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MONDAY, NOVEMBER 1, 2021
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VAT cut’s ‘modest’ jobs, growth effect By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net CUTTING the VAT rate to 10 percent will cause “only slight improvement” in job creation and economic growth, a University of the Bahamas (UoB) study asserts, while advocating it still “be pursued’. The report, prepared by the university’s Public Policy Institute for the Ministry of Finance, also warned that the two percentage point cut planned by the Davis administration would worsen key fiscal indicators such as the fiscal deficit and debt-toGDP ratio. Adding that the tax cut would have no impact on reducing income inequality in Bahamian society, it
• UoB study warns on fiscal impact but says ‘pursue’ • Super Value chief backs 10%; impact to ‘balance out’ • Economy needs to grow 5% annually in next decade called for “compensating tax revenue initiatives” to offset the reduction in VAT revenue caused by slashing the rate from the existing 12 percent to 10 percent. However, no such measures have been announced by the new government. “Following a special request by the Ministry of Finance, a simulation exercise was carried out for changing the VAT rate,” the UoB report, part of
the former administration’s Bahamas Recovery and Sustainable Growth Project, said. “The simulations advanced a reduction of the VAT rate from 12 percent to 10 percent (scenario 19), and a VAT rate increase from 12 percent to 14 percent (scenario 20). “The objective of the simulation exercise was to estimate the implications for the economy, specifically the value-added real GDP, fiscal surplus/deficit,
debt-to-GDP, current account, inflation, unemployment, poverty level and GINI index.” The latter measures income and wealth inequality, and the study continued: “It was found that reducing the VAT rate by two percentage points, from 12 percent to 10 percent, shows only slight improvements in the real GDP, unemployment rates, prices and poverty levels. “There is, however, a worsening of the current account, the fiscal deficit and the debt-to-GDP ratio. There is no change to the GINI ratio. If the priority is to benefit the economy, if only slightly, the VAT reduction should be pursued.
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Gov’t urged: Fix price control approvals fast By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net SUPER Value’s principal is urging the Government to provide “instant” price control approvals to minimise cost of living increases, inventory loss and general supply chain disruption. Describing it as “a 50-year antiquated system that needs to be abolished”, Rupert Roberts told Tribune Business that the long wait to receive the go-ahead for price changes needs to “be fixed fast” given how rapidly costs and product availability are
RUPERT ROBERTS changing amid the global supply chain crisis. Revealing that permission for changes to price-controlled items is presently taking three weeks “at a
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Red Lobster franchise eyeing spin-off brand By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE franchise group responsible for bringing Red Lobster to The Bahamas is planning to launch a “smaller footprint” chain of seafood restaurants in this nation in 2022. Chris Mortimer, principal of Pinnacle Franchise Brands, which is the first Bahamas-based entity to successfully raise its target equity capital via a formal crowdfunding platform, told Tribune Business it plans to roll-out a take-out/delivery concept called Crustacean around the same time its first Red Lobster outlets open. “It’s smaller footprint, smaller location and allows us to be in a number of
locations where larger sitdown restaurants will not be able to go,” he explained of Crustacean. “It will be a take-out/delivery concept. We expect we’re going roll this out in those areas. There are a number of locations we are looking at. “We’re going to be developing that brand with Red Lobster. You should see them in other locations other than New Providence. We believe there are a few opportunities.” Mr Mortimer did not provide any specifics on Crustacean locations, the number of jobs that will be created or the investment involved when asked by this newspaper. He did, though, confirm that it will have a
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Insurers warn that VAT reversal ‘totally asinine’ By NEIL HARTNELL Tribune Business Editor nhartnell@ tribunemedia.net INSURERS have warned the Government it would be “totally asinine” to reintroduce VAT on residential homeowner premiums given that this will create a multi-million dollar hurricane liability for itself. Anton Saunders, RoyalStar Assurance’s managing director, told Tribune Business that the industry is seeking a meeting with the newly-elected Davis administration to clarify its VAT treatment of this product given that it potentially threatens to unravel a previous agreement it took both sides three years to negotiate. He spoke out amid significant confusion over the Government’s plans as it moves to slash the VAT rate to 10 percent by January 1, 2022. Michael Halkitis,
minister of economic affairs, last week said medical/health insurance will again be made VATable but Mr Saunders said this already attracted the levy - and only residential homeowners insurance is currently treated as VAT-exempt. The RoyalStar chief said if the exemption was removed it would potentially expose the Government to multimillion dollar VAT refunds payable to insurers on hurricane-related claims, something that the cash-strapped Public Treasury can ill-afford at this time. He noted that Ryan Pinder, the attorney general, would be well aware of these issues given that he was one of the lawyers who helped negotiate the current settlement on the industry’s behalf before being appointed to the Davis Cabinet. “The Government has not approached the
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REVIVE THE NATIONAL DEVELOPMENT PLAN By RODERICK A. SIMMS II Advocate for Family Island growth E-mail: RASII@ME.com
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he COVID-19 pandemic has generated uncertainty around the fate of economic and social development in The Bahamas. While these uncertainties present unique opportunities for growth, having growth plans already in place is be one of the most effective ways to help countries recover from the pandemic’s devastating fallout. There is no doubt that the newly-elected Davis administration has its work cut out, but one silver lining is the National Development Plan’s (NDP) existence. The plan was originally crafted under the Christie administration, and each inhabited island has its own version. But little has been said in recent years about the execution of the plan’s recommended actions. As the global economy
struggles to recover, the Bahamas’ NDP is an essential tool in helping to get a grip on the present - and upcoming - challenges posed by the COVID-19 pandemic. It is also time for the plan to perhaps be improved given the lessons learnt from various industry responses. The plan is a sound starting point, and provides methods and targets to improve areas such as food sovereignty, education, healthcare, tourism and digital services. Commitment to the Bahamian people The NDP shows a true form of commitment to the Bahamian people. Kneejerk decisions are often made in response to crises. While some crises can be predicted, the magnitude is often unforeseeable. As a result of Hurricane Dorian and COVID-19, thousands of Bahamians were forced to work reduced hours or became unemployed. The magnitude of these events was not foreseen by
governments and policymakers. In response, the former Minnis administration distributed millions of dollars in food assistance, housing and benefits to assist many families through these difficult times. However, there is no simple answer to how a government should respond, and these types of solutions often put a strain on resources - especially when it is not planned. In bigger economies such as the US, the distribution of stimulus cheques has proven just that. While its intent was to increase consumption and stimulate the economy (grow GDP), economists have estimated there would only be a slight output gap, translating to a mild rise in inflation. The answer is never clear, and we do not expect governments to know and do everything. But at least we can expect a commitment from our government to do its very best. Implementing and finalising the working draft of the NDP’s policies would help to diversify the economy, appropriately manage public debt, and ensure accountability. By sticking with the NDP, the Davis administration has an opportunity to show they are dedicated to meeting the needs of the Bahamian people regardless of unpredictable events. Pivot and Grow
In previous segments, we spoke about how economic diversification plays a key role in how The Bahamas and other Caribbean countries will survive in the future. Industries such as tourism, along with other service sectors (banking, insurance etc.), have always provided jobs to Bahamians and, as a result, play a crucial role in keeping the domestic economy functioning. However, we have seen that unprecedented disasters, even the ones we can prepare for, will have an impact on the services sector, particularly tourism. A plan should include steps towards a sustainable tourism sector with the expansion of Bahamian-owned boutique hotels, eco-tourism activities on the Family Islands, and a service-led industry that allows for human resources to be exported rather than imported. This pandemic should have warned policymakers that The Bahamas’ heavy reliance on tourism is simply not sustainable, and that while improving the industry is beneficial, looking outside to more innovative sectors would be better to build on for future economic and social development. Risk Management The NDP provides the Government with a road map for making informed decisions and, crucially,
reduces potential risks ahead of unforeseen events and crises. For instance, the NDP points out that “new technologies, procedures and medicines are brought on to the market every year, which Bahamians rightfully expect to access”. The plan has identified that there is a need to meet this commitment through alternative revenue generation, deferring other priorities and by generating more efficiencies within the system. If the plan is followed carefully to meet its healthcare targets, it would help to us to have the funds and resources needed to at least provide sufficient care in a crisis. The right team For the NDP’s policies to produce measurable outcomes, a leader with vision is needed to achieve this. In the past, we were fortunate to have Nicola Virgill-Rolle lead the creation of The Bahamas’ NDP. Her departure from the National Development Plan committee left many unanswered questions regarding leadership. The Davis administration has not yet indicated any plans to continue with the NDP or announced a leader, unit or committee to complete its work. One person that comes to mind as a good fit is Allyson Maynard Gibson QC, former attorney general and minister of legal affairs.
Baha Mar unveils latest restaurant BAHA Mar has revealed that its latest restaurant option will open at its Grand Hyatt property on December 20, 2021. The Cable Beach-based mega resort, in a statement, said Cinko, an Asian Latinoinspired kosher restaurant, will be operated by Chabad of the Bahamas. “We look forward to expanding Baha Mar’s culinary portfolio by introducing Cinko Asian Latino Grill as the latest addition to our
impressive restaurant offerings,” said Graeme Davis, Baha Mar’s president. “As we continue to uphold our promise to provide the luxury of choice to all travellers, we are delighted to offer our kosher guests an exceptional dining concept with the same outstanding level of service and remarkable food options that have elevated the Baha Mar culinary experience and redefined the Caribbean vacation for contemporary travellers.”
“We are thrilled by this very exciting development for Baha Mar, as this is the first ever kosher restaurant in The Bahamas. The opening of Cinko Asian Latino Grill is great news both for the local community and for international visitors from around the world,” said Rabbi Sholom Bluming, Chabad of the Bahamas. “As Rabbi of The Bahamas, we are proud to oversee its kosher certification and excited for the high standard
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RODERICK A.
SIMMS II In her former post, Mrs Maynard-Gibson showed a keen interest in ensuring The Bahamas became a smart island nation along with using information and communications technology (ICT to drive growth and development. Conclusion Most of the hard work is already done. The NDP is a tool that governments around the world have committed to reaching sustainable goals. These sustainable goals not only provide a road map for a better future, but keep countries on track with what the global economy requires to meet the demands of the fourth industrial revolution (digital era). COVID is just one of many global crises that can arise. We must observe and learn the trends, mistakes and changes that are occurring. Using the NDP to prepare The Bahamas as a competitive nation is a great first step. of Kosher which the restaurant will uphold. We congratulate Baha Mar on this momentous endeavour and look forward to its success.” Located inside Grand Hyatt Baha Mar, Cinko Asian Latino Grill will be open for dinner and in-room dining. Kosher breakfast and lunch menu items will also be available throughout other Rosewood and SLS Baha Mar outlets. Cinko celebrates the diversity of five Latin American countries, combining multi-cultural Latin cuisine paired with bold Asian flavours.
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Monday, November 1, 2021, PAGE 3
BPL $535M BOND ‘TOO LATE OUT GATE’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE Minnis administration was “too late getting out the gate” on Bahamas Power & Light’s (BPL) mammoth $535m refinancing, an ex-union president said yesterday. Paul Maynard, the Bahamas Electrical Workers Union’s (BEWU) president, told Tribune Business that “the whole dynamic” has changed since BPL’s rate reduction bond (RRB) was first conceived to the point where global capital market conditions would impose prohibitively expensive costs on Bahamian households and businesses if it went ahead. The Prime Minister last week signalled that, at best, the BPL bond will be delayed because the 20 percent increase in electricity costs that it threatens to impose “simply cannot be justified” at a time when Bahamians and businesses are trying to rebuild from the financial devastation inflicted by the COVID-19 pandemic. However, warning that BPL’s problems have not gone away, Mr Maynard said the Davis administration has “no choice” but to come up with an alternative refinancing mechanism to address the energy monopoly’s aging transmission and distribution (T&D) systems as well as its legacy $320m debts, unfunded $100m employee pension deficit and legacy environmental liabilities. “I think they’ll have to come with another way of financing it,” he said. “They have no choice; it has to get done. You cannot wait fourand-a-half years to deal with it. The whole dynamic has changed. “They [the Minnis administration] were late getting out of the gate. Four-and-ahalf years was just too long. It should have been done four-and-a-half years ago. If it was done four-and-half years ago, we would not be having this conversation.”
The RRB, as a mechanism for resolving BPL’s financial woes, was originally developed under the last Christie administration. It was nowprime minister Philip Davis, then holding the post of deputy prime minister with responsibility for BPL and other utilities, who shepherded the enabling legislation to facilitate the bond issue through Parliament in late 2015. Mr Davis last week said the Christie administration left a framework for the bond’s issuance in place with its successor, with J P Morgan to act as financial adviser/placement agent, but it is unclear how far work had progressed prior to the 2017 general election. Getting the capital-raising ready for market also appeared to be slow-going under the Minnis administration, with reforms to make the Rate Reduction Bond Act more investor-friendly still not brought to Parliament prior to the September 2016 general election. In the meantime, global capital market conditions have altered drastically due to the COVID-19 pandemic and other factors. The successive downgrades suffered by The Bahamas, with its sovereign debt now rated as ‘junk’ by the two main credit rating agencies, coupled with BPL’s own shaky finances and absence of a turnaround plan, have all increased the bond’s risk. As a result, investors are demanding a higher price (interest rate) for parting with their money. And, given that BPL’s business and household consumers will be charged with repaying investors who buy into the $535m bond, the extra debt servicing charge that was proposed to be added to their bills will be higher than originally anticipated. “He [Prime Minister Davis] said it was too expensive, and he wasn’t prepared to do it,” Mr Maynard added. “It would be too much money on the taxpayer, on the consumer......
“This is a situation where you have got to find a way to cut electricity costs in half. If you cut electricity costs in half, it will be a whole new economy, simple. This economy has to have a chance to grow itself, and you need to reduce the rate. The cost to put electricity into is a big, huge cost.” Dr Donovan Moxey, BPL’s chairman, previously said that the bond’s issuance would temporarily increase consumers’ electricity costs by 15 percent - a level not too far away from the 20 percent cited by the Prime Minister. The plan was that this would be a short-term hike, with improved generation efficiencies and lower fuel costs offsetting the rise and, ultimately, lowering net light bills. However, market sources, speaking on condition of anonymity, told Tribune Business they understood that the interest rates on the $455m RRB component due to be placed internationally had increased from the originally-targeted 7-8 percent range to around 9 percent. The latter figure equates to a collective $40.95m in new annual debt servicing costs BPL customers would have to pay. “That’s too much at 9 percent. That’s a lot of interest,” Mr Maynard replied, when informed. As for the $80m RRB portion that was due to be placed in The Bahamas, this newspaper understands the Government and BPL’s advisers were contemplating a 7-8 percent interest coupon based “on the spread with international paper”. One source suggested the Government was likely to wait until capital market conditions became more favourable to obtain lower interest rates before the RRB was placed. They added that the structure might also change, with the Government possibly in a better position than BPL to raise the debt and then shift it over to the utility’s balance sheet. It is unclear, though, how the Davis administration
plans to address BPL’s stillprecarious financial and operational position despite suggesting the bond is “dead in the water”, given that no formal alternative has yet been unveiled.
Pedro Rolle, BPL’s newly-appointed chairman, yesterday declined to comment on the basis he had yet to be fully briefed on the matter, but said he would be better-placed to talk later this week. Neither
Alfred Sears, minister of works and utilities, who has responsibility for BPL, or Michael Halkitis, minister of economic affairs, could be reached for comment although messages were left.
PAGE 4, Monday, November 1, 2021
RED LOBSTER FRANCHISE EYEING SPIN-OFF BRAND FROM PAGE ONE seafood-based menu and be launched in 2022 alongside the planned Red Lobster outlets. Mr Mortimer did not go into details on outlet locations or staffing numbers for the latter, although he did confirm it will have two locations - one in eastern New Providence, and one in the island’s west - although no decision had been made on which opens first. In unveiling Pinnacle Franchise Brands and Red Lobster to investors via the ArawakX crowd funding platform, the group had indicated one Red Lobster outlet would be based at Mall at Marathon and another at the newly-renovated Nassau Cruise Port. However, Mr Mortimer added of the latter: “We had submitted a proposal to them. We don’t know where
that is and what the decision is.” Pinnacle Franchise Brands has already exceeded its $1.5m minimum capitalraise target, after it was last week confirmed that 950 investors injected more than $1.7m to become shareholders in the Red Lobster franchisee. It had been eyeing a maximum $2.7m, and Mr Mortimer voiced optimism that it would “get pretty close” to that goal. However, he added: “We know we can execute and get everything done. There’s no worry in terms of making the project happen. We’re comfortable.” The Galleria Cinemas chief said Pinnacle Franchise Brands’ successful raise had proven the concept of crowd funding via a formal platform such as ArawakX can work in The Bahamas. “Anything
where Bahamians are able to participate in growing Bahamian investment in Bahamian companies is always a good thing,” he said. “I’m happy to have partnered with ArawakX, and think it bodes well for the growth of the Bahamian economy and Bahamian businesses alongside local retail investors, giving them an opportunity to take advantage of things where they may not have had an opportunity to do so before. “I think it shows The Bahamas is ready, the Bahamian people are ready to take advantage of opportunities presented to them by Bahamian investors and I believe that bodes well for the future growth and development of the business side of the Bahamian economy. We’re all excited to have been a part of that and show it works,” Mr Mortimer continued. “It proves the concept works. Not only does it work outside the country, but it works inside the country. We’re happy for ArawaxkX, we believe in them, believe
in the concept and what their platform can be for the benefit of entrepreneurs so we celebrate with them.” Suggesting that himself and Pinnacle would do more capital raisings via ArawaxX in the future, Mr Mortimer said: “I would expect that over time, yes. Our relationship with ArawakX is not a
one-off. I fully expect our growth and development, along with a number of other investors and Bahamian entrepreneurs, to happen along with their own.” James Owen, Pinnacle’s chief financial officer, told a TV news program on Friday that it was targeting a 5-8 percent dividend
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return depending on the market once it entered its full operational phase. He added that the agreement with Red Lobster called for it to expand the restaurant chain into Caribbean states such as Dominican Republic, Jamaica and Trinidad.
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CENTRAL BANKS LOVE TO PRINT MONEY By RICARDO EVANGELISTA
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xcept for a few countries, Germany being a noticeable example where the use of physical cash to settle everyday transactions remains high due to cultural reasons, payment by electronic means is becoming more and more common. For many of us it has been months or even years since we last touched a bank note or coin, especially since the beginning of the pandemic, when many shops stopped accepting cash fearing the transmission of the virus through money. Strangely, despite this reduction in everyday use, physical cash remains abundant and, in some cases, there has never been so much in circulation as there is today. In Great Britain, for example, debit and credit card usage has outstripped physical money since 2017, with the trend having since accelerated due to COVID. Still, the value of all pound notes in circulation trebled over the last 20 years, reaching a total of around £75bn in 2021. It is not easy to explain and reconcile the reduction in use with the increase in
supply, but there are several theories. Some point to the very low interest rates of the last decade as perhaps being the reason why many prefer to keep money stashed at home, rather than in bank accounts that do not yield any interest. Or it could be the money laundering activities of criminal organisations, which in its initial stages often requires the moving of large suitcases filled with bank notes across borders. However, no one seems to know for sure; perhaps because those who should know, the central banks responsible for printing money, seem unconcerned by the paradox. And there is a good reason for this apparent indifference; it’s called Seigniorage. This old French word was used to refer to the monopoly of the feudal lord (seignior) over matters such as issuing money and their right to a percentage of the gold or silver used in the minting process. As time passed, societies and nations evolved to higher degrees of sophistication. Central banks eventually gained the monopoly of issuing currency, but the old principle remained in place. And seigniorage turned out to
GOV’T URGED: FIX PRICE CONTROL APPROVALS FAST FROM PAGE ONE minimum”, with inventory going past its sell-by date as Super Value waits for the necessary approvals, he also voiced “disappointment” that the Prime Minister appeared to be relying on this mechanism to keep food prices in check while he makes breadbasket items VAT-able again. “The problem with price control is that they have to develop something instant,” Mr Roberts told this newspaper. “The quotes we got this morning are no good this afternoon, and the merchandise is no longer available. “It’s an antiquated system, and I pointed that out to Minister [Michael] Halkitis this morning, offering to work with him to do something about it....... It’s a 50-year antiquated system and should be abolished. It’s contributing to the cost of living, and we could buy a lot more food.” Price controls were initially imposed by the Government to prevent what it viewed as a unscrupulous merchant class from exploiting lower income Bahamians by unreasonably hiking the price of food staples and other products, thus placing them out of reach while undermining living standards. However, opponents argue they are an out-dated and distortionary mechanism that create more unintended consequences than problems they solve. They can result in product shortages, while retailers and wholesalers have to increase prices and margins on non-price controlled items to compensate for selling these goods as effective “loss leaders”. Mr Roberts recalled discussions with the late A. D. Hanna, when he had ministerial responsibility for price control, asking him why retailers always received an 18 percent margin but that it took six months to approve, forcing merchants “to go out at cost and below cost, and stop importing it”. Suggesting that little has changed since then and the present, the Super Value principal added: “We’ve had it go out of date because we’ve had to keep it so long in the warehouse before they approve it. All that contributes to the cost of living. “I was disappointed in the Prime Minister’s remarks as threatening the merchants with price controls is not going to ease the food
supply chain or ward off inflation. It’s much better to work together.” Mr Davis, in his speech to Parliament last Wednesday, had indicated that the Government was looking to price controls to keep food prices in check as the Government moves to eliminate multiple VAT concessions on such products. However, Mr Roberts voiced optimism that Mr Halkitis, minister of economic affairs, would be able to work with the industry to address the matter and “get it fixed”. He added: “We’re hoping for the best with this new administration, and are supporting them on the basis that they’re going to be fair and everybody will work together to try and save this nation because it’s going down the wrong road. “There’s no point calling a meeting. They have to fix it, and fix it fast, because while we’re meeting suppliers are running out and price are increasing.” Mr Roberts said Super Value was aiming to have six months’ food supply in its warehouse, and would know early in 2022 whether the global food supply chain will “repair itself or be weak all year”, coupled with likely inflation levels. Debra Symonette, Super Value’s president and chief financial officer, added that the 13-store chain anticipates no product shortages or “significant increase in food prices in the immediate future” despite global supply chain disruption although some rises will become evident during the first part of 2022. “A shipment that would have taken several weeks before the crisis can now take up to three to four months, and containers that cost $600 now cost $2,400 freight,” she said. “There is also the issue of shortages of certain products - oils, soy, paper and plastic for making bottles stemming from issues with production.” These issues, Ms Symonette added, include a shortage of factory workers; factories closing down due to COVID-19; and a lack of certain ingredients due to weather conditions such as flooding, snow storms. “These problems will inevitably lead to price increases. The good news is that we are able to hold off some price increases until the New Year due to the fact that we were able to purchase these items early before the price hikes,” she said.
be very profitable indeed, due to the differential between the manufacturing cost of the unit and its face value, which increased significantly when bank notes with high face values and low production costs replaced coins as the most commonly used form of money. Today, those with the monopoly on the issuance of money profit handsomely from it. Think of a $100 bill: Although the face value of the bank note is 100 US dollars, the production cost is only 14 cents. So, for each $100 bill it issues, the Federal Reserve gets to keep $99.86 that was created out of thin air. If it was not for this prerogative, government treasuries around the world would struggle to find the resources necessary to balance their budgets, especially during economically troubled times, when fiscal income declines and spending increases. This is the reason why no one is trying too hard to find those missing bank notes. “We are fully stocked with national brands and are still trying to maintain and improve on having a six-month warehouse inventory on hard goods. In addition, we are adding private labels to our inventory in case some national brands become unobtainable.”
Monday, November 1, 2021, PAGE 5
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INSURERS WARN THAT VAT REVERSAL ‘TOTALLY ASININE’ FROM PAGE ONE
insurance industry on what they intend to do,” Mr Saunders told this newspaper. “The minister came out and said VAT will be placed on medical insurance. Medical insurance already has VAT. “The only thing exempt was homeowner’s insurance, and the reason that was exempt was because the Government got themselves in a big issue with the hurricane [Matthew] and ended up owing the insurance industry millions of dollars. “We have an agreement with them that cost about $1m in legal fees. The present attorney general was one of our lawyers, so he’s aware of that agreement between the VAT Department, Treasury and Bahamas Insurance Association. We will request a meeting with the relevant parties to understand what they are saying. No one has come to us to say whether it’s exempt or not.” Declining to comment on the potential impact for both industry and consumers until the matter is clarified, Mr Saunders added: “I will say this. It would be an asinine situation if the Government reverts to VAT on homeowners insurance knowing the previous situation. “It will be asinine, a totally asinine decision, if
they revert to charging VAT on homeowners insurance, knowing the impact it has had in the past and impact it will have on the future when claims are paid out. It was a big dispute between the insurance industry and the Government that was resolved. “It took almost three years to negotiate the matter. We came out with the best happy medium for all of us. We’ll now have to wait and see. You can imagine if that was the situation with Dorian, and the millions of dollars that would have been owing to the insurance industry.” Clint Watson, the Prime Minister’s press secretary, when specifically asked on Friday whether the Government plans to make homeowners insurance premiums VAT-able again, confirmed that is presently the intent. “As it stands now, yes. They’re trying to zero-out everything,” he replied, while adding that a meeting will be held this week to determine if this applies “across-the-board”. VAT-related uncertainty impacted the property and casualty insurance sector for a three-year period after Hurricane Matthew struck in 2016. Tom Duff, Insurance Company of The Bahamas general manager, told this newspaper then that the differences stemmed from whether
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general insurance underwriters could recover VAT on all or only some claims that were settled on a cash basis. While the insurance industry felt it had achieved “a clear understanding” with the last Christie administration that VAT was recoverable on all such claims, its successor adopted the position that this was only the case where the insured client was a VAT registrant - meaning a business with a turnover greater than $100,000 per annum. As a result, Bahamian property and casualty insurers were faced with being unable to recover “the VAT portion” of any Hurricane Matthewrelated claims paid out to residential homeowners and other non-VAT registrants. Given the $400m in insured damage inflicted by that storm, this had left the industry facing a massive, unexpected multi-million dollar financial burden. The resolution involved the creation of three different scenarios for separate categories of insurance claim. In the case of a property insurance claim submitted by a VAT registrant, namely a company, insurers will be able to deduct input VAT from both the settlement itself and any professional fees incurred in determining it, such as bills presented by loss adjusters and attorneys. But, for residential homeowners, since premiums paid by this customer category are VAT ‘exempt’, the industry is currently unable to recover any tax on claims settlement. That., though, could now change depending on the Davis administration’s plans.
AIRPORT AUTHORITY POSITION VACANT
Payroll Officer – Finance Department The Airport Authority wishes to advise that a vacancy currently exists in the Finance Department for the position of Payroll Officer. POSITION SUMMARY: This position is primarily responsible for preparing and processing all payroll transactions, calculating employee benefits and deductions, along with other related payroll functions. In addition, this position is expected to provide excellent customer service to both internal and external customers, while functioning in accordance with established procedures, policies, and governing regulations. KEY RESPONSIBILITIES: • Calculate employee salary hours • Prepare payroll reports noting all payouts and deductions • Address salary-related concerns and provide accurate payroll information • Identify, investigate, and resolve all timesheet and payroll discrepancies • Ensure that supporting documentation are accurately filed and accessible for audits • Preparing & submitting monthly C-10 NIB forms SKILLS /COMPETENCY EXPECTATIONS: • Good time management, planning and organizing skills • Ability to work productively with minimal supervision • Make sound, independent judgements within policy guidelines • Exercise tact and diplomacy when dealing with complex, confidential, and sensitive issues • Establish and maintain effective working relationships with those encountered in the course of work • Computer literacy, including familiarity with common word processing, spreadsheet, database, and basic software (Microsoft Excel and Word) • Ability to multi-task efficiently • Adaptability and willingness to meet evolving department demands and skillset requirements • Maintain files and records so they remain updated and easily accessible REQUIREMENTS: • Associate degree in Accounting or related field from an accredited education institution • Minimum of two (2) years’ experience in Payroll and/or general accounting procedures • Knowledge of relevant accounting software eg: Sage,ISL Interested persons can visit the Human Resources Department to submit their resume and cover letter for application by Monday, November 1, 2021.
email: humanresources@airportsbahamas.com
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VAT CUT’S ‘MODEST’ JOBS, GROWTH EFFECT FROM PAGE ONE
“However, and at the same time, there must be compensating tax revenue initiatives to address the rise in the deficit and debtto-GDP ratio.” While the UoB study thus gives cautious backing for a VAT rate cut that will likely be welcomed by many Bahamian businesses and consumers, it indicates that the economic impact will largely be modest - and negative for the Government’s finances. However, neither “scenario 19” nor “scenario 20” were seemingly attached to the report, which was posted to the Government’s website. As a result, it is unclear whether the UoB study’s VAT cut modelling accounts for the multiple exemption and zero-rating eliminations planned by the Davis administration, making it impossible to judge whether the exact 10 percent structure was assessed. The Davis administration believes that returning to a lower-rate, broad-based VAT will make the tax much simpler to administer and enforce, thereby enhancing compliance and reducing the scope for revenue leakage, fraud, evasion and mis-reporting. And it also hopes that reducing the multiple exemptions and zero-ratings introduced by its predecessor will further boost revenue collections, thereby ensuring the Public Treasury is no worse off with a 10 percent VAT rate than at 12 percent. The reversion to a lowerrate, broad-based VAT was backed by Super Value’s principal, Rupert Roberts, who told Tribune Business it was a mistake for the Minnis administration to “unravel” that model. And he argued that the impact from making so-called breadbasket food items
VAT-able would be offset by the two percentage point VAT reduction on non-food spending. “The controversial VAT [elimination] on bread basket items was a mistake originally. The New Zealanders warned the FNM and DNA if they ever came to power not to do anything to unravel VAT,” Mr Roberts said. “We were involved in the negotiations. It was the first thing that the FNM did with an election promise, which reduced Government’s revenue and left the system open to fraud. Most families spend an average of 20 percent of their income on food. Therefore they will have a 10 percent increase on 20 percent of their income, and a 2 percent reduction on 80 percent, which will balance out. “Our calculations indicate that government will collect the same revenue. We are not surprised at government’s actions as we expected the problem would be reversed if a new government came to power.” Breadbasket foods that are presently VAT-free include baby foods and cereals; rice; butter; corn beef; flour; and fresh milk. And current VAT-free medicines also include those for heartburn and indigestion; aspirin; cough, cold and allergy medications; and those that deal with pain and fever. Rather than rely on zeroratings and exemptions to minimise VAT’s impact on lower income Bahamian families like its predecessor, the Davis administration plans to do this via social security payments - something it believes will be more efficient. The report’s contents indicate that it was compiled, and completed, in the months following May’s 2021-2022 original Budget.
Meanwhile, the UoB study warned that The Bahamas needs to achieve an average 5 percent annual gross domestic product (GDP) growth rate over the next decade to return the Government’s finances and the economy to “a healthy state of affairs”. To achieve this, it added that the country needed to attract “significant” investment in multiple industries at levels far higher than it has traditionally done so, while recommending that there be a major focus on renewable energy to reduce electricity costs and thus keep inflation under control. It revealed that, based on an August 12, 2021, note from outgoing BPL chairman, Dr Donovan Moxey, the state-owned energy monopoly has estimated a $451m investment is required if it is to generate 33 percent of its energy from renewable sources by 2030. “To reverse its current economic and fiscal trajectories, and achieve targets that represent a healthy state of affairs for the country, The Bahamas must generate economic growth levels averaging about 5 percent over the next ten years,” the UoB study said, while conceding “that this has not been achieved previously but must be targeted moving forward. “To achieve such high levels of growth, the country must attract significant direct investment over multiple economic sectors. Of the five economic sectors under review, the highest yields come from investments in the “transformation and trade” sectors while the largest
impact on GDP comes from the tourism sector. “Reducing inflationary pressures from high levels of investments that generate a significant number of
Monday, November 1, 2021, PAGE 7 jobs, and therefore tightens the job market, a significant investment in renewable energy is necessary to curtail price increases,” the report continued. “To optimise the benefits of a growing economy to the country’s fiscal outcomes, reducing government tax expenditures,
i.e.concessions, is necessary. And in alternative scenarios where there is no direct investment, increased dependency on non-renewable energy, and increases in tax expenditures occur, the economic and fiscal circumstances of the country deteriorate below the baseline.”
CALL 502-2394 TO ADVERTISE IN THE TRIBUNE TODAY!
AIRPORT AUTHORITY POSITION VACANT
Payables Officer – Finance Department The Airport Authority wishes to advise that a vacancy currently exists in the Finance Department for the position of Payables Officer. POSITION SUMMARY: This position is primarily responsible for the ongoing maintenance and processing of all matters relating to payable transactions of the Finance Dept. Additionally, this position is expected to provide excellent customer service to both internal and external customers, while functioning in accordance with established procedures, policies, and governing regulations. KEY RESPONSIBILITIES: • Prepare, review, and verify invoices and payment requests • Process electronic payment transfers and other payments • Reconcile accounts payable transactions • Ensure that supporting documentation are accurately filed and accessible for audits • Maintain Accounts Payables aging schedules SKILLS /COMPETENCY EXPECTATIONS: • Good time management, planning and organizing skills • Ability to work productively with minimal supervision • Make sound, independent judgements within policy guidelines • Exercise tact and diplomacy in dealing with complex, confidential, and sensitive issues • Establish and maintain effective working relationships with those encountered in the course of work • Computer literacy, including familiarity with common word processing, spreadsheet, database, and basic software • Excellent written and verbal communications skills • Ability to multi-task efficiently • Adaptability and willingness to meet evolving department demands and skillset requirements • Maintain files and records so they remain updated and easily accessible REQUIREMENTS: • Associate degree in Accounting or related field from an accredited education institution • Minimum of two (2) years’ experience in Accounts Payables and/or general accounting procedures • Knowledge of common accounting software eg: Sage, ISL Interested persons can visit the Human Resources Department to submit their resume and cover letter for application by Monday, November 1, 2021.
email: humanresources@airportsbahamas.com
PAGE 8, Monday, November 1, 2021
SAUDI ARAMCO SEES THIRD-QUARTER INCOME RISE TO $30.4 BILLION By ISABEL DEBRE Associated Press DUBAI, United Arab Emirates (AP) — The world's largest oil company, Saudi Aramco, reported $30.4 billion in third-quarter net income on Sunday, bolstered by a surge in oil prices and recovery in demand as the coronavirus pandemic eases. Saudi Arabia's majority state-owned oil giant Aramco, formally known as the Saudi Arabian Oil Co.,
said its net income more than doubled from $11.8 billion during the same three-month period a year earlier. Last year's figure came after profits plunged dramatically as global lockdowns slammed oil prices. Net income refers to the amount left after taxes and preferred dividends have been paid. Aramco CEO Amin Nasser described the company's third-quarter results as "exceptional," a result of "increased economic activity in key
markets and a rebound in energy demand," even as supply chain bottlenecks imperiled the global economic recovery. The 158% spike in earnings follows the global loosening of virus-induced restrictions, tightening of gas supplies and acceleration of vaccination campaigns that have pushed prices of crude sharply higher. The price of international benchmark Brent crude was trading at over $83.50 a barrel on Sunday.
Career Opportunity Scotia Wealth Management is seeking the services of a Manager, Anti-Money Laundering / Quality Control Short Term Contract Position Summary: Contributes to the overall success of the Private Banking in The Bahamas, Cayman and Jamaica ensuring specific individual goals, plans, initiatives are executed / delivered in support of the team’s business strategies and objectives. Ensures all activities conducted are in compliance with governing regulations, internal policies and procedures.
Key Accountabilities for this role: w Champions a customer focused culture to deepen client relationships and leverage broader Bank relationships, systems and knowledge. w Works closely with IPB Senior Management, to support the AML program for IPB for the English Caribbean countries, including design and improvement of onboarding and maintenance processes, offboarding of clients, and overall adherence with policy. w Responsible for supporting the oversight of the Private Banking Onboarding Program to ensure compliance with enterprise-wide policy and regulatory standards and improvement of the customer experience w Ensures implementation and sustainment of KYC documentation (PASA/ NON PASA) and suggests enhancements to the AML-related processes. w Responsible for providing guidance as needed to Product Groups, business units and support units with respect to documentation and AML-related processes. w Supports design, development and implementation of appropriate risk-based training programs. w Drives collaboration with other supporting functions such as BSC, EDDU, AML to comply with Enterprise and local regulations w Supports in issue management and tracking based on first, second, and third line testing for the Region w Assist with tracking of AML related initiatives w Understand how the Bank’s risk appetite and risk culture should be considered in day-to-day activities and decisions. w Actively pursues effective and efficient operations of his/her respective areas, while ensuring the adequacy, adherence to and effectiveness of day-to-day business controls to meet obligations with respect to operational risk, regulatory compliance risk, AML/ATF risk and conduct risk, including but not limited to responsibilities under the Operational Risk Management Framework, Regulatory Compliance Risk Management Framework, AML/ATF Global Handbook and the Scotiabank Code of Conduct. w Champions a high-performance environment and implements a people strategy that attracts, retains, develops and motivates their team by fostering an inclusive work environment, communicating vison/ values/business strategy and managing succession and development planning for the team.
Educational/Competency Requirements: w Fluency in English is required. w Bachelor’s degree in business administration, finance, or equivalent work experience. w A minimum of 5 years’ experience working in financial institution with strong AML/ATF framework preferably in a regulatory, compliance or quality assurance capacity w Experience driving AML/ATF and compliance related projects is considered an asset. w Efficient and well organized, with sound judgement and strong communication skills w Experience in prevention of potential penalties, losses and damage to reputation due to failures in the AML/ATF program. w Working knowledge of issue management closure and escalation processes. w Results focused and ability to deliver under pressure. w Efficient and well organized, with sound judgement and strong negotiation skills. w Working knowledge of Excel, including data analysis.
Qualified candidates should submit C.V. via email to: hrbahamas@scotiawealth.com on or before November 1st, 2021. Please note that only those individuals short-listed for an interview will be contacted.
™Trademark of The Bank of Nova Scotia, used under licence (where applicable).
Consumers and companies are using more gasoline and airplane fuel as governments relax restrictions, leading to a rally across energy markets. "We are optimistic that energy demand will remain healthy for the foreseeable future," Nasser said. Crude prices have been helped by production cuts made by the Organization
of the Petroleum Exporting Countries and their allies, a group known as OPEC+, which meets later this week. As consumption picks up, the group has gradually started adding barrels back to the market, with plans to pump 400,000 more barrels a day each month through December and raise Saudi Arabia's limit of 11 million
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barrels to 11.5 million next year. The third-quarter earnings from the oil giant, which listed a sliver of its shares three years ago, represented a major improvement from the same quarter before the pandemic in 2019, which brought in $21.3 billion. Shares of Aramco finished 0.4% higher on Sunday following the earnings report, with a share costing 37.90 riyals, or $10.10 on Riyadh's Tadawul stock market.
THE TRIBUNE
Monday, November 1, 2021, PAGE 9
PUBLIC NOTICE
INTENT TO CHANGE NAME BY DEED POLL The Public is hereby advised that I, LANA JOE of Central District Nassau, General Delivery, The Bahamas, Mother of JAZARIA LALIQUE JOE A minor intend to change my child’s name to JAZARIA LALIQUE GIBSON If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy 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 RYAN KEVIN MINDS of Sea Breeze Lane Nassau, 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 1st day of November, 2021 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.
Share your news The Tribune wants to hear from people who are making news in their neighbourhoods. Perhaps you are raising funds for a good cause, campaigning for improvements in the area or have won an award. If so, call us on 322-1986 and share your story. LEGAL NOTICE INTERNATIONAL BUSINESS COMPANIES ACT, 2000 CARCARA PLAINES LTD. Voluntary Liquidation Notice is hereby given that in accordance with Section 138 (8) of the International Business Companies Act, 2000, the dissolution of CARCARA PLAINES LTD. has 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 12th August 2021. Amicorp Bahamas Management Limited Liquidator
LEGAL NOTICE INTERNATIONAL BUSINESS COMPANIES ACT, 2000 HERMON HOLDINGS INC. Voluntary Liquidation Notice is hereby given that in accordance with Section 138 (8) of the International Business Companies Act, 2000, the dissolution of HERMON HOLDINGS INC. has 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 10th September 2021. Amicorp Bahamas Management Limited Liquidator FIRST LEGAL NOTICE INTERNATIONAL BUSINESS COMPANIES ACT, 2000 TROPEZ INVESTMENT MANAGEMENT LTD. Voluntary Liquidation NOTICE IS HEREBY GIVEN in accordance with Section 138 (4) of the International Business Companies Act, 2000 as follows:a)
TROPEZ INVESTMENT MANAGEMENT LTD. is in dissolution under the provisions of the International Business Companies Act, 2000.
b)
The dissolution of the said Company commenced on 26th October 2021 when its Articles of Dissolution were submitted to and registered by the Registrar General.
c)
The Liquidator of the said Company is Luis Felipe Gebara Benedetti whose address is Rua Pedroso Alvarenga, 1.221-Cj. 4A, Itaim Bibi – Sao Paulo – SP – 04531.012. Luis Felipe Gebara Benedetti Liquidator
LEGAL NOTICE INTERNATIONAL BUSINESS COMPANIES ACT, 2000 ALPHATEX CORPORATION Voluntary Liquidation Notice is hereby given that in accordance with Section 138 (8) of the International Business Companies Act, 2000, the dissolution of ALPHATEX CORPORATION has 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 5th August 2021. Amicorp Bahamas Management Limited Liquidator
PAGE 12, Monday, November 1, 2021
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US, EU SAY DEAL ON STEEL TARIFFS WILL HELP ON CLIMATE CHANGE By ZEKE MILLER AND JOSH BOAK Associated Press
ROME (AP) — President Joe Biden said Sunday a new U.S. and European Union trade agreement would crack down on "dirty steel" that produces carbon emissions that are blamed for climate change and also patch up a trans-Atlantic rift over Trump-era steel and aluminum tariffs. Biden and European Commission President Ursula von der Leyen said at a joint appearance during the Group of 20 summit that the agreement represented a renewed partnership on economic and environmental matters. The deal resolving the trade dispute would address the excess capacity that can distort the steel market and create a framework for reducing the carbon-intensity of steel and aluminum production that contributes to the warming of the earth. The U.S. president said "dirty steel" made in China would be restricted from accessing their markets, though all like-minded economies could participate in the agreement. "By harnessing our diplomatic and economic power,
we can reject the false idea that we can't grow our economy and support American workers while tackling the climate crisis," Biden said, who has been pushing the U.S. to aggressively address the threat posed by climate change. Biden is also scheduled to attend a major U.N. climate conference this week in Glasgow, Scotland. Von der Leyen kept smiling at Biden and calling him "dear Joe" as they discussed the deal, an apparent sign that the U.S. president had made progress in repairing relations with Europe after the partnership suffered during the Trump years. "It will be a major step forward in achieving climate neutrality and it will ensure a level playing field," she said, adding that the agreement was part of a renewed, forward-looking agenda with the U.S. The agreement was first announced Saturday in Rome by U.S. national security adviser Jake Sullivan, U.S. Trade Representative Katherine Tai and U.S. Commerce Secretary Gina Raimondo. They said the Article 232 tariffs, as they are known, would not be removed entirely but that some quantity of
European steel and aluminum will be allowed to enter the U.S. tariff-free. In return for Europe dropping its retaliatory tariffs, the U.S. would also ensure "that all steel entering the U.S. via Europe is produced entirely in Europe," Raimondo said. The easing of the tariffs is a key step in unwinding one of Donald Trump's legacies as president as Biden has tried to reset U.S. relations with Europe. The Trump administration had placed taxes on EU steel and aluminum in 2018, claiming the foreign products made by American allies were a threat to U.S. national security. Europeans and other allies were outraged by Trump's use of the Article 232 section of U.S. trade law to justify the tariffs, leading many to impose counter-tariffs on U.S.-made motorcycles, bourbon, peanut butter and jeans and hundreds of other items. The back-and-forth hurt European producers and raised steel costs for American companies. The tariffs also did not achieve Trump's stated goal of creating jobs at steel mills.