in annual profits, have deep enough pockets to withstand the tax increase. And the divisive issue of web shop gaming is likely to be highlighted by the government’s supporters, and industry’s opponents, arguing that the Asure closures are nothing more than “good riddance”. But the web shop industry’s consultants, Christiansen Capital Advisors, emphatically rejected as untrue perceptions that the Bahamian gaming industry is massively profitable despite an earnings before interest, depreciation, taxation and amortisation

Deirdre Clarke-Maycock

(EBITDA) margin of 26 percent. The consultancy, which has focused on gaming and wagering in 50 different markets, said found in a June 11, 2018 study that Bahamian web shops paid out 59 cents of every $1 dollar earned in staff payroll, marketing and operational expenses costs. The remainder was taken up by existing government taxes, fees and charitable contributions. “There are two misconceptions regarding gambling businesses,” the Christiansen study, commissioned by the BGOA, said. “The first is that they are hyperprofitable compared to other businesses and can shoulder any tax imposed on them. The second is that demand for gambling is price inelastic. Neither is supported by evidence or the academic research. “The bulk of gaming revenues are used to pay the salaries of Bahamian workers and support the profitable operation of other Bahamian businesses. Another significant portion goes to government in the form of taxes and fees, and for charitable causes. “Gambling operators earn approximately 26 cents of every dollar, which is a respectable margin, but not extraordinary, and a world away from hyperprofitability.” The report also warned that the likely first reaction of Bahamian web shop operators to any tax increases would be to cut costs through closing marginal or unprofitable locations, resulting in significant job losses. “The combined impact of declining revenues and a higher tax rate will

undoubtedly lead to downsizing and the closing of marginally performing locations,” the Christiansen study warned. “In a first quarter 2018 performance review, the largest operator of gaming houses, Island Luck, identified 14 marginal performing locations and 26 marginally performing franchisees representing estimated gross gaming revenue of approximately $37.3m, or 35 percent of gross gaming revenues. “If these new tax rates go into effect, these identified locations will almost certainly be forced to close, and as this review was conducted before these new taxes were proposed, there could be more locations forced to close as well,” Christiansen added. “Island Luck had 54 store locations and 62 franchisees in 2017. Thus, these marginal operations constitute approximately 26 percent of Island Luck’s stores, and 48 percent of its franchisees. “If we assume that other operators on the island have a similar ratio of poor performing locations and franchisees, that means that these new taxes will likely lead to the loss of 69 stores and 711 employees at 10.3 employees per store, and $13.5m in wages and indirect employment of 114 indirect jobs and between $2.1m in wages.” Pierre Dupuch, the former Cabinet minister and MP, yesterday expressed concern that the government was seemingly “targeting” the web shop industry for taxation - a move that set a dangerous precedent. “The amount of money the institution makes is irrelevant, so long as it is legal. So to pick out any

institution which it licenses to ‘stick it to them’ is wrong and leads to instability,” he warned in a statement. “It sets a serious precedent. If you make money, and the government decides to single you out to tax you, it is unacceptable. It may look good to some but it sets a serious and dangerous precedent. Every time the government passes a law a precedent is created.” Mr Dupuch also hit out at the taxation for being discriminatory, adding: “What the precedent says is that anybody who the government perceives to be rich can be selected. They didn’t say the gambling industry because that would include the foreign-owned gambling casinos. Instead, they singled out Bahamian-owned gambling operations. “Isn’t that interesting? To the foreign-owned gambling operations they say ‘yes sir, boss’, and to the locally owned gambling operations they say ‘let’s stick it to them’. If they can do it to gambling they can do it to the grocery store or anybody else. In an alreadyfragile economy this is a scary proposition. “For example, if an investor sees an opportunity to invest under a certain tax regime in The Bahamas, and invests accordingly based on the tax regime, only to find that the government changes it midstream, the investor could lose their investment and therefore would not invest in new businesses. I know of what I speak. It happened to me. Uncertainty, is the biggest problem to get Bahamians to invest. We make all kinds of concessions to foreign institutions, but no concessions to Bahamians.”

Deirdre Clarke-Maycock

prior to the Back-to-School season’s start. He revealed that the duty waiver, which will apply to licensed clothing and footwear vendors, is currently scheduled to take effect from August 1 - a date after which most Back-to-School inventory will have been imported if it is not sourced locally. This threatens to deny Bahamian retailers the potential benefits from a 25 percent duty elimination in time for a season which, alongside Christmas, ranks as their busiest period of the year. And they will also have to contend with paying the existing duty rates, plus the increased 12 percent VAT, for one month, further impairing their competitiveness against online rivals and merchants in South Florida. “We’re now coming upon the summer holidays, and people will be preparing for school even though it is two months away,” Mr Sumner told Tribune Business. “Those merchants in the business of selling school supplies, particularly those selling uniforms, we want to be sure they are in position to take advantage of the Customs reduction in clothing and shoes to bring in supplies entirely duty-free.” Confirming that the government currently plans to delay this exemption’s implementation by one month to August 1, Mr Sumner said the Chamber was advocating on behalf of these retailers for that date to “move up to July 1”.

SEE PAGE 7

THE TRIBUNE

Govt warned: don’t hike taxes again before 2021

FROM PAGE ONE

the Bahamas Chamber of Commerce’s chief executive, told Tribune Business that no further tax increases were anticipated “any time soon” given the scale of the fiscal “medicine” contained in the 2018-2019 budget. He added that “some offset”, through a reduction in other levies, would be sought if the Minnis administration decided to implement new or further increases within the next three years - especially given its budget assertion that the 60 percent VAT rate jump, and other revenue measures, will be sufficient to deliver a “balanced budget” by 2021. And Mr Sumner said the private sector “thought more time would have been given” to businesses in adjusting their systems and pricing to the new VAT rate and its multiple exemptions. While the budget communication effectively gave 31 days’ notice, the Ministry of Finance and Department of Inland Revenue have yet to formally release the “guidance notes” that detail the VAT transition process with just eight “working days” to go before the 12 percent rate’s implementation. Calling on VAT registrants to ensure compliance with the new fiscal measures, Mr Sumner said: “We’ll have to adjust to 12 percent, although we don’t like it. “We don’t expect any further increase in the VAT rate any time soon. The

government announced it [12 percent] will take them through to a balanced budget within the next three years. We think it’s an aggressive timeline, and do not expect them to come back to The Bahamas any time soon to talk about increasing the tax rate.” That, though, will likely depend on whether the government hits its revenue and fiscal consolidation targets, given that it will be mandated by the Fiscal Responsibility Bill - legislation it plans to enact this summer - to hit a GFS deficit equivalent to 0.5 percent of GDP (around $50m) by 2020-2021. The upcoming fiscal year’s deficit is projected at $237m. Should new or increased taxes be proposed, Mr Sumner said there would “have to be some offset” to ensure Bahamian businesses and consumers were not over-burdened by the government’s revenue demands. He suggested any “offset” would involve a reduction in one or more other taxes, noting that Bahamians already face a combination of VAT, customs and excise taxes, business licence fees, real property taxes and a host of other levies and fees. The Chamber chief executive reiterated that there needs “to be a comprehensive review of the tax structure”, which the government has engaged Deloitte & Touche’s UK arm to undertake as part of preparations for the World Trade Organisation (WTO) accession and elimination/

Deirdre Clarke-Maycock

reduction of many import tariffs. A corporate tax, possibly on income, is among the options being analysed. Mr Sumner, meanwhile, said “the same concern with the VAT issue” applied to the narrow timeline granted to the private sector to adjust Point of Sale and inventory systems, and pricing, by the July 1 implementation deadline. “You gave an announcement and gave us 30 days to comply,” he added of the government. “Now the budget has been passed the guidance notes have to be published, and you’re giving the business community less than two weeks to adjust to these new rules. “We thought more time would have been given, but in the time left we’re hoping the government will employ some very aggressive strategies to ensure the business sector full understands, and is given answers from, the guidance notes.” Marlon Johnson, the Ministry of Finance’s acting financial secretary, previously pledged that the VAT guidance notes will be released this week, with Mr Sumner warning that this was now “extremely important” to ensure a smooth transition. “The more time people have to digest these guidance notes and information, especially those that have a direct impact on their business, the better,” he told Tribune Business. “It gives the business community more time to plan, adapt and adjust.” Mr Sumner said private

Wednesday, June 20, 2018, PAGE 5 sector feedback suggested “that the timeline is very tight” to be ready for July 1, especially for large retailers and merchants who have to adjust the pricing and labelling for thousands of items in just a few weeks. While the business community had been “holding out hope” there would be an adjustment to both the magnitude of the VAT increase and implementation date, the budget’s passage with no changes showed the government wanted “to move the

system ahead quickly and raise the revenue it so desperately needs”. Mr Sumner said private sector concerns over the 12 per cent VAT hike had been exacerbated by the government’s non-disclosure to-date of any economic analysis, or modelling, that forecasts the impact it will have on GDP growth and the wider economy. The Chamber is seeking to contract Oxford Economics, the consultants it hired to model the impact of a 7.5 percent VAT prior

Deirdre Clarke-Maycock

to the tax’s initial introduction in 2015, to conduct a similar study on the rate increase. Mr Sumner, though, acknowledged that the findings of such a study will be too late to influence the government’s 2018-2019 fiscal plans, and the best the Chamber can hope for is to effect change in the following budget year. “We are still very disappointed that the 12 percent did pass,” he told Tribune

SEE PAGE 6

PAGE 6, Wednesday, June 20, 2018

THE TRIBUNE

Govt warned...

Bahamas’ disaster costs face 28% cut

Business. “And we’re disappointed they haven’t been able to move the date for implementation. We are happy with other things in the budget, but the VAT is one of the vexing issues for us. “The main contention is the VAT increase to 12 percent without private sector involvement and engagement, and we’ve not seen any analysis done by the government and its consultants with regard to the effect of the rate increase and no movement of the date of implementation. “We hope that once we’re complete with our studies it will have some impact on the budget that follows, perhaps in the 2019-2020 Budget year. We’ll be happy to share those results with the government.”

FROM PAGE ONE

FROM PAGE FIVE

vulnerable to sea level rise and storm surge associated with increasing intensity of extreme weather events due to the impacts of climate change. “Likely impacts include coastal flooding and erosion, mangrove retreat, decreased seagrass bed productivity, and saltwater intrusion into existing small lenses of fresh groundwater. A study conducted by the IDB indicates that the probable flood exposed area in Nassau will expand eight percent by 2050 due to the increasing precipitation caused by climate change.” The IDB report added that female-headed households, of which The Bahamas has many, are at “a clear disadvantage during a

disaster event”, and pointed to the growing threat to the economy. “The potential impacts of natural hazards and climate change on the natural resource base that supports tourism are a serious concern for future environmental, economic, and social sustainability in The Bahamas,” it warned. “Historically, The Bahamas has relied on the accumulation of debt to absorb the cost of recovery, contributing to the rise of public debt. The central government debt-to-GDP ratio increased to 67.8 percent at the end of 2017. The fiscal deficit is estimated to have reached 5.7 percent of GDP for 2017, up from 3.5 percent of GDP in 2016, due to post-hurricane clean-up and reconstruction spending,

NOTICE

temporary tax reliefs, and disruptions in revenue collection, among others. “Furthermore, reconstruction activities depend heavily on imports which could drain the country’s international reserves. As of March 2018, The Bahamas’ reserves stand at US$1.597bn, covering approximately 6.4 months of total merchandise imports.” The Bahamas’ fiscal woes mean it is now unable to rely on such practices, and the IDB report added: “The country’s exposure and vulnerability to natural disasters, and its current macroeconomic environment, highlight the importance of implementing measures that can help increase The Bahamas’ economic and fiscal resilience to disaster risk.

NOTICE

NOTICE is hereby given that VALDETA HENRY of George Town, Exuma, 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 20th day of June, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE is hereby given that ERIKA DUBREUS of Joe Farrington Rd., Kool Acres Subdivision, New Providence, 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 13th day of June, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

LEGAL NOTICE

International Business Companies Act (No. 45 of 2000)

RK Investments Fund Ltd. (the “Company”)

CBS Investment Fund Ltd. (the “Company”)

Notice is hereby given that, in accordance with Section 138 (8) of the International Business Companies Act, No.45 of 2000, the Dissolution of RK Investments Fund Ltd. (IBC No. 173332 B) has been completed, a Certificate of Dissolution has been issued and the Company has therefore been struck off the Register. The date of completion of the Dissolution was the 30th day of May, 2018.

Notice is hereby given that, in accordance with Section 138 (8) of the International Business Companies Act, No.45 of 2000, the Dissolution of CBS Investment Fund Ltd. (IBC No. 160982 B) has been completed, a Certificate of Dissolution has been issued and the Company has therefore been struck off the Register. The date of completion of the Dissolution was the 30th day of May, 2018.

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

BISX ALL SHARE INDEX: CLOSE 1,919.11 | CHG 0.00 | %CHG 0.00 | YTD -144.46 | YTD% -7.00 52WK LOW 3.50 17.43 7.50 3.32 0.90 0.12 3.10 8.50 6.00 3.15 9.00 2.30 1.40 7.25 6.00 9.50 5.67 3.25 12.50

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

1050.00 1000.00 1000.00 1000.00

1000.00 1000.00 1000.00 1000.00

Cable Bahamas Series 6 Cable Bahamas Series 8 Cable Bahamas Series 9 Cable Bahamas Series 10 Colina Holdings Class A Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Commonwealth Bank Class Fidelity Bank Class A Focol Class B

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

SYMBOL AML APD BPF BWL BOB BBL CAB CIB CHL CBL CBB CWCB DHS EMAB FAM FBB FIN FCL JSJ

E J K L M N

CORPORATE DEBT - (percentage pricing) 52WK HI 100.00

52WK LOW 100.00

CAB6 CAB8 CAB9 CAB10 CHLA CBLE CBLJ CBLK CBLL CBLM CBLN FBBA FCLB

SECURITY Fidelity Bank Note 22 (Series B) +

SYMBOL 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 2.14 4.16 2.00 179.39 157.58 1.55 1.70 1.64 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 1.49 1.62 1.58 1.07 6.41 7.62 5.66 8.65 10.54 9.57

LAST CLOSE 4.40 17.43 9.09 3.85 1.01 0.18 3.10 8.89 6.12 3.85 10.90 2.59 1.70 7.59 6.10 11.00 6.32 3.44 12.51

CLOSE 4.40 17.43 9.09 3.85 1.01 0.18 3.10 8.89 6.12 3.85 10.90 2.59 1.70 7.58 6.10 11.00 6.32 3.44 12.51

CHANGE 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 0.00 0.00 0.00 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

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

CLOSE 100.00

CHANGE 0.00

107.02 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

0.06 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

106.96 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

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

5,550 133,850

5,000

VOLUME

1000

NAV 2.14 4.13 2.00 179.39 153.02 1.55 1.69 1.64 1.09 7.15 8.14 6.41 11.26 11.68 10.24

EPS$ 0.361 0.932 -0.306 0.283 -0.973 0.000 -0.996 0.638 0.573 0.171 0.627 0.102 0.330 0.000 1.129 0.679 0.610 0.293 0.665

DIV$ 0.080 1.130 0.000 0.230 0.000 0.010 0.000 0.320 0.220 0.120 0.620 0.060 0.070 0.084 0.320 0.500 0.200 0.120 0.580

P/E 12.2 18.7 N/M 13.6 N/M N/M -3.1 13.9 10.7 22.5 17.4 25.4 5.2 N/M 5.4 16.2 10.4 11.7 18.8

YIELD 1.82% 6.48% 0.00% 5.97% 0.00% 5.56% 0.00% 3.60% 3.59% 3.12% 5.69% 2.32% 4.12% 1.11% 5.25% 4.55% 3.16% 3.49% 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

0.0 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 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% YTD% 12 MTH% 0.93% 4.18% -0.07% 5.20% 0.56% 2.38% 0.39% 5.05% -0.25% 4.57% 1.29% 4.18% -0.61% 2.84% 1.02% 3.84% -0.87% 1.82% -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 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 31-Mar-2018 31-Mar-2018 30-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 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

To advertise in The Tribune, contact 502-2394

PUBLIC NOTICE

The Public is hereby advised that I, PAUL LEANDER STRACHAN of Okra Hill, Collins Yard, P.O. Box N-1570, Nassau, Bahamas, intend to change my name to PAUL LEANDER COLLINS. 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 McKenzie Joseph of Geneal Delivery, 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 13th day of June, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

NOTICE

BISX LISTED & TRADED SECURITIES 52WK HI 4.50 19.17 7.50 3.85 1.48 0.19 4.05 8.90 6.60 5.30 11.00 2.71 1.70 8.21 6.10 11.48 7.29 13.67 12.51

providing ex-ante financial coverage for the emergency phase in high magnitude disasters partially reduces the risk of even worse impact scenarios in terms of the disaster’s impact on public accounts, since financing is quickly available to handle the emergencies. “Studies confirm that having the financial coverage to provide liquidity in case of severe events ensures greater stability in long-term economic growth compared to a scenario in which this type of coverage is not in place, since resources are readily available to meet the requirements of an emergency, which eliminates the need to finance extraordinary expenditures from public accounts that were not budgeted to accommodate such needs.”

INTENT TO CHANGE NAME BY DEED POLL

MARKET REPORT TUESDAY, 19 JUNE 2018

“Overall, it has been estimated that, for a maximum considered event with recurrence period of one in 100 years, average annualised losses would reach 8.5 percent of GDP. This number increases to almost 28 percent of GDP when considering an event with recurrence of one in 500 years.” The IDB added that its $100m facility would provide “more efficient coverage” through reduced costs and “the savings created by timely availability of resources, while reducing the liquidity gap that governments generally face during such events due to the combination of increased expenditures, lower revenues, and incremental constraints in terms of cost and access to debt”. It added: “In other words,

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

NOTICE is hereby given that DELTON OSHAIN BARRETT of Misty Gardens, South Beach, P.O. Box SP 64144, New Providence, 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 13th day of June, 2018 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas. LEGAL NOTICE

International Business Companies Act (No. 45 of 2000) Rooke Asset Management Ltd. (the “Company”) Notice is hereby given that, in accordance with Section 138 (8) of the International Business Companies Act, No. 45 of 2000, the Dissolution of Rooke Asset Management Ltd. (IBC No. 175333 B) has been completed, a Certificate of Dissolution has been issued and the Company has therefore been struck off the Register. The date of completion of the dissolution was the 29th day of March, 2018.

Legal Notice

NOTICE

ST. LAWRENCE GROUP LIMITED NOTICE IS HEREBY GIVEN as follows: (a) ST. LAWRENCE GROUP LIMITED has been dissolved on the 5th day of June 2018 under the provisions of the International Business Companies Act, 2000. Brian Jones Liquidator

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

THE TRIBUNE

Wednesday, June 20, 2018, PAGE 7

BIA chair: late revision shows ‘untidy’ budget process FROM PAGE ONE that the draft Bill was only amended, and returned to the Budget communication position, between Friday and Monday this week “depending on who you talk to” within the Government. The latest ‘11th hour’ change is the latest Budgetrelated surprise for the Bahamian insurance industry, with Mr Komolafe reiterating “time is of the essence” when it comes to the Government releasing its VAT guidance notes. He warned that it was critical “to avoid chaos” in the transition, and said it was “only fair” for the insurance industry to receive similar treatment to the extended timelines granted to the hotel and construction industries given that its policies ‘locked in’ the prevailing 7.5 per cent VAT rate until their renewal. “One of the things that came out of this whole Budget debate is that the process was untidy,” Mr Komolafe told Tribune Business. “The Budget communication said one thing, the VAT Amendment Bill said something else and, just before it was passed in Parliament we were advised the Bill was in error and [exempt status] only applies to owner-occupied dwellings. “It’s changed again, and we were not given any notice of what was going on. This was changed between Friday and Monday. That’s what we’ve been told, depending on who in government you talk to.” The BIA chair said the latest change was revealed to him by Marlon Johnson, the Ministry of Finance’s acting financial secretary, who said the Bill’s inclusion of multiple property and casualty insurance produce lines “was an error and there will be an amendment to reflect only owner-occupied dwellings will be exempt”. Mr Komolafe said the industry was now eager to obtain the final Bill passed by the House of Assembly, and added that the Budget’s “untidy” nature was further illustrated by revelations yesterday that the VAT ‘zero rating’ of medicines will only take effect from August 1 - not July 1. Mr Komolafe revealed that the disclosure came when the insurance industry met Department of Inland

Revenue (DIR) officials over the Budget yesterday. He said the DIR promised that “revised guidelines” for the insurance industry’s transition to a 12 per cent VAT will be released this week. He said; “We discussed the challenges of implementation and the short timeframe. They are mindful of the challenges we face, and will make representations to the Financial Secretary and Minister of Finance with respect to providing us ample time for being able to adjust. It was very clear that time is of the essence, but to have a smooth roll-out and avoid chaos there has to be some transition provisions that make it easier for us to implement these changes to the VAT regime. “Bearing in mind some accommodation was provided for the hotel industry, the construction industry, we expect that it’s only fair that they do the same thing for the insurance sector.” With the existing 7.5 per cent rate already locked in on many insurance contracts, Mr Komolafe said the industry could only apply the increase to 12 per cent once such policies came up for renewal. Clients also needed to be notified of premium increases, and adjust payments made by direct debit. The BIA chair warned that “the messaging needs to be right” from both the Government and private sector as to what ‘exempt’ status for residential property insurance means, given this is unlikely to translate into a 12 per cent fall in premium prices as insurers are unable to offset their ‘input’ VAT. “The first thing is clarity on the transition period and implementation date,” Mr Komolafe said. “We are seeking that in ample time to adjust our systems, notify clients and make sure they can adjust their payments. “We’ve indicated this is very important, and they’ve made a commitment to get back to us with guidance and transition provisions, and an implementation date. I did state to them that based on the short timeline our members have we don’t want them to be penalised because of the lack of clarity. The amount of work that needs to be done; we don’t have sufficient time.”

Back-to-school fear on duty waiver delay FROM PAGE FOUR Representations have already been made to the Minnis administration, and the Chamber chief executive added: “We’ve asked them, based on some of the situations we’ve encountered from this industry, to move it up to July 1, especially for those selling school supplies, so they can avoid paying customs duties on shoes and clothing imports at 25 percent. “The government is considering that, and hopefully they will announce that concession soon.” The tax waiver, announced by the deputy prime minister in the budget communication, was initially hailed for helping to preserve Bahamian businesses and jobs in a retail sector that has been hit hard by online and USbased rivals. “We are providing for the waiver of duty on clothing and shoe imports upon application by importers and retailers of same,” Mr Turnquest said. “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.” The government has seemingly delayed implementation of several key budget “tax breaks” beyond the July 1 start for the 2018-2019 fiscal year, with Tribune Business revealing yesterday that the VAT “zero rating” for breadbasket food items has also been pushed back until August 1. Marlon Johnson, the Ministry of Finance’s acting financial secretary, told this newspaper that the month’s delay would enable retailers’ point of sale (PoS) and inventory mechanisms to account for the multiple tax exemptions. “The reason for that is to give the retailers time to adjust their point of sale systems, their inventory systems

and receipts to account for the exemptions,” Mr Johnson said, indicating that the government would be lenient when it came to merchants adjusting all their pricing, labelling and signage by July 1. He added that the Ministry of Finance was “working furiously” to complete the

“guidance notes” that will advise the private sector on the transition to a 12 percent VAT, with their release set to potentially occur as early as today “but certainly this week”. Mr Johnson reaffirmed, though, that “the unassailable message” is that the 60 percent VAT rate hike will

take effect from July 1. And, notwithstanding the wait for the guidance notes, the Ministry of Finance is expecting all businesses to be “well advanced” in their preparations for 12 percent VAT so they can be compliant by the deadline. But, with just eight “working days” left before the new VAT rate takes effect, the rapid release of the guidance notes is becoming ever more critical to ensuring a smooth transition for both the private sector and government revenues.

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PAGE 8, Wednesday, June 20, 2018

THE TRIBUNE

Trump raises risk of economically harmful US-China trade war WASHINGTON Associated Press THE United States and China edged closer yesterday to triggering the riskiest trade war in decades, a fight that could weaken the world’s two

largest economies, unsettle relations between Beijing and Washington and crimp global growth. The collateral damage could be widespread. If the tariffs the two countries have threatened to slap on each other’s exports take effect, their consumers

would have to pay higher retail prices. Companies would pay more for imported parts and would have to decide whether to absorb those higher costs — or pass them on to their customers. American farmers could be evicted from a lucrative

market for their goods. US companies, from Caterpillar to Qualcomm, would likely face obstruction from regulators in China, a market they rely on for an outsize share of sales. The standoff, mostly over China’s sharp-elbowed drive to supplant US

GN 2041

technological dominance, threatens to tip “the US and China into a downward spiral like the world hasn’t seen since the trade war that plunged us deeper in in the Great Depression and into the Second World War”, warned Matt Gold, professor of international trade law at the Fordham Law School and a former US trade official. World financial markets buckled after President Donald Trump ratcheted up the tensions by proposing a fresh batch of tariffs on Chinese products. With concerns growing on Wall Street, the Dow Jones industrial average closed down nearly 300 points — more than one percent — on its sixth straight losing day. Stocks tumbled nearly three percent in Hong Kong, two percent in Tokyo and four percent in Shanghai. Trump previously ordered 25 percent tariffs on $50bn in Chinese goods in retaliation for Beijing’s forced transfer of US technology and for intellectual property theft. Those tariffs, set to start taking effect July 6, were matched by China’s threat to penalise US exports. Beijing’s response drew the president’s ire. On Monday night, Trump told his US trade representative, Robert Lighthizer, to target an additional $200bn in Chinese goods for ten percent tariffs. These penalties would take effect, the White House said, “if China refuses to change its practices” and proceeds with its plans for retaliatory tariffs. The tit-for-tat penalties could escalate further yet: Trump threatened tariffs on $200bn more in Chinese products if Beijing lashes back again. Combined, the potential tariffs on Beijing could cover $450bn — a sum equal to 89 percent of Chinese goods imported to the United States last year. “He’s upping the ante,” Wendy Cutler, a former US trade negotiator who is now at the Asia Society Policy

Institute, said of Trump. “He’s willing to totally close our market to their exports... There are going to be serious consequences.” The tariffs would start to slow US growth, economists warn. Oxford Economics estimates that if Trump imposed the $200bn in tariffs and China responded in kind, US growth could slow by 0.3 percentage point next year. Trump is gambling that Beijing has the most to lose. China couldn’t come close to matching America’s tariffs on $450bn of Chinese exports. The United States sold only $130bn of goods to China last year. But Beijing has chosen its targets strategically. Soybeans are on the list — a direct shot at a swath of Trump supporters in the American heartland. About 60 percent of US soybean exports go to China. And Beijing has other ways to inflict pain on American companies. It could delay or deny licenses that American companies need to operate in China. Or it could hold up their products at customs. And US companies have an increasingly sizable stake in the fast-growing Chinese market. They’ve invested a cumulative $256bn there since 1990 (versus the $140bn China has invested in the United States), according to the Rhodium Group research firm and the National Committee on USChina Relations. Companies in the Standard & Poor’s 500 derive a collective 5.5 percent of their revenue from China, according to the data firm FactSet. For some companies, the exposure to China is far higher: US tech giant Qualcomm generates 63 percent of its revenue in China and needs Chinese authorities to approve its takeover of semiconductor maker NXP. Chipmaker Qorvo gets over half its revenue in China, Intel nearly 23 percent.