06212018 business

Page 1

business@tribunemedia.net

THURSDAY, JUNE 21, 2018

$4.80

Tax change threat to Out Islands’ ‘survival’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

FAMILY Island realtors are warning that Real Property Tax Act changes will be such “a breaking point” for many second homeowners that it threatens their economies’ very “basis of survival”. James Rees, a broker with Abaco Island Properties (Bahamas), told Tribune Business that the tax hikes introduced by the changed definition of “owner-occupied property” would likely exacerbate the damage caused by last year’s “crazy” jump in property tax valuations for many on the island. Describing the “owneroccupied property” change as “huge”, Mr Rees said it would affect many of Abaco’s Canadian second homeowners because they have to spend at more than six months in their home

* PROPERTY ACT ALTERATION A ‘BREAKING POINT’ * INVESTORS UNNERVED BY ‘CONSTANT CHANGE’ * BUDGET HIKES ‘TOO MUCH IN ONE SWOOP’ country as a condition of being able to access public healthcare services. The Real Property Tax Amendment Bill, which accompanied the 2018-2019 budget, requires “owneroccupiers” to reside in their homes for six months or more per year. This is a marked change from the current Act, which defines “owner-occupiers” as persons who reside in their homes “on a permanent or seasonal basis”. This allows The Bahamas’ second homeowner

SEE PAGE 4

Insurance covered just 13% of Joaquin damage By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net PRIVATE insurance covered just 13.5 percent of the $105m in damages and losses inflicted by Hurricane Joaquin in the southern Bahamas, a newly-released study has revealed. The report found that just $14m of the devastation inflicted on several Family Islands in early October 2015 had adequate catastrophe protection, highlighting the drain imposed on an already-strained public treasury by the low level of insurance penetration in less-populated regions well away from Nassau. “The level of insurance penetration decreases as one moves south along the chain of islands in The Bahamas,” said the joint study by the Inter-American Development Bank (IDB) and Economic Commission for Latin America and the Caribbean (ECLAC).

* STUDY: AROUND $91M UNPROTECTED * BLAMES HIGH COST FOR LOW PENETRATION * AND POINTS TO LACK OF SECTOR COMPETITION “A preliminary assessment by the Bahamas Insurance Association (BIA), with available data up to 1 December 2015, which is enhanced by information from the Insurance Commission of the Bahamas (ICB), suggests that gross losses to the insurance industry caused by Hurricane Joaquin is approximately $14m; that is 13.4 percent of the total estimated damage.” The data will likely be seized on by the BIA and its members as further evidence to support their argument that all property and casualty

SEE PAGE 10

Govt to ‘accommodate’ Back to School retailers By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE government yesterday promised to “try and accommodate” Bahamian retailers seeking to access tax breaks for the Back to School season ahead of the August 1 implementation. Marlon Johnson, pictured, the Ministry of Finance’s acting financial secretary, told Tribune Business that the launch of customs duty exemptions for footwear and clothing imports had been pushed back a month to ensure there were no problems with the “application process” licensed retailers must follow to access these benefits. “The plan was to bring them into effect on August 1,” Mr Johnson confirmed. “It gives us time to get the application process sorted out. It’s always been the plan to give us time to get

* WILL GIVE TAX BREAK ACCESS PRE-AUGUST 1 * DELAY TO ‘SORT OUT APPLICATION PROCESS’ * OFFICIALS EXPECT ‘SIGNIFICANT’ INTEREST

the application process up so that we understand what we’re doing.” Only retailers and merchants possessing a business license allowing them to sell clothes and shoes will have access to the duty

SEE PAGE 7

$4.82

$4.91

$4.91

Loretta: budget ‘slap in face’ for the poor By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

T

HE prime minister’s former FNM leadership nemesis yesterday accused him of delivering “a slap in the face” to the poor Bahamians he purports “to stand for” via the 12 percent VAT hike. Loretta Butler-Turner, pictured, who led the illfated “coup” that removed Dr Hubert Minnis as opposition leader prior to the 2017 general election, told Tribune Business she had “no doubt” that the budget will fall “immensely” short

* Ex-MP: shows why I rebelled * Fears ‘immense’ revenue miss * As ‘grey market’ already growing

of its projected revenue increases. Arguing that there was “not much light at the end of the tunnel” for the Bahamian economy, Mrs ButlerTurner echoed the warnings of many observers that the magnitude of

the VAT increase will drive many consumers to the “grey market” or “underground economy” where the tax is not levied. Turning to the budget’s political aspects, Mrs Butler-Turner said the manner in which the budget’s tax increases were

handled highlighted just why she had led the rebellion against Dr Minnis’s leadership. She blasted the government for failing to properly communicate the reasons for the 60 percent VAT rate hike and other revenueraising measures to the Bahamian people, so that they can better understand why they are being called upon to make sacrifices in the form of less disposable income and living standards. And the former Cabinet Minister and MP argued that it had failed to live up

SEE PAGE 5

Tobacco tax increase fear ‘premature’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net FEARS of a further hike in the 220 percent tobacco tax rate were yesterday branded premature, a Cabinet Minister revealing legislative reforms are “not yet ready for prime time”. Dr Duane Sands, minister of health, told Tribune Business that the draft Tobacco Control Bill was “awfully draconian” and needs further work, with “absolutely no decision” taken over any taxation increase.

* Cigar industry fears ‘kill off’ from bill * Minister: Law ‘not ready for prime time’ * Admits current draft ‘awfully draconian’

DR DUANE SANDS

He was responding after an e-mail, sent by an organisation called itself the Bahamas Premium Cigar Association (BPCA), hit out over what it described as the government’s efforts to impose an additional “sin tax” on high-end, premium cigars through the bill. Michael Maragh, the Association’s president

and e-mail sender, did not respond to Tribune Business’ reply requesting comment. He argued, though, that there was no need for heavy-handed regulation or extra taxation on cigars as studies had shown they carried “nowhere near the same level of risk” to

SEE PAGE 6


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.
06212018 business by tribune242 - Issuu