By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE controversy over the Government’s $137.5m April deficit reversal was yesterday branded “a tempest in a tea cup” amid fears it will undermine The Bahamas’ credibility with investors and ratingagencies.
Gowon Bowe, Fidelity Bank (Bahamas) chief executive, told Tribune Business that Wednesday’s House of Assembly row over the Prime Minster’s flawed fiscal prediction for April is akin to “agonising over something that has no relevance any more” for the likes of Moody’s and Standard & Poor’s (S&P) as well as the wider international capital markets.
• Investors more focused on full year, 2025-2026 forecast
• Banker demands ‘accountability’ over $137m April swing
Report undeclared vacation rentals to tax authorities, Bahamians told
By FAY SIMMONS Tribune Business Reporter jsimmons@tribuneemedia.net
BAHAMIANS were yesterday encouraged to report neighbours with undeclared short-term vacation rentals to the tax authorities who have “flagged” more than 20,000 such properties as not registered.
Shunda Strachan, the Department of Inland
Revenue’s acting controller, said a recent study - which was not disclosed - estimated that only 20 percent of existing short-term vacation rentals have complied with the need to register their properties with the tax authority. And, in addition, only15percentoftheproperties and owners who should be paying VAT to the Governmentareregistered.
Liquor stores face DIR registration next month
By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net
LIQUOR stores will from September 1 have to register with the Department of Inland Revenue’s website as part of the Government’s crackdown on the sector’s over-saturation ininner-cityNassau.
Shunda Strachan, the Department of Inland Revenue’s acting controller, said liquor stores and bars must register and pay a $100 fee prior to applying for a Business Licence
- either a renewal or new application.
Speaking at the Office of thePrimeMinister’sweekly mediabriefing,MsStrachan said new licence applicants must register through the portal 90 days before applying for their Business Licence. Each application will be publicised as part of a public consultation process, and meet suitability requirements before being approved. Existing licence holders must also register their business through the portal prior to renewal. Ms
Speaking at the Office of the Prime Minister’s weekly media briefing, Ms Strachan said these findings sparked the Department of Inland Revenue’s recent issuance of letters to property owners seeking their help to “get the arena in line” and report short-term rentals in their neighbourhoods. Many Bahamians, though, viewed the move as a “fishing expedition”andtaxgrab.
“We noticed that there are over 20,000 short-term vacation properties throughout The Bahamas that we have flagged,” Ms Strachan said. “I know there are more, but that’s just what we have discovered. And out of that amount, we would say only about 20 percent of them are
He argued that both credit rating agencies, as well as multilateral agencies such as the International Monetary Fund (IMF) and existing holdersofTheBahamas’sovereign debt, will have long
really registered on the shorttermvacationportal.
“It should be 100 percent. Only20percentregisteredon theshort-termvacationportal rightnow,andonly15percent that should be paying VAT are registered for that and that is a concern. We think it’smore,butwe’reconcerned to at least get the 20,000 registered on the short-term vacation portal, and those that need to be registered for that, we’re trying to get them registeredforthat.
“And so that was the purpose of the notices being sent out.ItwasreallytogetBahamianstohelpustokindofget thatwholearenainline.”The Government has long viewed theshort-termvacationrental
Real estate VAT reforms must be ‘win-win’ result
• Realtors, attorneys still await guidance notes
• BREA offers alternative 30-day ‘trigger points’
• Notes’ release ‘important’ for mortgage market
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Theexecutionofreal estate-related VAT reforms must create “a win-win situation” for both industry and government, it was arguedyesterday,amid the ongoing wait for “important” implementationguidance.
David Morley, who chairs the Bahamas Real Estate Association’s (BREA) legislative committee, told Tribune Business that publication by the Department of Inland Revenue (DIR) of guidance notes detailing the processes and mechanisms for how the changes will work in practice is still awaited even though these took effect almost six weeksago.
Describingtheirreleaseas“veryimportant” for both attorneys and realtors, and the property market’s smooth functioning, he added that “everybody’s trying to comply” with the Government’s drive to extract increased VAT onrealestatesalesbuttheguidancenotesare critical to ensure all parties know what to do andwhen.
ShundaStrachan,theDepartmentofInland Revenue’s acting chief valuation officer and controller, yesterday told the Office of the Prime Minister’s weekly media briefing that the guidance notes are due to be published imminently on the tax authority’s website. However, a Tribune Business reporter was unable to locate them before this newspaper wenttoprint.
“BREAhadameetingwiththeDepartment of Inland Revenue over this,” Mr Morley, Morley Realty’s owner/broker told this newspaperovertheguidancenotes.“Iwouldguess thatwasclosetotwoweeksago. Atthattime they indicated they were drafting guidance notes.
By NEIL HARTNELL
nhartnell@tribunemedia.net
the French Leave resort’s general manager, in an August 1, 2025, letter to employesthatwasobtained byTribuneBusiness,wrote: “Unfortunately, French Leave Resort and Shaner Bahamas must furlough you, effective August 18, 2025, because of a lack of business and the resulting closure of the 1648 restaurant.
“It is a very difficult time for all of us, and we have had to make tough decisions to protect our future as a company. You may be eligible to be recalled by French Leave in the future.” While the layoffs were described as a furlough, the letter encouraged staff to apply for their National Insurance Board (NIB) unemployment benefits “based on lack of work”.
DAVIDMORLEY
BTC HAILS ‘BLUE LETTER DAY’ AS GB FULLY FIBRE
THE Bahamas Telecommunications Company (BTC) yesterday said all Grand Bahama subscribers have been migrated to its new fibre-optic technology with more than 23,500 homes passed by the network.
Sameer Bhatti, BTC’s chief executive, described the infrastructure investment as a “Blue Letter Day” for the carrier, Grand Bahama and the wider Bahamas as it will boost Internet connectivity, capacityandspeed.
“Today is a proud and historic day for BTC, particularlyourGrandBahama team and, most importantly, our customers,”
said Mr Bhatti, referring to the aftermath of Hurricane Dorian. “We’ve not only rebuilt our network in Grand Bahama, but we’ve alsoreimaginedthefuture.
“Grand Bahama is no longer just restored; it’s now the national leader in digital infrastructure. We’ve reached our goal of fully fiberising the island to deliver a faster, more reliable and more valuable user experience for residents and commercial customers.Technologyisnolonger justatool;rather,anengine that shapes every facet of Bahamianlife.”
Dominic Petty, BTC’s executive senior manager for the Northern Bahamas,
DPM NAMED AMERICAS’
VICE-PRESIDENT TO UN TOURISM BODY
THE Deputy Prime Minister has been elected as vice-presidentoftheUnited Nations World Tourism Organisation (UNWTO) General Assembly representing the Americas region.
Chester Cooper, also minister of tourism, investments and aviation, will serveinthiscapacityforthe 2025 term. The UNWTO General Assembly is the supreme decision-making body for the organisation, and is responsible for electing officers, adopting policies and guiding the globaltourismagenda.
Can
The Ministry of Tourism, in a statement, said Mr Cooper’s serving as vice-president places The Bahamas in a position to influenceinternationaltourism policy and collaborate onsustainabledevelopment prioritiesacrosstheregion.
The election took place duringtheofficialUNWTO Regional Commission for the Americas session held in Lima, Peru, on August 1, where member states voted bysecretballot.
While The Bahamas previously held a vice-presidency at the 21st UNWTO General Assembly in 2015,
added: “Fibre is a game changer. The unmatched speed, reliability and future-ready capabilities mean residents can now truly thrive in a digital first world.
“This network lays the foundation for Grand Bahama to become the nation’s first Smart City. We want Grand Bahamians to know that BTC is committed to delivering exceptional connectivity and value. Despite challenges, we steered the course. This milestone not only benefits current users butpavesthewayforfuture innovationandservices.”
BTC last year decommissioned its legacy copper
Mr Cooper’s election will see the country once again assuming a visible role on the world stage at a time when tourism faces both
2025-2026 surplus forecast ‘cut the mustard’
moved past April’s performancetofocusonthemore important 2024-2025 fullyearfiscaloutcomeandany implications for the $75.5m Budget surplus projected for2025-2026.
Branding the House of Assembly as “the new Shirley Street Theatre”, Mr Bowe told this newspaper that the back-and-forth between Philip Davis KC and Opposition members “really has no bearing” on how the global capital markets views The Bahamas’ creditworthiness while describing events as “poor entertainment because it was not all that entertaining”.
Still, he reiterated his call for “accountability” overhowthe$135.4mApril surplus that was forecast by the Prime Minister in his 2025-2026 Budget communicationbecamea$2.1m deficit in the Ministry of Finance’s April performance report released less thantwomonthslater.
Pointing out that Mr Davis, as The Bahamas’ “chief executive and chief financial officer” in his roles as prime minister and minister of finance, “has a fiduciary duty to be accurate in his reports and communications”, Mr Bowe added that the Government needed to explain why there was such a wide variance between the April forecastandoutcome.
The Fidelity chief said it must address whether there was an error in the financial information provided to Mr Davis by the Ministry of Finance or if there was a mistake by the writers who crafted the Budget address. And it must also outline what systems and actions it is taking to avoid any repeat as The Bahamas cannot afford for external investors to ignore, or no longer rely on, the financial dataitprovides.
Mr Bowe spoke out after the Prime Minister, in response to Opposition charges, denied ever saying that “preliminary data” showedaprojected$135.4m surplus for April 2025. This wasdespitehimclearlystatingthisduringtheend-May Budget presentation, and the fact that both the figure andhiswordsaresetouton page 30 of the actual communication which is posed on multiple government websites.
Both Tribune Business and the Nassau Guardian published details of the discrepancy between Mr Davis’ rosy projection and the actual $2.1m deficit outcome once the Ministry of Finance report was published. The Government later blamed the variation largely on not recognising interest payments due on its various debt securities, which it asserted had yet to be posted by the PublicTreasury. However, sources familiar with government debt operations later cast doubt
onthevalidityofthisexplanation as the Government’s debt servicing costs, the timing of these payments, and on which instruments are well known at the start of every fiscal year. They argued that, even if the Public Treasury had not posted them, the extent of such expenditure would be known by the Ministry of Finance.
Mr Davis, on Wednesday night, appeared to insert a new explanation into the debate by suggesting that the $135.4m figure referred to a “primary” surplus as opposed to a full surplus under the GFS definition employedbyTheBahamas.
A “primary” surplus strips out interest payments, or debt servicing costs, from the calculation while the GFS measurement does not. However, the word “primary” was never used by Mr Davis during his end-May Budget communication in referencetotheApril2025fiscal performance, and it does not appear in his written speech either in connection withthatmonth.
Michael Pintard, the Opposition’s leader, yesterday asserted that the Free National Movement (FNM) is “very concerned” that the April variation, as well as the multiple different explanations given by Mr Davis, threaten to undermine The Bahamas’ credibility and reputation with the credit rating agencies and international capital markets. And this,
opportunities and complex challenges.
“This appointment is the result of strong regional partnerships and a shared
he indicated, could hit the country’screditworthiness.
“We are very concerned about the impact of his statements both within the country as well as internationally, whether they are multilateral agencies or rating agencies,” Mr Pintard said. “The Prime Minister is not only speaking in his capacity as prime minister but as minister of finance...
“It goes to credibility. It is incredible that he would doubledowninthisway.It’s hurtful to our reputation.”
Mr Pintard argued that the situation is “worrisome and tragic”, and alleged that it was part of “a pattern of behaviour” by a Davis administration that never wantstoadmitpubliclythat ithasmadeamistake.
But Mr Bowe, while calling for government “accountability” over the Aprilsurplus/deficitcontroversy,arguedthatitisbeing overblown and is unlikely to impact The Bahamas’ creditworthinessorhowthe international capital marketsperceivethisnation.
“Our House of AssemblyisthenewShirleyStreet Theatre,anditreallyhasno bearing or substantial significance and interest that investors pay attention to,” he told Tribune Business “It’s one our politicians need to address. Parliament is where legislation is crafted and policy for the countryistobedeveloped.
“It’s turned it into a theatrical performance with no clear puppeteer because you’re not sure who’s driving what performance.” Mr Bowe described Wednesday’s back-and-forth between the Government and Opposition as “just a
vision for a more resilient and inclusive tourism sector,” said Mr Cooper.
“It is an honour to represent The Bahamas and the
comedy show” and “poor entertainment because it’s notallthatentertaining”.
Still,headded:“It’snotto downplay the significance of the utterances of the chief financial officer and chief executive officer of the country. He has a fiduciary duty to be accurate in hisreportingandcommunications... It was very clear that, as minister of finance, he made certain statements and this is where there shouldbeaccountability.”
Mr Bowe again questioned whether Ministry of Finance officials “in their exuberance” provided inaccurateormisleadingdatato the Prime Minister for his Budget communications, or if this had been misrepresented by the speech writerswhowroteit.
“He needs to be accountable, and he needs to articulate and clarify what the error was in the information provided to him, and how it was woven into his speech,” the Fidelity Bank (Bahamas) chief executive said. “He also needs to say what action is being taken to ensure it neverhappensagain.
“Accountability, where someone’s job performance has been negatively assessed as a result of this. But what systems and processes are being introduced as quality assurance, where thespeechisvettedbyqualified persons performing, in effect a mini-audit. They should not take this lightly in correcting the error made and demonstrating that it will not reoccur becausewe’retalkingabout thepublicfinances.”
Mr Bowe said the April 2025 outcome is likely to have made little impression
services to signal the end of the “plain old telephone services” era and the complete transition to fibre. Grand Bahama is now fully fibreised and can leverage digital technology to connect, protect and enhance thelivesofresidents.
BTC began its national fibre roll-out in 2016, starting with New Providence. Since then, the carrier has brought fibre connectivity to parts of Exuma, Abaco, San Salvador, Rum Cay, Long Island, Cat Island and now fully to Grand Bahama.
Caribbean at this level, and I am committed to ensuring that our collective voice helps shape the future of global tourism policy and practice.”
“This is an important momentforourcountryand for Caribbean leadership,” said Latia Duncombe, the director-general of tourism.
“Deputy prime minister Cooper’s election is a powerful endorsement of his leadership and the high regard in which The Bahamas is held by its regional partners.”
As vice-president of the UNWTO General Assembly, Mr Cooper will play a keyroleinfacilitatinginternational co-operation and supportingtheimplementation of sustainable tourism initiatives, reinforcing The Bahamas’ commitment to shaping a more equitable and sustainable global tourismsector.
on investors, creditors and analystscoveringTheBahamas given that the fourth quarter of the fiscal year into which the month falls has historically been one in whichtheGovernmentruns large deficits. The $137.5m reversal, and $2.1m deficit outcome, are thus unlikely to have altered the bigger pictureoutcomemuch.
“I don’t think this is a situation more than a tempest in a tea cup,” he told Tribune Business, “but if they don’t consider it misrepresentation, whether it’s intentional or not, there will be a knock-on effect where outsiders disregard orignorewhat’sgoingonin theHouseofAssembly.
“That will be a dangerous situation as we don’t want outsiders not to rely on information coming out of the country. The Shirley Street Theatre needs to end.”
Mr Bowe said the credit rating agencies, creditors and investors - local and foreign - will by now havelongmovedpastApril and be more focused on the 2024-2025 full-year outcome and this current fiscal year.
“For most investors this is not even the news lining the garbage can; this is the news already thrown out in the trash,” he added of the April controversy. “They arelookingforthefull-year results. We are now almost sixweekspastyear-end.
“There’sgoingtobegreat attentionontheactualfiscal performance for 2024-2025, andassessmentandanalysis of lots of factors, including projections for 2025-2026 and whether they can withstandthechallengesandcut themustard.”
BRILAND AMONG TARGETS FOR VACATION RENTAL CRACKDOWN
By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net
HARBOUR Island is among multiple Family Island destinations set to be targeted by the Department of Inland Revenue’s crackdown on undeclared short-term vacation rentals, itwasrevealedyesterday.
Shunda Strachan, the tax authority’s acting controller, said action will soon be taken against foreignowned vacation rentals in the Family Islands that have failed to register with
itandpaydueVATontheir income.
Speaking at the Office of the Prime Minister’s weekly media briefing, Ms Strachan said the Department of Inland Revenue is targeted foreign-owned vacation rentals that are being advertised via the Internet and social media outside The Bahamas without any monies touching thisnation.
“We do have a concern that you probably see in the press soon on short0term vacation properties, because that’s really a little issue for us. Properties being rented in the islands, but not being advertised or
promoted by Bahamians, butbyforeignrealtors,”she added.
“So that’s a concern, especiallyonlikeaHarbour Island, that type of thing. So stay tuned, because you’re going to see some something in in that area. Those property owners are notpayingVATandthey’re allforeign-owned.”
Ms Strachan said the Department of Inland Revenue is also making progress with exercising its ‘power of sale’ to seize, then auction off, properties whose owners are delinquent in paying real property taxes. More than 20 sales are in progress or
BPL holds-off disconnections on Eleuthera outage outrage
By ANNELIA NIXON Tribune Business Reporter
BAHAMAS Power & Light (BPL) yesterday pledgeditwillnotthisweek disconnect Eleuthera customers over past-due bills amid rising outrage over frequent and long-lasting electricityoutages.
Noting that is “common practice for the company to dosoonpastdueaccounts”, BPL told Tribune Business thatEleutherawillnotseea disconnection exercise. The belief that this would occur circulated widely on the island this week after social media posts urged customers to ensure their accounts werecurrentaheadofadisconnection exercise due to last from August 5 through August8.
Juanita Pinder, owner of Office General, replied to the posting: “To avoid whatinterruptionwhenyou ain’t get no service? You see the irony in this whole mess? They all over the place threatening people about disconnection. We pay our bills. For the most part, Eleutherans pay their bills. But people are irate about it. I run a business. Peopledependonmeevery day.”
Mrs Pinder and her husband, Roderick Pinder, voicedtheirfrustrationwith BPL, noting that staff were unsure if they should close the store early or suffer throughhavingnopower.
“This is our busiest season of the year,” Mrs Pinder added. “We’re like a local Bookworld and Stationers, like John Bull. We sell office and school supplies. We’ve been in business from 1998. The people depend on us at this time for their back to school supplies, books and office supplies, as well for the businesses locally, for government offices. Everyone, pretty much depends onus.
The Governor’s Harbour-based store has experiencedmultiplehours’ long outages. Mrs Pinder noted that Nassau does not endure island-wide black outs ever other day any longer, so “why are Eleutherans being treated likethis?”
Leatendore Percentie said a mass disconnection would have led to a “riot”, adding that BPL expects payment for poor services rendered. “You would have hadariotuphere,”hesaid. “There would have been someconsequences.
ELEUTHERA RESIDENTS EYEING ST GEORGE’S POWER ‘PLAN B’
By ANNELIA NIXON Tribune Business Reporter
anixon@tribunemedia.net
FRUSTRATED
Eleuthera residents yesterday suggested that St George’s Cay Power Company (SGCPC) replace Bahamas Power & Light (BPL) or provide a reserve optionforthemainland.
Leatendore Percentie, in an Eleuthera-centred BPL Hotline Whats App Group, suggested that the energyproviderforSpanish Wells, Russell Island, West End Cay, Charles Cay and RoyalIslandbecalledupon to relieve the frequent and long-lasting outages that the island is enduring on a dailybasis.
“We have seen a few PR exercises trying to address the situation, but I really think we need to hear from the general manager, who’s been here for months and months, and nobody’s ever seen or heard of him, and I don’t even know what his name is,” Mr Percentie added.
“But somebody in authority got to be in charge of BPL. This continuous touch-up job is really for the conch shells. This is a complete waste of energy because all of these turn off, turn on, turn off and turn on, and this maintenance that never used to happen before. It seemed like every other day they’re doing some maintenance.
“You know what that reminded me of? Honest to God, and I hate to say this, I’mnotamalechauvinistor anything, but that remind me of an abusive relationship or domestic violence, where someone beats up their partner or whatever, butyettheystillwantanice dinner. That’s what that reallyremindedmeof.How canyouhavetheaudacity?
“Or, if you go to a restaurant and the food’s bad or stale or something, and you’renotsatisfiedwiththe food, but they still expect you to pay a full price. That’s what they’re doing. When they do these mass disconnections, they bring like 20 people up from Nassau - about 20. Why can’t they bring 20 technicians to fix the situation -notjusttocollectandgrab the money and go - and only God knows where the moneygoes.”
Mr Percentie added:
“The irony of that is that BPL is now saying that, ‘Oh, your bill never been lower.’ But the thing is, there’s still no accurate way, in my humble opinion, of them reading your meters. And a lot of times it’s a guesstimate. And my understanding is that, at some point, someone will goandreadyourmeterand
What on earth is the problem,BPL?
“Now, [chief executive Toni] Seymour, please make some statements about Eleuthera. What is happening?Wecannotcontinue to grow with these frustrating events happening. Everybody say, ‘buy a generator, buy generator’. Well, not everybody have the money to buy a generator.Okay?
“And secondly, the insult to the people of Eleuthera, they actually posted that theyweregoingtobedoing a mass disconnection today. How can you demand patience when your service is so defective? You know, we need to get this BPL business together, honest to goodness. Otherwise, we gottohaveaplanB.”
Mr Percentie said throughout the years he andothershavemetwithSt George’s Cay Power Company in the hope it could solve Eleuthera’s electricity
completed, while several owners have made payments on outstanding real property taxes to avoid enforcementaction.
“We’ve had six publications with more than 20 sales that are either in process or completed sales. It’s not something that we’re excited to do. We have to do it because we have to get the taxes. But it is taking a while because we do still try and see what we can do for serious property owners that really intend to pay their taxes,” said Ms Strachan.
“We’ve made quite a bit relative to persons coming and paying, or entering
make an adjustment one wayortheother.
“So that doesn’t really make a lot of sense. But BPL has been claiming that electricity is now lower. And the only way your electricity can be lower, I’m hoping, is that if you’re not using it like it’s off so often. I mean, there are certain areas in Eleuthera, you can check the chat [Eleuthera BPL Hotline Whats App Group Chat] almost for the past 30 days, almost every daytheyhadinterruptions.”
Mrs Albury argued that frequent and extended poweroutagesshouldmean lower electricity bills. She said while her BPL bill has not drastically increased like some others, she has not seen a decrease either, adding: “So if my power is off continuously for hours and hours, why am I still even being billed like that?” She pointed to damaged equipment that BPL hasyettoreimburseherfor.
“We don’t have a generator,”shesaid.“Theyburned up two of our copiers. We’re still waiting for BPL to reimburse us for those. It’s impacting our business. We lose business every time. They mess up our equipment from December. This is going into the ninth month.
“AC units ain’t functioning property and, yeah, we do have a back-up supply, surge protector for our building. But who can compete against power outages
woes. “Concerned citizens, and particularly the hoteliers in Harbour Island, we’ve met several times withStGeorge’sCayPower Company, and they actually have a surplus capacity anticipating development,” MrPercentiesaid.
“And they can actually provide another 200 or 300 percent above now what they’re operating. And so theycanexporttothemainland by simply running a
payment arrangements, from the sales. We’ve made a couple of million dollars, not as much as we had anticipatedatthispoint,but again, it’s because we are very cautious with the process. Because once you sell it, it’s gone. And so we will be publishing another list, probably in another two weeks.”
Ms Strachan said real property tax arrears are “still high, but it’s been going down” and many Bahamian homeowners are now coming in to pay on their past due bills. “It’s stillhigh,butit’sbeengoing down.AndI’mproudofmy Bahamian people, because
like this? And surges? The surgesaresosevere.”
While some in the BPL Whats App group spoke about standing outside power plants on the island, a post was shared suggesting BPL provide ice to the communities. One resident suggested that the power situationwouldnotimprove until they stand collectively and refuse to provide payments to BPL for less than satisfactoryservice.
One resident added that they should “harass the headquarters”. Mrs Pinder said Eleuthera in its entirety should shut down, but noted the result would still negatively impact Eleutherans.
BPL acknowledged its customers’ frustration, adding: “We understand the deep frustration being expressed by our customers in Eleuthera. Many of our own employees, friends and family members live and work on the island,
they are taking real property tax really seriously now,”sheadded.
“We’re seeing the shift, and I can only commend the people, because I know it’s a difficult thing if you hadn’tbeenpayingallalong to commit to paying it. I’m proud of those persons that come in and they make payment arrangements.” Bahamian-owned owneroccupied properties are exempt from being seized and auctioned off over delinquent real property taxes.
and they, too, are directly impacted by the ongoing challenges.
“We want to reassure the public that we hear them, we empathise with them and, most importantly, we are actively working on both immediate and longterm solutions to provide relief. In partnership with the Government of The Bahamas, we are hopeful that the upcoming Power Purchase Agreements for Eleuthera will help alleviate the strain on the island’s existing generation capacity.
“Eleuthera is a fastgrowing economy, and our executive leadership and Board of Directors remain fully committed to implementing strategies that will address long-standing infrastructure issues and strengthen the reliability of supply. This is not just about power, it’s about people. And we are determinedtosetthingsright.”
‘Everybody trying to comply’ with reforms
The impression we got from them was not only are they giving guidance notes for real estate agents, but they’re going to have different sets for attorneys so everyone has a clear understanding of what they’re supposed to do and not to do.To-date,wehaven’tseen anything. I just e-mailed the Department of Inland Revenue this afternoon followingupwiththem.
“Basedonourdiscussions with them [the Department of Inland Revenue], they were going to share with us what they were considering for real estate and allow us to provide some feedback. I think they’ve come to realise it’s got to be a win-win situation and they cannot over-burden us with requirements that are impossibletofulfill.”
Under reforms to the VATAct,realtorsnowhave to notify the Department of InlandRevenueofanyland,
property or real estate sales within 30 days of the relevantconveyance’sexecution otherwise they - along with the seller - could be subject toafineashighas3percent ofthepurchaseprice.
However, Mr Morley reiterated that Bahamian realtors pay no part in closing a transaction as this work is conducted by attorneys. As a result, BREA and its members often do not know when a sale closes or the conveyance is executed, thereby exposing them to missing the 30-day reporting deadline and incurring a financial liability for something they are not responsible unless they monitorthedeal’sprogress.
Pointing out that, once theyputadealtogetherand pass a “signed offer letter” to an attorney, realtors have no role in the transaction until they receive their commission on closing, Mr Morley added: “We’re trying to assist them as much as possible. They
[the Department of Inland Revenue] have the ultimate hand in doing what they wanttodo.”
He explained that BREA has submitted alternatives to the tax authorities over the “trigger point” for when the clock starts running on the 30-day reporting deadline. Rather than use the date the conveyance is executed, the Association has suggestedmakingthiseither the date when the sales agreement is concluded or the date when the sale completesandtheyreceivetheir commission.
“We have them some good feedback on points like that,” Mr Morley said. “Wesaidthatifyou’resticking with 30 days from the conveyance, you’ll need to extend that to 90 days given thatattorneyshave180days [from the conveyance’s execution]topaytheVAT.
“How can they hold us liableforthatwhenwehave no way to control that? We have no control mechanism
to get that information. We want to have co-operation with them but they have to understand our role in real estatetransactions.”
As to the need for the guidance notes, he added: “I think they’re going to be extremely important. I know from the legal profession, the lawyer’s side of it, they’re also involved in deals with buyers getting mortgages from the banks. The banks interpret these things their own way, and lawyers have to work closely with the banks on mortgages.
“While they intend to collectasmuchVATaspossible, they cannot cripple the need to conduct real estate transactions with financing..... At this point, we’re just waiting to see what these guidance notes look like. I know things are in progress. Everybody’s trying to comply as much as they can right now, but it would be a lot more helpful if the guidance notes were put in place so people know whattodoandwhen.
“I’ve spoken to a couple of attorneys and everyone is being cautious right now. Most of them are saying there’s only another couple ofstepstheyhavetoinclude
in conveyancing work. For us, they’re trying to bring us into a situation we’ve never been involved with before. How’s it going to affect us and when? We’ve got to get there one step at a time,” MrMorleyadded. “Hopefully our discussions have been helpful. We’ve got to create that win-win situation; something that works for us and effectively for them [the Department of Inland Revenue]. They have every right to get paid. We want them to be paid, but let’s be fair.”
Morley Realty, in its analysis of data from BREA’s multiple listings system (MLS), which now includes 76 percent of the Association’s registered firms as members, said the three months to end-June 2025 had been “one of the strongest quarters” for sellers with New Providence homes on average achieving 93.3 percent of their asking price. “The list-to-sale price ratio stayed within a tight band but saw notable shifts. New Providence homes climbedto93.3percent,and land jumped to 95.9 percent, one of the strongest quarters for sellers. Grand
Bahama land also rose to 95.3 percent,” the firm said initsanalysis.
“Abaco and Eleuthera homes posted slight declines, while Exuma held at a strong 94.5 percent despite the small decline. Most sellers across the islands continued to receive offers close to the asking price. And, while new listings declined for a number of islands, New Providence saw quarter-over-quarter increases of 12.7 percent and 53.1 percent for homes and land coming on to the market,respectively.
“New listings declined across most markets this quarter. Exuma and Eleuthera saw the sharpest quarter-over-quarter drops, with Exuma home listings down 53.8 percent and Eleuthera homes down 20.5 percent. Abaco homes posted a modest 8.6 percent gain, and New Providence homes rose by 12.7 percent, indicatingstablesellerinterest in those areas,” Morley Realtyadded.
“However, land listings in nearly every market fell significantly - Exuma land fell 52.3 percent - highlighting a tightening of available inventoryinthatsegment.”
Only 15% of VAT liable owners paying due tax
DISCLOSE - from page B1
Government has long viewed the short-term vacation rental sector as a potentially rich new revenue source that is under-taxed, especially multi-million dollar foreign second homes whose ownersrentthemoutforup tofive-figureweeklysums.
Ms Strachan said that although most Bahamian homeowners misunderstoodthenoticeasanintent to tax them, the motivation to send it out was to identify undeclared shortterm rental properties so they could be added to the Department of Inland Revenue’sregister.
“Most Bahamians when they got the notice said: ‘Oh God, they’re trying to tax me’. But no, not really. You kind of got the notice because we are actively trying to determine who is renting property. Everybody who got the notice, it doesn’t mean that we’re
planning on taxing you because, on average, Bahamians do not pay taxes in the short-term vacation rental arena,” said Ms Strachan.
She highlighted that several factors prompted the notice to be sent out, and encouraged Bahamians to identify properties in their area that they suspect are being operated by foreign entities as short-term vacationrentals.
“If you’re a Bahamian and you got a notice, and you don’t have a short-term vacation rental property, that’s fine. It means that we knowthatthere’saproperty being rented somewhere on your corner, maybe, or somewhere in your vicinity, or maybe you have a property that has those new fancy key punches, you know, those new locks now - not key lock, but key punch locks,” said Ms Strachan.
“There’s several things that triggered us, and that
Licence applicants must have ‘suitable premises’
ALCOHOL - from page B1
Strachan explained that reforms to the Business Licence Act, enacted alongside the 2025-2026 Budget, “require that if you are applying for a new liquor licence, you have to apply for registration 90 daysprior”.
“If you already have a liquor business and you’re really only trying to renew your licence, you still have to come back to the Department of Inland Revenue and you have to apply againforregistration,orthe renewal of your registration,andIthinkthat’sgoing to be a major initiative, not only for the Department
of Inland Revenue, but the general public just needs to be mindful that there is this new step that has to be carried out prior to applying for Business Licence,” Ms Strachanadded. She said the Department of Inland Revenue will be taking the proximity of liquor stores to schools and churches into consideration, as well as the suitability of premises, when approving new applicationsandrenewals.
Highlighting the walk-up liquor stores in inner city New Providence that often attract a crowd being served through a “take-out window”, Ms Strachan said the tax authority is going
Eleuthera residents Back BPL alternative
PLAN - from page B3
cable.Maybeit’llcostabout $2m to either the Bluff, Eleuthera,orthroughJeans Bay, and that could be used asaback-up.
“As an example, like right now, if that was in place, that could have been aback-up.That’soneofthe planBs.TheotherPlanBis for somebody to take over because,15yearsago,Ihad brought a group to take over BPL Eleuthera, but we were turned down,” he added.
“I’m suggesting that to BPL. Maybe they can take the lead in terms of even having a Plan B. But I’m saying we cannot do anything without the Government’s approval. That’s the problem.” Mr Percentie said informal meetings were held about three or four years ago on such a move, but he is hoping it will still be considered as Eleuthera is still suffering fromutilitywoes.
“We’ve had several conversations over the years with St George’s Cay because obviously we are concerned about Harbour Island not receiving power, and the negative impact that it had on our businesses. So we met as an organisation, the Bahamas Harbour Island Hotel Association, met with St Georges on at least two occasions where I was present, exploring the possibility of them expanding into Harbour Island,” he added.
“Since then there have been informal meeting meetings about maybe three or four years ago, because the same problem continues. There’s still no resolution. We’re still looking for a Plan B. And we discussed the technical aspects. And, according to them,everythingisfavourableforustoutilisethatplan from the technical point of view. And it is something that can be done very
kind of give us clues that properties in a particular area are being rented. And so we’re asking for the our partners’ help - the Bahamian people. We’re asking for your help and just helping us to know who’s in the business of renting properties.
“And we’re hoping by doing that, we will really be able to expand the industry, help to incentivise the industry, of course, and to give benefits to those that want to participate in the industry of short term vacationrental.”
Ms Strachan added that foreigners on multiple Family Islands are operating short-term rentals without paying taxes, and asked Bahamians and residents for assistance in identifyingtheseproperties.
“If you are on an island, and you know only foreigners rent properties around here, then you need to help us make sure that they are paying the taxes
to be “very watchful” of such businesses as the Government cracks down on theproliferationofalcohol.
“The things that Inland Revenue is going to consider when we make the determination as to whether or not the registration certificate should be granted,we’regoingtoconsider the concentration of liquorstoresintheareathat you’re trying to open the liquor store in. Of course, the proximity to schools and places of worship, the suitability of the premises,” saidMsStrachan.
“We now have this new thing called the suitability of the premises. And I don’t know if you’re aware, there’s new some new types of businesses that opened since COVID. You have take-aways. So Bahamians are accustomed to lining
quickly, because it’s just a matter of laying cables and setting up a transformer to transmitit.
“What I meant by a Plan B, I meant some other options other than BPL, or a new strategy. Obviously, we’re still having the conversation. So the protest was, I guess, not effective, because otherwise something would have been done. And so that’s where we are. We need to do something else. This is not working, and it is negatively impacting businesses, homes, morale, everything, whatever you want to name.”
Former local government representative for the settlement of Current, Aldred Albury, backed the idea. He said he hopes there can beanagreementthatallows St George’s Cay Power and Light to aid in providing efficient and reliable power toEleuthera.
that are due to you. That’s your tax, right? They’re in your country, they need to pay the taxes. You have to pay it. I have to pay it. So we need to make sure that those non-Bahamians are paying their fair share,” saidMsStrachan.
“For emphasis, again, if you’re foreign, you have to pay VAT if you’re in that area.Bahamians,itdepends on the level of business that you’re involved in. We’re not looking for you to be registered [pay taxes] unlessyourturnoverisover $100,000 but everybody has to register in the short-term vacationportal.”
The Department of Inland Revenue, working with Avenu Insights, its US consultant, issued the letter that Bahamian property owners started to receive in late July as part of a review of “taxpayers’ compliance with the tax laws” of this nation. It made no distinction between Bahamians and foreign owners ofvacationrentals,andwho shouldpaytaxes.
The letter, which was obtainedbythisnewspaper, says the assessment’s “primarypurpose”istoidentify short-term vacation rentals
up to get food at a take-out window.
“But there’s some new things that came about where you line up and you go to a liquor store, and you’re getting served through a window. And so that’s something we’re going to be very watchful of. And you pay attention to that, because there are some new restrictions that may be enforced for those typesofbusinesses.”
Ms Strachan said the Department of Inland Revenue is “reasonable”, and existing liquor stores that fail the suitability requirements may be given a timeframe to modify their premises to ensure they meetthenewcriteria.
“The Department of Inland Revenue is reasonable. We’re reasonable in what we do. And let’s say,
that are either operating without a valid Business Licence or failing to levy, collect and remit VAT on the rent paid by tourists to thePublicTreasury. It added that those receiving the letter are being targeted because “a recent review” indicates they either own, and/or have advertised and listed, ashort-termvacationrental without it being registered with the Department of Inland Revenue and MinistryofFinance. Even those who have been targeted incorrectly, and do not own a short-term vacation rental property, were required to reply to the Department of Inland Revenue with “a written statement describing your circumstances”. Also, property owners who areregisteredandfullypaid up-to-date with their taxes, now have to submit proof of this to the tax collection agency. Persons who are noncompliant are being given just seven business days to complete the registration process.Theywillalsohave to provide a copy of their rentalagreement;realproperty tax certificate; and a
for instance, you already havealiquorestablishment, but we now deem your premises unsuitable and so we’re not going to register you. I don’t know what that’s going to look like. It probably will look like us going through a period of consultation: Can you amend your premises to make it suitable,” said Ms Strachan.
“But in any event, the Department of Inland Revenue has strict guidelines to follow,whichwewillfollow. We have no choice, and once we follow them, if a decisionisgivenandit’snot a decision that the business owner can accept, there’s a wholeprocessofappeal”
Ms Strachan said that, beginning next month, lists of liquor stores wishing to obtain a Business License will be published and
“I did hear at one point that there was a suggestion of running a cable from St George’s Cay Power and Light to the northern end of Eleuthera for electricity purposes,” Mr Albury said.“However,StGeorge’s Cay Power wanted to be in charge of the entire thing, including collecting the revenue payments. And that was not something the Government was willing to turnover.
“consent letter” from their community’s developer or copy of its “ordinance”. The latter is likely designed to check compliance with zoningregulations. As with the recent boating fees controversy, The Bahamas has a sovereign right to determine who, where and how it taxes and set the rates accordingly. Some have also blamed short-term vacation rentals for creating shortages of local housing, especially long-term rentals and particularly in the Family Islands, as landlords opt for the greater yields available fromtourists. Thisisalsoseenashaving driven up long-term rental rates and priced Bahamians outofthemarket.However, there have also been calls for a balanced approach amid fears that the Government, in its desire to attract more revenue from short-term vacation rentals, could over-tax visitors and owners and, in so doing, shrink a valuable tourism market segment that helps to spread tourism dollars at much lower community level.
existing licence holders will beregistered.
“We’re going to engage theregistrationprocess,but definitely, as of September, we’re going to start publishing this because what we’re going to try and do is get ahead of the 2026 registration period. There are thousands, of liquor businesses overall in the country.Andit’snotjustfor New Providence, it’s country-wide. The businesses that are licensed already, the first thing that we need todoisnowregisterthem,” saidMsStrachan
“You will begin to see the Department of Inland Revenue publishing lists to get feedback from the public as soon as the beginning of next month. And so it’s already in process. It’s already enacted, and so it’s beingcarriedoutnow.”
“So that was, I heard, where the deal fell through. I’m not sure exactly how much of that is factual. But Ibelieveiftheycancometo someagreement,whetherit be through a memorandum of understanding or something of the such where BPL can purchase the electricity from them in the event that need be, and provide it to the customers in North Eleuthera, that would also be an avenue that I believe they should lookat.”
CAREER OPPORTUNITY
MAINTENANCE WORKER
Job Description:
• General Handyman for Vacation Property Rentals dealing with basic painting, carpentry, plumping tasks on a day-to-day basis.
• General Property Manager for Property Owners Association doing daily property walkthroughs and weekly reports. Performing maintenance works in addition to allocating other staff to assist in required repairs.
GENERAL TASKS:
• You will be expected to be versatile with multiple duties and responsibilities, including but not limited to:
• Carpentry: installing cabinets, doors, countertops and flooring including tiles, carpets or other hardwood and laminate coverings.
• Roofing: identifying and repairing the source of leaks, removing dirt and debris from guttering, replacing shingles and improving insulation to prevent heat loss.
• Plumbing: while you don’t have the expertise to fix complex issues, you can resolve basic problems such as installing new taps, sinks and toilets, and repairing leaks.
• Decorating: painting walls and ceilings, touching up skirting boards and door frames, sanding floors and other wooden surfaces. EMAIL: hr@palmcay.com
Nassau to Chicago route sees 28% volume surge
FLIGHT - from page B1
TheGovernor’sHarbourbased resort also pledged to pay staff up until August 18, 2025, plus provide pay in lieu of notice and continue their health insurance benefits and coverage with AtlanticMedicalthroughto theendofAugust2025.
impactedwasunlikelytobe many.ManyEleutheraresidents told this newspaper they were unaware of the restaurantclosure.
28 percent during the 2025 firsthalf.
“This has been an annual seasonal suspension or reduction of service towards non-peak season at the end of August and returning mid-October,”
arrivalsyear-to-dateremain on par with 2019 and 2024 performances.
Efforts to determine how many employees are being furloughedprovedfruitless. TribuneBusiness mademultiple unsuccessful attempts this week to contact Ms Khan-Francis for comment, while a voice mail left with Shaner Group, the French Leave owner, was also not returned. The French Leave is part of Marriott’s Autograph collection of hotels.
Howard Thompson, the Government’s director of labour, was off-island this week but he indicated in a brief messaged reply that hehadbeenmadeawareof theFrenchLeavefurloughs. Hesuggestedthatgiventhe resort’s niche, boutique size the number of employees
Trump opens the door for private equity and crypto as 401(k) retirement plan options
By KEN SWEET AP Business Writer
MILLIONS of Americans saving for retirement through 401(k) accounts could have the option of putting their money in higher-risk private equity and cryptocurrency investments, according to an executive order signed Thursday by President Donald Trump that could give those financial players long-soughtaccesstoapool offundsworthtrillions.
There is no immediate change in how people invest part of their work earnings. Federal agencies would need to rewrite rules and regulations to allow the expanded choices, and that would take months or moretocomplete.Butonce done,employerscouldoffer a broader array of mutual funds and investments to workers, according to the White House. New plans could invest in alternative assets, particularly private equity, cryptocurrencies andrealestate.
The Republican president's order directs the Labor Department and other agencies to redefine whatwouldbeconsidereda
qualifiedassetunder401(k) retirementrules. Americans' retirement plansaregovernedbyalaw known as the Employee Retirement Income Security Act of 1974, better known as ERISA. Employers are required by law to offer retirement options that are in the best interest of their employees, not Wall Street. Most retirement plans for Americans are made up of stock and bond investments, and to a much lesser extent, cash and heavily traded commoditiessuchasgold.
Trump's move rewards both the $5 trillion private equity industry, which for decades has wanted to compete for a role in retirement plans, and the cryptocurrency industry, whose executives strongly supported Trump's 2024 campaign as they aimed for more mainstream acceptanceamongAmericans. The price of bitcoin was up 2% on Thursday to $116,542 and has nearly doubled since Trump was elected.
Under Democratic President Joe Biden, federal regulators were to treat cryptocurrency investments with "extreme care"
because of the extreme volatility of crypto. It is not uncommon for bitcoin, ethereum and other big cryptocurrencies to move up or down 10% in a single day, whereas a 2% or 3% single-day move in the stockmarketwouldbeconsideredhistoric.
For cryptocurrency companies, which donated millions to Trump's campaign as well as his inauguration, one goal was to get their industry qualified under ERISA.
Coinbase, one of the largest crypto companies in the United States, was also a major donor toward Trump's military parade in Washington this summer.
Under Trump, the Securities and Exchange Commission dropped its lawsuit against Coinbase, where the Biden administration said crypto should betreatedasasecurity.
Crypto is particularly popular among young Americans. While volatile, bitcoinhasgenerallymoved upward since it was created by an anonymous programmernearly20yearsago.
"It was inevitable that bitcoin would make its way into American 401(k)'s," said Cory Klippsten, the
Elsewhere, Dr Kenneth Romer, the Government’s aviation director, told Tribune Business that suggestions United Airlines has halted its direct service fromNassautoChicagoare incorrect. Explaining that the carrier is set to initiate its traditional pause during theslowestpartofthetourism season, he added that passenger volumes on the route increased by almost
Dr Romer, also the deputy director-general of tourism, told Tribune Business via messagedreply.
“Chicago has been a strong performer. In fact, between January and June 2025, passenger volume from Chicago to Nassau increased 27.9 percent over 2024, and 24.5 percent over 2019. Overall, foreign air
“United Airlines, like many of the other air carriers, expected to be ramping up frequency and seat capacity in the fourth quarter. That will lead to another anticipated strong performance for the destination. We continue to work closely with our airline partners to attract new airlift and expand existing airlift to put butts in seats, and heads in bed, that translate into monies into the pockets of our local community.”
CEO of Swan Bitcoin.
"As fiduciaries realize bitcoin's risk-adjusted upside over the long term, we'll see growing allocations, especially from younger, tech-savvy workers who wanthardmoney,notmeltingicecubes."
Private equity firms rely heavily on high-net-worth individuals and state and private pension plans, which have extremely long investment timelines. But having access to Americans' retirement assets would open up a deep pool ofcash.
Blackstone CEO Steve Schwarzmanhastoldinvestors going back to at least 2017 that it was a "dream" of his and the industry to be able to draw upon these retirement assets. Previous administrations, Republican and Democrat, have agreed that private equity investments, which can be riskier, more expensive and less liquid than traditional stock and bond market
mutualfunds,shouldnotbe includedin401(k)plans.
The average historic annual return on private equity assets going back to 1990 is roughly 13%, net of fees, according to Cambridge Associates. The S&P 500 index has had an approximate annual return, including dividends, of roughly 10.6% in the same period of time. However, private equity assets tend to be locked up for years, because the companies underlying the assets have to be sold on the private market, making them highly illiquid compared to stocks,whichcanbesoldin aday.
"We look forward to working with the Trump Administration on a thoughtful framework that expands access to alternatives for retirement savers, offering Americans more diversification and investment options with appropriate investor guardrails," said Bryan Corbett,
the president and CEO of the Managed Funds Association, which is the trade groupfortheprivateequity industry.
Even after the regulations are written, it will take time for major retirement plan companies, such as Fidelity, Vanguard, T. Rowe Price, and others, to develop appropriate funds foremployerstouse.
Employers are unlikely to revise their retirement plan options quickly, so it may take several years before crypto and private equity investments become mainstream in an individual'sretirementplan.
"While Vanguard has not committed to launching a product for defined contribution plans, Vanguard is dedicated to educating retirement investors to ensure a clear understandingoftheopportunitiesand risks of investing in private assets,"thecompanysaidin astatement.
EPA CANCELS $7 BILLION BIDEN-ERA GRANT PROGRAM TO BOOST SOLAR ENERGY
By ALEXA ST. JOHN and MATTHEW DALY Associated Press
THE Environmental Protection Agency on Thursday terminated a $7 billion grant program intended to help pay for residentialsolarprojectsfor more than 900,000 lowerincome U.S. households, in the latest Trump administration move hindering the nation's shift to cleaner energy.
The funding, part of the Biden-era's Solar for All program, was awarded to 60 recipients including
states, tribes and regions for investments such as rooftop solar and community solar gardens. Solar, a renewable energy, is widely regarded as a way to introduce cleaner power onto theelectricalgridandlower energy bills for American consumers.
Under Republican President Donald Trump, officials have pursued dozens of deregulatory measures related to federal rules intended to protect clean air and water. Last week, the EPA proposed rescinding the agency's
"endangerment finding" which serves as the scientific and legal basis for regulating planet-warming greenhousegasemissions. The administration has taken steps to bolster fossil fuels such as coal, oil and natural gas as it pursues American "energy dominanceintheglobalmarket. EPA Administrator Lee Zeldin said in a statement on social media that authority for the solar program was eliminated under the tax-and-spending law signed by Trump last month.
PRESIDENT Donald Trump speaks with reporters before boarding Air Force One at Lehigh Valley International Airport, Sunday, Aug. 3, 2025, in Allentown, Pa. Photo:Julia Demaree Nikhinson/AP
Trump's planned 100% computer chip tariff sparks confusion among businesses and trading partners
By MATT O'BRIEN and MAE ANDERSON AP Business Writers
PRESIDENT Donald Trump's ambiguous plans for 100% tariffs on computer chips that aren't made in the U.S. are stoking confusion among businesses and trading partners — boosting stocks for leading semiconductor companies while leaving smaller producers scrambling to understand the implications.
"We are still waiting for official guidance," said Limor Fried, founder and engineer at Adafruit Industries, a small electronics makerinNewYork.
The chips that go into Adafruit's products come through U.S. sales and distribution companies as well asdirectfromcompaniesin thePhilippinesandTaiwan.
If those chips aren't exempt from tariffs, "it would increase the costs that go into our designs as the semiconductors are the most expensive component in our assemblies," Fried said. "For many of these tariffs, we often have to wait until we get a bill to know our exposure, and then we adjust our pricing to account for the increases."
The U.S. imports a relativelysmallnumberofchips because most of the foreign-made chips in a device — from an iPhone to a car — were already assembled into a product, or part of a
product, before it landed in thecountry.
"The real question everybody in the industry is asking is whether there will be a component tariff, where the chips in a device would require some sort of separate tariff calculation," said Martin Chorzempa, a senior fellow at the PetersonInstituteforInternationalEconomics.
Trump said Wednesday that companies that "made a commitment to build" in the U.S. would be spared the import tax, even if they are not yet producing those chipsinAmericanfactories. "We'll be putting a tariff of approximately 100% on chips and semiconductors," Trump said in the Oval
Office while meeting with Apple CEO Tim Cook. "But if you're building in the United States of America,there'snocharge."
Wall Street investors interpreted that as good news not just for U.S. companies like Intel and Nvidia, but also for the biggest Asian chipmakers like Samsung and Taiwan Semiconductor Manufacturing Company that have been working to build U.S. factories.
But it left greater uncertainty for smaller chipmakers in Europe and Asia that have little exposure to the artificial intelligence boom but still make semiconductors inserted into essential
products like cars or washingmachines.
German chipmaker Infineon Technologies, which supplies chips to the auto industry, said in an emailed statement Thursday that it "can't speculate about potential semiconductor tariffs" and Trump's announcement, "as no official documents have been publishedatthispoint."
These producers "probably aren't large enough to get on the map for an exemption and quite probably wouldn't have the kind of excess capital and margins to be able to add investment at a large scale into the United States," Chorzempasaid.
It'salsonotclearhowthe chip-specific tariffs would apply to trading partners that already made broader dealswithTrump—suchas agreements with the European Union, Japan and South Korea that tax most goodsat15%.
A trade group, the Semiconductor Industry Association, said Thursday it was "eager to learn more" about the planned chip tariffs, "including the scope and structure of exemptions."
The announcement came more than three months after Trump temporarily exempted most electronics from his administration's mostoneroustariffs.
During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to higher inflation.
Chorzempa said chip tariffs could again raise prices by hundreds of dollars per vehicle if the semiconductors inside a car are not exempt.
By MATT O'BRIEN AP Technology Writer
OPENAI on Thursday releasedthefifthgeneration of the artificial intelligence technology that powers ChatGPT,aproductupdate that'sbeingcloselywatched as a measure of whether generative AI is advancing rapidlyorhittingaplateau.
GPT-5 arrives more than two years after the March 2023 release of GPT-4, bookending a period of intense commercial investment, hype and worry over AI'scapabilities.
In anticipation, rival Anthropic released the latest version of its own chatbot, Claude, earlier in theweek,partofaracewith Google and other competitors in the U.S. and China to leapfrog each other on AI benchmarks. Meanwhile, longtime OpenAI partner Microsoft said it will incorporate GPT-5
into its own AI assistant, Copilot.
Expectations are high for the newest version of OpenAI's flagship model because the San Francisco company has long positioned its technical advancements as a path toward artificial general intelligence,orAGI,atechnology that is supposed to surpass humans at economicallyvaluablework.
It is also trying to raise huge amounts of money to get there, in part to pay for the costly computer chips and data centers needed to build and run the technology. OpenAI CEO Sam Altman described the new model as a "significant step alongourpathtoAGI"but mostlyfocusedonitsusabilitytothe700millionpeople he says use ChatGPT each week.
"It's like talking to an expert—alegitimatePhDlevel expert in anything,
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 8th day of August 2025 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147,Nassau,NewProvidence,TheBahamas.
any area you need, on demand," Altman said at a launch event livestreamed Thursday.
It may take some time to seehowpeopleusethenew model — now available, withusagelimits,toanyone with a free ChatGPT account. The Thursday event focused heavily on ChatGPT's use in coding, an area where Anthropic is seen as a leader, and featuredaguestappearanceby theCEOofcodingsoftware makerCursor,animportant Anthropiccustomer.
OpenAI's presenters also spent time talking about safety improvements to make the chatbot "less deceptive" and stop it from producing harmful responses to "cleverly worded"promptsthatcould bypass its guardrails. The Associated Press reported Wednesday on a study that showed ChatGPT was providing dangerous
information about drugs and self-harm to researchersposingasteenagers.
At a technical level, GPT-5 shows "modest but significant improvements" on the latest benchmarks, but when compared to GPT-4, it also looks very different and resets OpenAI's flagship technology in a way that could set the stage for future innovations, said John Thickstun, an assistant professor of computerscienceatCornell University.
"I'm not a believer that it'stheendofworkandthat AI is just going to solve all humanity's problems for it, but I do think there's still a lot of headroom for them, and other people in this space, to continue to improve the technology," he said. "Not just capitalizing on the gains that have alreadybeenmade."
OpenAI started in 2015 as a nonprofit research
M3 INVESTMENTS LTD.
Incorporated under the International Business Companies Act, 2000 of the Commonwealth of The Bahamas. Registration number 205338 B (In Voluntary Liquidation)
Notice is hereby given that the above-named Company is in dissolution, commencing on the 7th day of August A.D. 2025.
Articles of Dissolution have been duly registered by the Registrar. The Liquidator is MRS. MELISSA MUNARI MAGNUS, whose address is Rua da Marta, 194 Apto 5, CEP: 04531-020, São Paulo, SP, Brazil. Any Persons having a Claim against the above-named Company are required on or before the 6th day of September A.D. 2025 to send their names, addresses and particulars of their debts or claims to the Liquidator
Much of the investment into building U.S. chip factories began with the bipartisan CHIPS and ScienceActthatPresidentJoe Biden signed into law in 2022, providing more than $50 billion to support new computer chip plants, fund research and train workers fortheindustry.
Trump has vocally opposed those financial incentives and taken a different approach, betting that the threat of dramatically higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for electronics.
Trump's announcement could be a signal for other chipmakers to imitate the investments that companies like South Korea's Samsung are making, said Long Le, a business professor at SantaClaraUniversity.
But with China's SMIC and Huawei unlikely to be exempted, it could also give the Trump administration "more leverage at the trading table" ahead of an upcoming deal with China, hesaid.
"There's a chip that allows you to open and close the window," Chorzempa said. "There's a chip that is running the entertainment system. There is a chip that's kind of running all the electronics. There are chips, especially in EVs, that are doing power management, allthatkindofstuff."
laboratory to safely build AGIandhassinceincorporated a for-profit company with a valuation that has grown to $300 billion. The company has tried to change its structure since the nonprofit board ousted Altman in November 2023. He was reinstated days later. It has not yet reported making a profit but has run into hurdles escaping its nonprofit roots, including
scrutiny from the attorneys general in California and Delaware, who have oversight of nonprofits, and a lawsuit by Elon Musk, an early donor to and founder of OpenAI who now runs hisownAIcompany. Most recently, OpenAI has said it will turn its for-profit company into a public benefit corporation, which must balance the interests of shareholders anditsmission.
PRESIDENT Donald Trump pauses while speaking during an announcement about Apple with Apple CEO Tim Cook in the Oval Office, Wednesday, Aug. 6, 2025, in Washington.
Photo:Alex Brandon/AP
JUDGE PARKER
CARPE DIEM
INTEL'S STOCK TUMBLES AFTER TRUMP SAYS ITS CEO MUST RESIGN
By MICHELLE CHAPMAN, DAVID KLEPPER and DIDI TANG AssociatedPress
SHARES of Intel
slumped Thursday after President Donald Trump said in a social media post that the chipmaker's CEO needstoresign.
"The CEO of Intel is highly CONFLICTED and must resign, immediately," Trump posted on Truth Social. "There is no other solution to this problem. Thank you for your attentiontothisproblem!"
Trump made the post after Sen. Tom Cotton sent a letter to Intel Chairman Frank Yeary expressing concern over CEO Lip-Bu Tan's investments and ties to semiconductor firms that are reportedly linked to the Chinese Communist Party andthePeople'sLiberation Army, and asked the board whether Tan had divested his interests in these companies to eliminate any conflictsofinterest.
It'snotimmediatelyclear if Tan, who took over as Intel's CEO in March, has divested his interests in the companies.
In a statement, Intel said it's "deeply committed to advancingU.S.nationaland economic security interests and are making significant investments aligned with the President's America Firstagenda."
"In March 2025, Intel appointed Lip-Bu Tan as its new CEO," Cotton wroteintheletter."Mr.Tan reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms. At least eight of these companies reportedly have ties to the Chinese People's LiberationArmy."
Cotton specifically called out Tan's recent leadership of Cadence Design Systems in the letter. According to the U.S. Department of Justice, Cadence, in July, agreed to plead guilty to resolve charges that it violated export controls rules to sell hardware and software to China's National University of Defense Technology, which is linked to the Chinese military. Tan was the CEO of Cadence when the company violated the rules between 2015 and 2021.
The U.S. Department of Commerce's Bureau of
Industry and Security also fined Candence $95 million for the same breaches, saying Cadence admitted that "employees of its Chinese subsidiary knowingly transferred sensitive U.S. technology to entities that develop supercomputers in support of China's military modernization and nuclear weaponsprograms."
Cadence did not immediately respond to AP requests.
Tan previously launched the venture capital firm Walden International in 1987 to focus on funding tech start-ups, including chip makers. China's state media has described Tan as "actively" devoted to Chinese and Asian markets, having invested not only in the Taiwan Semiconductor Manufacturing Company but also China's state-owned enterprise SMIC, which seeks to advance China's chipmakingcapabilities.
The demands made by Trump and Cotton come as economic and political rivalries between the U.S. and China increasingly focus on the competition over chips, AI and other digital technologies that expertssaywillshapefuture
Closure of Midwest-based newspaper chain leaves dozens of communities without a news source
By SARAH RAZA and JACK DURA AssociatedPress
DOZENS of communities in the Midwest and WestlearnedThursdaythey had lost their newspapers after an Illinois-based publisher announced it would abruptly close because of financialproblems.
News Media Corp., which owns local newspapers across five states, said it will close 14 operations in Wyoming, seven in Illinois, five in Arizona, four inSouthDakotaandonein Nebraska.
Touting itself as "the voice of small town America," NMC's closure affects longtime newspapers that were often the primary sourceofnewsinnumerous small towns, worsening the problem of news deserts in ruralareas.
The closure follows a decades-long pattern of financial challenges for local newspapers — the U.S. has lost over one-third of its print newspapers and two-thirds of its newspaper journalists since 2004 as the newsmediahasstruggledto adopt to a changing readershipandrevenuelandscape, according to the Medill Local News Initiative at NorthwesternUniversity.
"Unfortunately, due to financial challenges, a significanteconomicdownturn impacting our industry, revenue losses and increasing expenses, and the recent failure of an attempt to sell the company as a going concern, we have reached a point where continuing business is no longer feasible," company CEO J.J. Tompkins wrote in a letter tostaffWednesday.
News Media Corp. is basedinRochelle,Illinois.
Hundreds of employees were terminated
immediately, and Tompkins wrotethatthecompanywill make "reasonable efforts to pay you all remaining compensation you have earned."
Stafftooktosocialmedia to express their shock and disappointmentatthenews.
"No one in Huron, nor any of the other papers, knew this was coming today," Benjamin Chase, managing editor of the Huron Plainsman in South Dakota, said in a social media post. "We're all in shock and attempting to figure out how to move forward."
Josh Linehan, managing editor of the Brookings Register in South Dakota, wrote in a letter to readers, "It's no secret that it's toughtimesoutthereforall print media, and we're no exception."
He added, "But make no mistake — we're closed for now as a result of poor corporatemanagement."
News Media Corp. did not return a request for comment.
Brookings Mayor Ope Niemeyer said the closure of his town's newspaper "absolutely" leaves a big hole in the community. He said it's devastating for the newspaper's employees and disadvantages the city, County Commission and otherlocalboardsthatused the newspaper for legal notices.
Less than a year ago, Brookings lost the news on itslocalradiostation,which leftjustthenewspaper,now gone,hesaid. "Obviously we all have websites and Facebook and LinkedIn and Instagram and all that, but there's a generation that doesn't use that," said Niemeyer, who at 65 prefers a printed newspaper.
economies and military conflicts.
Cotton, the chairman of the Senate Intelligence Committee, has raised concerns that Chinese spies could be working at tech companies and defense contractors, using their positions to steal secrets or plant digital backdoors that give China access to classifiedsystemsandnetworks.
On Thursday the Arkansas Republican wrote to the Department of Defense urging Defense Secrectary Pete Hegseth to ban all non-U.S. citizens from jobs allowing them to access DoD networks. He has also demanded an investigation into Chinese citizens workingfordefensecontractors.
"The U.S. government recognizes that China's cyber capabilities pose one of the most aggressive and dangerous threats to the
"It brings the community together," the mayor said. "It's an entity that's going tobeirreplaceable."
He liked the newspaper's commentary for fostering conversations. The reporters did a great job telling readers what was going on inBrookings,acityofabout 25,000people,hesaid.
Thereasonsbehindnewspaperclosuresarecomplex, with multiple factors at play, said Teri Finneman, a professor at the University of Kansas' journalism schoolandpublisherofThe Eudora Times. The newspaper industry is using a business model that is two centuriesoldandunsustainablein2025,shesaid.
United States, as evidenced byinfiltrationofourcritical infrastructure, telecommunications networks, and supply chains," Cotton wrote in an earlier letter calling on the Pentagon to conducttheinvestigation.
National security officials havelinkedChina'sgovernment to hacking campaigns targeting prominent Americans and critical U.S. systems.
"U.S. companies who receive government grants should be responsible stewardsoftaxpayerdollarsand adheretostrictsecurityregulations," Cotton wrote on thesocialplatformX.
Intel had been a beneficiary of the Biden administration's CHIPS Act,receivingmorethan$8 billion in federal funding to build computer chip plants aroundthecountry.
The public also has greater reluctance to pay for local news, too few subscribers are paying too low rates and a lack of social cohesionintheU.S.hasled to fracturing and mistrust in news, Finneman said. This has been coupled with declining populations in many rural areas and corporateownershipthatoften is unfamiliar with running suchpapers,shesaid.
"Thisreallyneedstobea wake-up call to every town
Shares of the California company slid 3.5%, while markets, particularly the tech-heavy Nasdaq, gained ground.
Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobilecomputingtriggered by Apple's 2007 release of the iPhone, and it's lagged more nimble chipmakers. Intel's troubles have been magnified since the advent of artificial intelligence — a booming field where the chips made by once-smaller rival Nvidia have become tech'shottestcommodity.
Intel is shedding thousands of workers and cutting expenses — including some domestic semiconductor manufacturing capabilities — as Tan tries to revive the fortunes ofthestrugglingchipmaker.
in this nation that your newspaper could be at risk as well and it is incumbent upon people to start supporting their newspapers through subscriptions and through advertising if we are going to keep critical news in these communities,"Finnemansaid. On Thursday, the Sioux Falls-based Dakota Scout newspaper said it plans to expand coverage in Brookings in response to the closures.
Wall Street drifts as stock markets worldwide take Trump’s new tariffs in stride
By STAN CHOE AP Business Writer
U.S. stocks drifted to a mixed finish on Thursday as President Donald Trump'stariffstakingeffect on dozens of countries had only a muted effect on marketsworldwide.
The S&P 500 slipped 0.1% after briefly climbing to the cusp of its all-time high during the morning. The Dow Jones Industrial Average dropped 224 points, or 0.5%, and the Nasdaq composite rose 0.3%toarecord.
Worries are high that Trump's tariffs are damaging the economy, particularlyafterlastweek's worse-than-expected report on the job market. But hopes for coming cuts to interest rates by the Federal Reserve and a torrent of stronger-than-expected profit reports from big U.S. companies are helping to offset the concerns, at least fornow.
Lower interest rates can give the economy and investment prices a boost, though the downside is that they can also push inflation
higher. The Bank of England cut its main interest rate on Thursday in hopes of bolstering the sluggish U.K.economy. The U.S. tariffs that took effect Thursday morning were already well known, as well as lower than what Trump had initially threatened. Some countries are still trying to negotiate down the tax rates on their exports, and continued uncertainty seems to be the only certainty on Wall Street. All the while, the U.S.stockmarketfacescriticism that it's climbed too far, too fast since hitting a bottom in April, with prices lookingtooexpensive.
On Wall Street, worries about tariffs helped drag downthestockofCrocs.
Thefootwearmakertumbled 29.2% even though it reported a stronger profit for the latest quarter than analysts expected. It said it expects revenue to drop as much as 11% in the current quarter from a year earlier, while tariffs are dragging on its profitability. The company cited "continued uncertainty from evolving global trade policy and
related pressures around theconsumer."
Eli Lilly dropped 14.1% even though the drugmaker likewisereportedastronger profit for the latest quarter than analysts expected. Analysts said some investors were disappointed with results that Lilly provided for a late-stage study of its potential pill version of the popular weight-loss drug Zepbound.
Intel sank 3.1% after Trump called for its CEO to resign, while accusing
him of being "highly CONFLICTED," though he gavenoevidence.
Apple helped keep the market's losses in check, as it rose on hopes that its massive size can help it navigate Trump's economy.
Itsstockclimbed3.2%after CEO Tim Cook joined Trump at the White House on Wednesday to say it's increasing its investment in U.S. manufacturing by an additional $100 billion over thenextfouryears.
Trump also announced a 100% tariff on imported computer chips, but he added "if you're building in the United States of America,there'snocharge." "Large, cash-rich companies that can afford to buildinAmericawillbethe ones to benefit the most," said Brian Jacobsen, chief economistatAnnexWealth Management. "It's survival ofthebiggest."
DoorDash added 5% after the delivery app topped Wall Street's profit expectations for the latest quarter. It attracted new customers and saw the total numberofordersincrease.
Duolingo, the languagelearning app, jumped 13.7% after it crushed Wall Street's expectations. The company said its subscription revenue grew 46% over the same period last year.
All told the S&P 500 edged down by 5.06 points to 6,340.00. The Dow Jones Industrial Average dipped 224.48 to 43,968.64, and the Nasdaq composite rose 73.27to21,242.70.
THE WEATHER REPORT
In stock markets abroad, indexesroseacrossmuchof EuropeandAsia.
Stocks climbed 0.2% in Shanghaiand0.7%inHong Kong after China reported that its exports picked up in July, helped by a flurry of shipments as businesses took advantage of a pause in Trump's tariff war with Beijing.
Japan's Nikkei 225 rose 0.6%. Toyota Motor's stock fell after it cut its full-year earnings forecasts largely because of Trump's tariffs, but Sony rose after the entertainmentandelectronics company indicated it's takinglessdamagefromthe tariffsthanithadexpected. In the bond market, the yield on the 10-year Treasury rose to 4.23% from 4.22% late Wednesday after the latest reports on the U.S. economy came in mixed.
One said that slightly more U.S. workers applied for unemployment benefits lastweek.
That could be an indicationofrisinglayoffs,butthe number remains within its recentrange.
TRADERS work on the floor of the New York Stock Exchange, Friday, Aug. 1, 2025, in New York. Photo:Yuki Iwamura/AP
