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WEDNESDAY, NOVEMBER 29, 2023

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By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government was yesterday urged to “prove the IMF wrong” over its deficit blow-out forecast with this nation’s top finance official revealing all major revenue lines are enjoying “double digit” growth.

Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business that officials “feel confident we are trending in the right direction” for 2023-2024 despite the International Monetary Fund’s (IMF) grim prediction that the fullyear fiscal deficit will be almost three times’ the Davis administration’s $131.1m projection.

Pointing to the crackdown on tax cheats, and multiple enforcement

Nipped in the Bud: Brewery reversal over 40-year tie-up

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net COMMONWEALTH Brewery yesterday suffered a reversal as the Court of Appeal sided with Budweiser’s global parent in the dispute over the termination of their 40-year Bahamian distribution deal.

Sir Michael Barnett, the Court of Appeal’s president, in a unanimous verdict backed by his two fellow judges overturned last year’s Supreme Court ruling which found that Anheuser-Busch International should have given the BISX-listed brewer some 15 months’ warning of its plans to end their relationship.

The Court of Appeal, finding that the two sides’ distribution deal was “informal” because it had never been put in writing, ruled that the three-and-a-half months notice provided by Budweiser’s parent during the 2015 second half was more than sufficient notice to the vertically-integrated Bahamian brewer, distributor and liquor retailer.

Of then-justice Indra Charles’ ruling, Sir Michael

found that a 15-month notice “is a long period and well outside the range of reasonableness”. He thus not only slashed the required notice by almost 80 percent but also, in overturning the Supreme Court verdict, rejected the damages awarded to Commonwealth Brewery.

These were to have been offset against the $598,512 owed to Budweiser’s parent for the 74 invoices submitted during the final three months before the distribution deal was switched to Commonwealth Brewery’s great rival, the Bahamian Brewery and Beverage Company, producer of Sands Beer. The notice period damages were not, though, determined, with the issue set down for a future hearing.

That hearing may now not be necessary following the Court of Appeal’s verdict. The distribution deal between AnheuserBusch and Burns House, Commonwealth Brewery’s predecessor, was first agreed in 1975 but never put in writing, although it was informally agreed that

SEE PAGE B4

No ‘rush of blood’ on corporate income tax

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Bahamas was yesterday urged “not to have a rush of blood” in moving too swiftly on corporate income tax as the Government inches towards issuing a ‘white paper’ on the subject.

Hubert Edwards, head of the Organisation for Responsible Governance’s (ORG) economic development committee, told Tribune Business that discussions on such reforms

HUBERT EDWARDS are likely to become “more focused” following the International Monetary Fund’s (IMF) latest call for The Bahamas to examine

SEE PAGE B5

and compliance measures to generate increased revenues, he added that the Ministry of Finance was optimistic “we’ll see the fruits of our labour” during 2024’s first four calendar months when the Government traditionally generates the bulk of its income.

With the increase in cruise passenger departure taxes set to also take effect from New Year’s Day 2024, Mr Wilson told this newspaper that the January-April period next year will “tell the story as to whether we will achieve our revenue targets” and by extension - Budget forecasts for the current fiscal year.

Tribune Business yesterday revealed that the IMF, in its statement on the annual Article IV consultation with The Bahamas, effectively blew a hole in the Davis

administration’s Budget projections by warning the 2023-2024 fiscal deficit will likely be almost triple its 0.9 percent of gross domestic product (GDP) forecast.

The Fund instead estimated that the deficit will be “considerably larger than that expected in the Budget” at a sum equal to 2.6 percent of gross domestic product (GDP). This outcome, if it ultimately turns out to be true, would see The Bahamas’ deficit balloon to around $378.73m compared to the Government’s $131.1m forecast - a $247.6m difference.

Mr Wilson, though, said these predictions are no cause for alarm or panic at this early stage in the fiscal year. He described the IMF as

SEE PAGE B4

Gov’ts deficit near-miss as VAT $160m off target

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government narrowly missed its deficit target for the recently closed 2022-2023 fiscal year despite a near-$160m undershoot on its VAT forecast, it was revealed yesterday.

The Ministry of Finance, unveiling its monthly report for June 2023, which also represented the fiscal year-end, disclosed that the $533.4m full-year deficit was just 2.5 percent or $12.8m higher than the revised target of $520.6m presented with the 20232024 Budget at end-May.

That outcome was also some $42m, or 7.3 percent lower, than the $575.4m deficit target set in the original 2022-2023 Budget. The Government largely kept the latter figure, which represents the difference between its spending and revenue income, on target despite failing to achieve its VAT ambitions for the period.

VAT, which is the Government’s main revenue source, accounting for almost 48 percent or nearly half its recurrent income, came in a material 11.3 percent below the 20222023 full-year projection of $1.412bn to stand at $1.252bn.

As a result of this outcome, the Davis administration must now bridge a $339m gap between that figure and this year’s $1.591bn forecast if it is to achieve its VAT ambitions and likely wider revenue and budgetary goals. That would amount to a 27 percent year-over-year increase.

Fiscal observers yesterday suggested this was too wide a gulf to overcome, as figures for July 2023 - the first month of the current fiscal year - showed VAT revenues increasing yearover-year by just $6.8m from $140.1m the prior year to $146.9m.

SIMON WILSON

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SEE PAGE B8

Opposition: IMF deficit warning ‘wake-up call’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Opposition’s finance spokesman yesterday argued the IMF’s deficit warning should serve as “a wake-up call” for the Government not to waste “record-breaking revenues”.

Kwasi Thompson, former minister of state for finance in the Minnis administration, told Tribune Business that the Government must rapidly determine if the International Monetary Fund (IMF) is accurate with its prediction that the 20232024 Budget deficit will be almost triple initial forecasts. And, if this is so, implement or unveil a plan to bring the public finances back on Budget.

Speaking after the Fund, in its statement on the annual Article IV consultation, warned that The Bahamas’ 2023-2024 fiscal deficit will be almost three times’ the Davis

KWASI THOMPSON administration’s own estimates, he asserted: “Again, the issue is that we are having recordbreaking revenues and we should be moving in the direction of a surplus.

“This is a huge wake-up call for the Government as to why is it we are having record-breaking revenues but cannot meet with Budget. The Government has to look at what the IMF says and the Government, first of all, has to answer whether what the IMF is saying is accurate.

SEE PAGE B2

PAGE 2, Wednesday, November 29, 2023

THE TRIBUNE

Financial services industry to honour retired attorney THE Bahamas Financial Services Board (BFSB) yesterday announced that its 2023 Lifetime Achievement Award will be presented to attorney Linda Beidler-D’Aguilar.

The honour will be presented this Friday at the BFSB’s Industry Excellence Awards Gala, which is due to be held at Baha Mar’s Convention Centre.

The Lifetime Achievement Award recognises an individual who has made significant contributions to the development of the Bahamian financial services

industry over a sustained period of no less than 30 years.

Mrs Beidler-D’Aguilar formerly served as partner and head of financial services at Glinton, Sweeting & O’Brien. After a 35-year career as an attorney, she recently retired from the firm and active practice of law with effect from April 30, 2023.

She specialised in the creation and structuring of investment funds for both institutional and private clients, and also advised on corporate transactions,

insurance, regulatory compliance, banking and securities law, public and private offerings, structured financing and general commercial matters.

Mrs BeidlerD’Aguilar served as a BFSB director from 2010 to 2014, and continues to play an active role in its regulatory, legislative and product development initiatives.

She has spoken at numerous international promotional events and financial services conferences.

She was actively involved in the education

of Bahamian financial services sector employees to ensure they were current and familiar with new legislation, and equipped with the necessary information to perform efficiently and effectively in the industry.

Mrs BeidlerD’Aguilar has assisted the BFSB with training and educational programmes for the industry as well as public sector employees. She was awarded the Minister’s Award in 2016 and BFSB’s Development and Promotion Award in 2014.

LINDA BEIDLER-D’AGUILAR

Opposition: IMF deficit warning ‘wake-up call’ FROM PAGE B1 “If it is, they must implement a plan to bring them back on Budget or show how they’re going to make adjustments to bring them back on Budget in the coming years. The Government has to look at that and evaluate that, and ask why the IMF projections are what they are. If the IMF is accurate, there are certain steps the Government is mandated to do as a result, and put in a plan to make the adjustments.”

The IMF, as disclosed by Tribune Business, has estimated that the current fiscal year’s deficit will be “considerably larger than that expected in the Budget” at a sum equal to 2.6 percent of gross domestic product (GDP).

This is almost triple the Davis administration’s forecast of a deficit equivalent to 0.9 percent of GDP or total Bahamian economic output. The IMF’s prediction, if accurate, would mean that the deficit - which measures by how much government spending

exceeds its revenue income - would balloon to around $378.73m compared to the Government’s $131.1m forecast.

Seizing on this, Mr Thompson said in an earlier statement: “The IMF in its statement released yesterday is now projecting that the Government’s deficit for this fiscal year 2023-2024 will approach $380m, which is almost 200 percent higher than the $131m deficit in the Government’s budget and medium-term fiscal strategy.

“This massive projected spike in the deficit is also projected by the rating agency Standards & Poor (S&P) in its September 2023 report on The Bahamas.” S&P is forecasting a deficit - which measures by how much the Government’s spending exceeds its income in any fiscal year - of 3.2 percent of GDP, which is equivalent to $466m almost $100m higher than that forecast by the IMF. “The Government must state whether these projections - first by S&P and now by the IMF - are accurate,

and if it is true that they are on track to blow the budget deficit target by almost 200 percent,” the Opposition finance spokesman said.

“If this is so, the Government must follow the fiscal responsibility provisions of the Public Finance Management Act and come to Parliament with a plan on how they will curtail their extravagant and unnecessary spending so as to bring the budget back in line with what Parliament had approved.”

Time will tell who is correct - the IMF or the Government - given that there is a $247.6m difference between their respective fiscal deficit estimates for the 2023-2024 fiscal year. However, if the Fund is proven right, it will mean that the Government’s ambitions of generating a fiscal surplus of $109.2m in the 20242025 Budget year will likely become less achievable and this goal will have to be pushed back.

The Government will also have to undertake significantly more borrowing

than planned to cover this year’s fiscal deficit if the IMF’s predicted outcome comes true, resulting in a further increase to the $12.556bn total public sector debt that was in existence at end-September 2023. While new revenue sources, such as carbon credits, are being targeted, these are unlikely to come to fruition in 2023-2024.

Turning to other issues raised by the IMF, Mr Thompson noted it had called on The Bahamas to ensure that members of the Fiscal Responsibility Council, the public finances watchdog, are selected through “an independent process”.

Recent legal reforms passed by Parliament in the Public Finance Management Act 2023 switched responsibility for appointing the Council’s members from the House of Assembly speaker to the minister of finance (now Prime Minister Philip Davis KC) - the very person whose ministry, and fiscal strategies, plans and actions they are supposed to be scrutinising.

“The IMF also specifically expressed concern about the ‘renewed pressures on global food and oil prices’ that burden lower-income households, and expressed the need for well-targeted measures to help without adding further strain,” Mr Thompson added.

“We have raised this point time and time again.

We say again, take VAT off healthy food and pay for it by cutting unnecessary spending and raising VAT on property transfers over $2m. Surely the Government must stop the wasteful spending while the critical needs of the people continue to go unmet, and at a time when they are projected to overshoot their budget deficit target by some $248m.”

The IMF, in its Article IV statement, said: “While the objectives of the authorities’ medium-term fiscal plan are laudable, staff assesses that more policy measures will be needed to achieve this targeted adjustment.

“In particular, based on current policies, the fiscal deficit is expected to be 2.6 percent of GDP in 20232024, considerably larger than that expected in the Budget. Over the mediumterm, debt would fall to 78 percent of GDP by 20272028 but gross financing needs would remain high for the next several years at around 20 percent of GDP. “Even though, under this path, debt is judged to be sustainable, a faster reduction in debt would be valuable in lessening the risk of sovereign stress and, in so doing, would be rewarded through a lower interest burden for the public debt.”

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THE TRIBUNE

Wednesday, November 29, 2023, PAGE 3

MINISTER BACKS CONSTITUENTS ON PROPANE PLANT OPPOSITION

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net A CABINET minister yesterday joined Baillou Hills Estates residents in voicing opposition to the development of a $1.3m “state-of-the-art” propane gas plant off Tonique Williams Highway Mario Bowleg, minister for youth, sports and culture, backed his Garden Hills constituents in their appeal against the Town Planning Committee approvals granted to Nassau Propane for its proposed relocation.

Speaking to Tribune Business at the preliminary hearing before the Planning and Subdivisions Appeals Board, he said he expects the original approvals to be overturned based on the outcry from Baillou Hills Estates subdivision residents.

“There’s rules and regulations that govern these communities, and we just hope that the rules and regulations that govern prevail,” Mr Bowleg said. “I mean, it’s unfortunate that a propane company would want to bring that type of organiaation or business within the community of what I call a lot of retirees.

“That community itself is based on a lot of persons who built their homes to retire and rest well as

they go towards their twilight years, and so to have something like that try to move into a community like Baillou Hills Estates, which has been around for a very long time, is just very unfortunate.”

Shaherah Adderley, president of the Baillou Hill Estates Homeowners Association, said the group has retained Romauld Ferreira, former minister of the environment under the Minnis administration, to represent the body at the full appeal hearing which is scheduled for January 23, 2024.

The Homeowners Association will have until December 12 to collate and present all the reasons for their objections to the Appeals Board. Residents also complained that Nassau Propane has begun to clear land and lay foundations for its new facilities despite an active appeals process. They added that the location also has an approval for a car wash along with the propane facility.

Warren Davis, Nassau Propane’s general manager, told the Appeals Board that the appeal should be dismissed - and the company’s project allowed to move forward - as those raising objections have no standing.

“The purpose of my attendance here today is to make a request that the application be dismissed. I

would have gone ahead and sent in a letter addressed to your attention that, clearly the justification or the reasons that the HOA (Home Owners Association) would have provided as a grounds for an appeal, those are not factual. So really, I’m here today to request that this matter be dismissed,” he said.

Mr Davis, who confirmed that Nassau Propane owns the entire property where the car wash and propane plant would be located, said the company is just clearing the land. He confirmed that the propane pant will be located adjacent to the car wash.

The Appeals Board, in declining to dismiss the appeal, informed Mr Davis that despite him being the owner of the land he would have to separate the two entities and clearly identify which is the car wash and which is the propane plant.

Mr Davis, in a previous interview with this newspaper, said that relocating to the new site will enable the company to upgrade its facilities, expand its services and hire more staff. “The primary reason is that the facility that we propose to build will be a state-of-theart plant. We’ve been at the current location for 23 years and never had any issues, but it’s time to go ahead and upgrade the facility,” he added.

“Especially with Nassau Propane, and a plant like Nassau Propane, it’s very important to continue to upgrade your facility. Our intent is to move so that we can offer customers, and Nassau at large, much better service. That’s why we selected this particular location. There are no homes there and we have several acres of encumbered land. We felt it was a great location.”

Mr Davis argued that the chosen site is superior to the Gladstone Road area, where many of Nassau Propane’s rivals are based, because their locations are becoming increasingly surrounded by residential housing developments.

He said the new Nassau Propane plant will be designed to US National Fire Protection Association (NFPA) standards, and international designers who have worked on “much larger plants” - including in Texas - have been hired to put the facility together.

The move would result in Nassau Propane’s workforce expanding from eight persons to 12.

Documents filed with the Department of Physical Planning show that Nassau Propane had initially intended to move just one block to the corner of Bozine Road and Tonique Williams Highway, but switched its focus to the current site at Chapel Drive

MARIO BOWLEG following objections from the planning authorities.

The Town Planning Committee seemingly gave the new location the go-ahead even though Department of Physical Planning officials raised questions about the propane plant’s “compatibility with its neighbours”.

Jehan Wallace, the Department’s chief physical planner, in a June 2023 paper for the Town Planning Committee, said a church, school and other commercial businesses are located nearby while a “multi-family housing structure is 120 feet to the west” of Nassau Propane’s proposed boundary.

“The applicant is seeking planning approval to relocate Nassau Propane to a 22,500 square foot site located on Chapel Drive off the Tonique Williams Highway. The site is currently vacant,” Ms Wallace wrote.

“The company is currently located a half-a-mile west of the proposed location

behind Ron’s Auto. However, they need to relocate and wish to stay in the same location [area] they have serviced for the past 22 years.

“The applicant hopes to enter into a long-term lease agreement with the owner of the proposed location for a space to create the same scope of their existing business.” However, she noted the proximity of Nassau Propane’s proposed new site to other ventures in the area.

“Uses in the area include a church, school and other commercial business,” Ms Wallace said. “There is one multi-family housing structure 120 feet to the west of the proposed western boundary of the site.

Even though the use currently exists in the area, it is the only industrial use and the Department has concerns about the compatibility of the use to its new neighbours.”

CARNIVAL TARGETING ‘MUCH MORE’ THAN 2.2M ARRIVALS WITH GB PORT

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net CARNIVAL Cruise Line expects to bring “much more” than the advertised 2.2m passengers per annum to its new Grand Bahama cruise port when the facility opens in 2025.

Juan Fernandez, its vicepresident of operational strategy, said that on “peak days” the cruise giant will bring 13,000 visitors to Celebration Key along with 2,000-plus crew members.

That amounts to around 15,000 persons per day.

Speaking at a Nassau forum for potential retail and food and beverage

tenants at Celebration Key, he added that while Carnival has “published externally” that they are expecting 2.2m passengers per year “I can tell you that it’s going to be much more than 2.2m passengers that we’re going to expect from this destination”.

Retailers will have between 18,000 to 20,000 square feet of space to work with when selecting their location at Celebration Key. “Typically, for the anchor stores, the large retail outlets, we ask for key money upfront to help with the construction of the building as well, and then the retailer will be responsible for all of the fit-out on the inside,” Mr Fernandez said.

“For the standard stores, typically we deliver the shell, but the retailer is responsible for all of the fitout including the flooring on the inside and then, for the smaller outlets and the kiosk, those will be turnkey and there will be the retailers, a kiosk, an outlet and all they have to do is bring their drawing.”

Lease agreements will vary depending on the size of the retail outlet, with the smaller ones involving shorter-term rental agreements. “What we’re really looking for is something that is authentically Bahamian; that’s going to resonate with our guests,” Mr Fernandez said.

“For retail, and for most of the food and beverage, each retailer is going to use their own POS (point of sale) system, so your own credit card machine, and you’ll be responsible for collecting payments from our guests or cash from our guests.”

The bidding process for Celebration Key’s large retail spaces has an extended deadline to December 16. “If you’re interested in the 600 square feet store space, it will be available in the January/ February timeframe,” Mr Fernandez added.

“Then, if you’re interested in the market kiosk, that is going to be much closer to opening, and the

opening of the port will be in July 2025. The RFP (request for proposal) for those will be in December 2024 to January 2025.”

Micro businesses and food trucks will also have

an opportunity to be present at Celebration Key so as to give Bahamian entrepreneurs a chance to start their operations. Proposals will be required in 2024.

PAGE 4, Wednesday, November 29, 2023

THE TRIBUNE

Gov’t is urged: ‘Prove IMF wrong’ on deficit FROM PAGE B1 taking “a much more conservative fiscal view” than the Government, and reiterated that there will be no policy changes such as increased tax rates to burden Bahamian consumers and businesses.

However, observers warned that the Government will have “some huge explaining to do” if the IMF’s fiscal forecasts turn out to be more accurate than its own. Branville McCartney, the former Democratic National Alliance (DNA) leader, told Tribune Business of the vastly different forecasts: “The Government has some explaining to do to justify their projections against the IMF’s.

“I think that is quite significant. The Government has been going around speaking about their fiscal policies and how they benefit the country. With this information coming from the IMF, it goes contrary to what they have been saying, promoting and

even campaigning. The Bahamian people ought to demand the Government justify what they are saying compared to what the IMF are saying.

“Prove the IMF wrong.

I absolutely hope they can.

That would benefit the country. Prove the IMF wrong in what they are saying. That should be done post-haste. There’s a significant difference between what the Government is saying and what the IMF is indicating. Someone is wrong and I hope that the Government can prove it’s the IMF,” Mr McCartney added.

“Otherwise it has some explaining to do. It will have some huge explaining to do. In the spirit of transparency and accountability, this is an instance where the Government can prove they are transparent and accountable when it comes down to the finances of the country. That is paramount.

My God. This is a biggie.”

The annual fiscal deficit measures how much the Government’s spending

exceeds its revenue, and Mr McCartney added: “What the IMF said is like getting a sack full of coal under the Christmas tree.” Time will tell who is correct, but if the IMF is right it will likely mean that the Davis administration’s ambitions of achieving a $109.2m fiscal surplus in the 2024-2025 Budget year will have to be pushed back.

The IMF itself is also less-than-optimistic about that forecast, projecting that instead of a surplus the Government will run a fiscal deficit equal to 2 percent of GDP - around $291m at current numbers in the 2024-2025 fiscal year.

While the Davis administration continues to work on new revenue streams, such as carbon credits, the implication is that fiscal consolidation’s pace will be much slower than forecast.

Mr Wilson, though, said it was “early in the fiscal year” and too soon to determine whose forecasts are the more accurate.

However, he signalled that the Government presently

remains confident it can hit the 2023-2024 fiscal targets almost five months into the period and, in so doing, boost the confidence credit rating agencies and domestic/international creditors and investors have in The Bahamas.

“We feel confident we are trending in the right direction,” the financial secretary told Tribune Business. “All our key revenue areas are up by double digits but it’s early. Most of our revenue comes in the second half of the fiscal period.

“I know we’re doing the work. If we’re doing the preparatory work we expect to see the fruits of our labour at the appropriate time. Once we do the preparatory work we’ll see the results. If we were not doing the work, I’d be concerned. I know we’re doing the work.”

The Government traditionally earns the bulk of its revenues during the calendar year’s first four months, or Budget year’s second half, which coincides with the winter tourism season’s

peak economic activity, Business Licence fee payments, the bulk of real property tax collections and commercial vehicle licensing month.

Mr Wilson pointed out that “all of our revenue measures take effect from January 1 next year”, including the increase in cruise departure taxes, which are forecast to neartriple from the $50.642m projected in 2022-2023 to $144.89m.

“Then there is the work we have done with the property tax register. Those property tax bills go out this month. There is the work we have done with Business Licence enforcement, and the new requirements for an audit take effect next year,” he said.

“We’ve done a lot of work legislatively as well as administratively, and believe we will see the fruits of those efforts in the next big revenue cycle between January and April next year. That will be the key. We have done more audits than ever before this

Nipped in the Bud: Brewery reversal over 40-year tie-up FROM PAGE B1 the latter would have exclusive distribution rights for Budweiser and the other brands in The Bahamas.

Both parties were to contribute an equal 50 percent share of the annual marketing budget for the Anheuser-Busch brands, with Burns House also obligated to “research” the so-called ‘grey market’ or “parallel imports” of the former’s products that were entering the Bahamian market illegally.

Burns House provided a guarantee, or $250,000 letter of credit, to Anheuser-Busch that was renewed annually.

“The parties worked well together for over 40 years.

Burns House always met its obligations under the distribution agreement. This is supported by the fact that Anheuser-Busch never had to utilise the letter of

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credit,” then-justice Charles wrote in her earlier verdict, “Burns House allocated specific human resources to Anheuser-Busch’s brands for the purpose of the distribution agreement. This included a senior brand manager exclusively for Anheuser-Busch brands and about three to four employees who were dedicated to the AnheuserBusch brands.”

But Commonwealth Brewery’s then-managing director, Hans Neven, and the company’s sales director alleged they were effectively ambushed, and blindsided, at an August 4, 2015, Miami meeting with Anheuser-Busch’s regional director where both the latter’s internal and external attorneys were present.

This was when Budweiser’s parent served notice of the plan to terminate the two sides’ distribution agreement by October 31, 2015. Lennox Paton, the Bahamian attorneys for Anheuser-Busch, confirmed the move in a subsequent August 12, 2015, letter to Commonwealth Brewery and Burns House. The initial three months’ notice was extended to December 1, 2015, making for threeand-a-half months.

“In the letter written by Lennox Paton on behalf of

the plaintiffs, the plaintiffs stressed that the decision to terminate the distribution agreement had nothing to do with the performance of Burns House as a distributor and wished to thank Burns House for its efforts during the years,” then-justice Charles wrote.

“The plaintiffs [Anheuser-Busch] ceased the supply of beverage products on September 15, 2015, despite giving threeand-a-half months’ termination notice. This was in response to the failure of Burns House to pay 74 unpaid invoices for beverage shipments supplied during the period June 7, 2015, to September 9, 2015.

To date, Burns House has not paid the invoices.”

Burns House argued then that the notice period was too short and threatened legal action for breach of contract, while Budweiser’s parent “asserted that their decision to terminate the distribution agreement with Burns House was a business decision which they were entitled to make so long as notice of the termination was given. No wrongdoing on the part of Burns House was alleged”.

Commonwealth Brewery, as successor to Burns House, argued that the notice period should have

been three-and-a-half years.

Anheuser-Busch initiated legal action for breach of contract damages, and the unpaid $598,512 invoices, while the BISXlisted brewer claimed loss and damages consisting of $145,202 in marketing expenses and $2.3m in lost profits.

Budweiser’s parent, in its appeal, argued that the competition posed by Commonwealth Brewery justified the short threeand-a-half month notice period. Besides the BISXlisted brewer being 75 percent by Heineken, one of its biggest global rivals, it added that its brands only accounted for 10 percent of its former Bahamian partner’s sales and could be easily replaced.

“Commonwealth Brewery also sold its Heineken and other comparable products, and could easily replace Anheuser-Busch brands with its own, and in fact did so. Anheuser-Busch brands accounted for only 10 percent of sales for Commonwealth Brewery,” the Budweiser and Michelob owner added.

“As there had been no recent capital investments for the relationship, and as the annual marketing expenditure was of little relevance (and was insignificant compared to profit), this would not imply a long notice period.

“As Heineken, one of the main global competitors of Anheuser-Busch, ultimately owned Commonwealth

Brewery, it was unreasonable to suggest that Commonwealth Brewery would use its best endeavours to promote Anheuser-Busch’s products over its own for an extended period of notice, knowing that it would need to promote its own products over Anheuser-Busch products as soon as the distribution relationship had ended.”

Sir Michael, identifying that the critical issue to be determined was whether the three-and-ahalf months’ notice was reasonable, said the two parties’ agreement “was never ‘formal’” in contrast to Justice Charles’ findings.

“It was informal and never reduced to writing,” he added.

“The judge does not refer to the fact that there was no prohibition against Commonwealth Brewery selling its own products in competition to that of the appellant, or to the obligation by the respondent to use its best efforts to promote the appellant’s products during the term of the agreement including the notice of termination period.....

“In the present case, the appellant’s business was less than 15 percent of the respondent’s [Commonwealth Brewery] business, and it was not required to lay off staff or make any significant adjustment to its business as a result of the termination,” Sir Michael added.

year for VAT and Business Licence fees, we have done the Family Island reassessments and our compliance programme is going well.

“We have good support from the commercial banks for real property tax, making sure mortgagees pay their property tax. We have done these things that have not been done before.

We fully expect to see the results of our efforts during the first four months of next year, and that will tell the story as to whether we achieve our revenue targets. I’m confident because we have done the work; no one can dispute that.”

Mr Wilson added: “The IMF have a much more conservative fiscal view than we have. They are very conservative. I think we’re OK. We always do adjustments, we always do measurements. We monitor revenues on a weekly basis.

You’re not going to see us increasing rates or anything like that.”

“Indeed, in this case, the judge accepted the evidence of the respondent’s general manager that ‘the separation nets more benefits than drawbacks, as it clears the way for us to truly promote the value of our brand without competing against ourselves with the brewer of Budweiser beers’. This is indicative that a short period of notice would be reasonable.”

Also finding that improvements to a preexisting warehouse’s refrigeration were for Commonwealth Brewery’s, rather than AnheuserBusch’s benefit, Sir Michael concluded: “In my judgment 15 months is a long period and well outside the range of reasonable notice.

It is not a short period.

“In making that determination I am influenced by the fact that the relationship was informal. The respondent was able to sell products that were in competition to the appellant, [and] the respondent was not required to make and did not make any significant expenditure after the initial period of the distribution agreement as a result of the agreement.

“It would be unreasonable to expect the respondent to discharge its duty to promote the appellant’s products during a long period of notice and, in particular, for 15 months after it has received notice of the termination. The three and one-half [months] was within the range of reasonableness and, in my judgment, the appellant was not in breach of the distribution agreement.”

THE TRIBUNE

Wednesday, November 29, 2023, PAGE 5

No ‘rush of blood’ on corporate income tax FROM PAGE B1 more progressive taxation options.

Speaking after the IMF forecast that The Bahamas’ 2023-2024 fiscal deficit will be near-triple what the Government is projecting, coming in at $379m as opposed to $131m, he acknowledged: “The push on corporate income tax, I think, is going to become a little more focused now given these types of projections.”

While the implications of the Fund’s analysis are that present revenue streams are insufficient to drive the pace and extent of desired fiscal consolidation, Mr Edwards told this newspaper: “Government should not have a rush of blood in moving to a corporate income tax. It should be very deliberate and strategic in its position.

“There may be an urgency, but work it in a very deliberate fashion to ensure the end result benefits the country.” Simon Wilson, the Ministry of Finance’s financial secretary, said yesterday that the Government is compiling all the feedback received from the ‘green paper’ consultation on corporate income tax that closed at end-August 2023.

Once that process is completed a recommendation

will be submitted to Cabinet for its consideration, with the hope this will result in the go-ahead to release a so-called ‘white paper’ that will trigger more detailed consultation with the private sector and wider society on the corporate income tax proposal.

Mr Wilson said it is hoped this will take place around the time of the midyear Budget in early 2024.

“We have the comments from the ‘green paper’,” he added. “We are compiling those comments, and the next step is to go to Cabinet with a recommendation.

That recommendation will probably lead to a ‘white paper’ on corporate income tax. We are hoping around the mid-year we should be able to provide a timeline.”

Most observers feel it will likely take several years for The Bahamas to implement an economy-wide corporate income tax, with such a rollout unlikely to occur before 2026, even if this nation complies with and enacts earlier the G-20/OECD’s 15 percent minimum rate for those entities that meet the 750m euro qualifying threshold.

Kwasi Thompson, the Opposition’s finance spokesman, yesterday said: “We need to understand what the Government’s plans are with corporate income tax and the global

tax issue. We need to understand what their plans are for adjustments to the Business Licence regime. These are relevant issues the IMF has raised, and what the Government must speak to the people about. What are the plans?”

The IMF, in its Article IV report, called for tax reforms that both raise revenues and make the Bahamian system more “progressive” by turning away from the regressive consumption-based levies that have dominated for decades, such as VAT and Customs duties.

“Beyond reducing the fiscal deficit, a set of comprehensive tax reforms would be valuable in both raising revenues and improving progressivity. In particular, the implementation of the OECD [15 percent] global minimum corporate tax by trading partners provides an opportunity for The Bahamas to introduce a well-designed corporate income tax accompanied by a personal income tax on the highest earners,” it added.

“There is also scope to significantly rationalise existing preferences, loopholes and exemptions in the tax system.” The call for an income tax on highearners, which the IMF has made before, is designed to prevent businesses evading/

Wall Street drifts to a mostly higher close and Treasury yields fall

By DAMIAN J. TROISE AND ALEX VEIGA AP Business Writers STOCKS drifted to a mostly higher close Tuesday following a strong report on consumer confidence and a boost to hopes that the Federal Reserve is finished with its aggressive interest rate hikes.

The S&P 500 edged up 0.1% after hovering between small gains and losses. The benchmark index is on track to close out November with its strongest monthly gain of the year.

The Dow Jones Industrial Average rose 0.2% and the Nasdaq composite eked out a 0.3% gain.

Gains in technology stocks, retailers and other sectors helped temper declines elsewhere in the market. Microsoft rose 1.1%, Tesla climbed 4.5% and Best Buy rose 2.4%.

GE Healthcare Technologies was among the biggest decliners, closing 4.2% lower.

All told, the S&P 500 rose 4.46 points to 4,554.89. The Dow added 83.51 points to close at 35,416.98, and the Nasdaq gained 40.73 points to 14,281.76.

Bond yields fell. The 10-year Treasury yield, which influences mortgage rates, slipped to 4.34% from 4.39% late Monday.

The yield on the two-year Treasury, which tracks expectations for Federal Reserve action, fell significantly, to 4.73% from 4.89% late Monday.

U.S. crude oil prices rose 2.1%.

Investors are closely watching several economic updates this week for more clues about how consumers feel and whether the rate of inflation is still easing. They are betting that the Fed will continue

to hold its benchmark rate steady. That sentiment was reaffirmed Tuesday

by Christopher Waller, a member of the Fed’s Board of Governors.

“I am increasingly confident that policy is currently well-positioned to slow the economy and get inflation back to 2%,” Waller said in a speech at the American Enterprise Institute, a Washington think tank.

The Fed will meet again in December to update its interest rate policy. The central bank had been raising rates to push the rate of inflation back down to 2% and has been closing in on that goal. Inflation has plunged from a peak of 9.1% in June 2022 to 3.2% in October.

Wall Street is also increasingly betting that the Fed could start cutting interest rates from their highest level in two decades by the middle of 2024.

avoiding corporate income tax by paying out profits to their owners in salaries.

The ‘green paper’ on “corporate income tax strategies for The Bahamas” revealed that none of the four corporate income tax options being considered will have a positive impact on Bahamian economic growth, employment, foreign and domestic investment with the fallout negative in all bar two instances.

The Davis administration, following studies by the Deloitte & Touche accounting firm, said it has to consider “the trade-off between raising government revenue at the expense of economic activity” in all four scenarios as it mulls historical changes that will potentially eliminate Business Licence fees for most companies and replace them with a corporate income tax.

It is intended to ensure The Bahamas complies and fulfills its obligations as one of 140 countries that have

signed on to the minimum 15 percent global corporate tax drive. In the first instance, this applies only to corporate groups and their subsidiaries that have a minimum annual turnover in excess of 750m euros.

The Government’s ‘green paper’ sets out the first option as merely introducing a 15 percent corporate income tax for all Bahamasbased entities that fall into that 750m-plus euro turnover category. The second and third options, described as “more nuanced” because of the better balance they strike between tax revenue and economic impact, are those the Government indicates it is giving more serious consideration to.

The second, labelled as “a soft introduction”, would introduce the same 15 percent rate for all those caught in the G-20/OECD net and also levy a 10 percent corporate income tax on all other businesses “to maintain regional tax competitiveness”.

The third option, branded as “simplicity driven”, would exempt or carve-out small businesses earning less than a $500,000 annual turnover to leave them still paying the existing Business Licence fee.

Bahamas-based entities in groups that meet the G-20/ OECD threshold would pay a 15 percent corporate income tax, and all other companies generating more than $500,000 would pay a 12 percent rate.

The final option, which would generate the greatest revenue increase for the Government but also inflict the harshest economic impact, is to simply impose the 15 percent corporate income tax rate on all businesses with a turnover greater than $500,000 per annum and a 10 percent on small and medium-sized enterprises earning less than that.

PAGE 6, Wednesday, November 29, 2023

THE TRIBUNE

Connecticut lawmakers seek compromise on switch to all-electric cars, after ambitious plan scrapped

By SUSAN HAIGH Associated Press A COMPROMISE plan to eventually end the sale of gasoline-powered vehicles in Connecticut could be worked out as early as next year's legislative

session, state lawmakers said Tuesday.

The move comes a day after Democratic Gov. Ned Lamont withdrew proposed regulations mirroring California's clean vehicle standards after it became apparent there wasn't enough support on

a key legislative committee. Those standards would have halted sales of new gas-powered vehicles by 2035.

House Speaker Matt Ritter, a Democrat from Hartford, said that his members plan to meet on Monday to discuss possible

legislation that addresses concerns about the regulations. Republicans and others say they're worried about the high cost of electric vehicles, the availability of charging stations and the ability of the state's electric grid to handle the anticipated changeover from

NOTICE

NOTICE

MOTHER OF PEARLS INC.

Bon Familia Inc.

In Voluntary Liquidation

In Voluntary Liquidation

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, MOTHER OF PEARLS INC. is in dissolution as of November 21, 2023

Notice is hereby given that in accordance with Section 138(4) of the International Business Companies Act. 2000, Bon Familia Inc. is in dissolution as of November 21, 2023

International Liquidator Services Ltd. situated at 3rd Floor Whitfield Tower, 4792 Coney Drive, Belize City, Belize is the Liquidator.

International Liquidator Services Ltd. situated at 3rd Floor Whitfield Tower, 4792 Coney Drive, Belize City, Belize is the Liquidator.

LI Q U I DAT O R ______________________

LI Q U I DAT O R ______________________ LEGAL NOTICE

CAROLINE SHIPPING COMPANY LIMITED (In Voluntary Liquidation)

Notice is hereby given in pursuance of Section 138(8) of The International Business Companies Act, 2000 (as amended), the Dissolution of the above-named company has been completed, a Certificate of Dissolution has been issued and the abovenamed company has therefore been struck off the Register. The date of the completion of the dissolution was the 20th day of October 2023.

gas-combustion engines to electric vehicles.

"We have to do more," said Ritter. "We have to demonstrate to Connecticut residents that this switch will not only save the environment, save lives, and save our planet — but not leave you in a position where you can no longer afford a vehicle."

Lamont's decision to withdraw the proposed regulations, a week after New Jersey became the latest state to announce plans to prohibit the sale of new gasoline-powered vehicles by 2035, was seen as a setback by some advocates.

Members of the public booed when the withdrawal was announced during Tuesday's meeting of the General Assembly's Regulations Review Committee.

A growing number of states are committing to California's aggressive plan to move toward zero-emission vehicles, including Vermont, New York, Washington, Oregon, Massachusetts, Virginia, Rhode Island and Maryland, according to Coltura, a Seattle-based nonprofit advocating for an end to gasoline vehicle use.

"Unfortunately, a misinformation campaign fueled by the fossil fuel industry won and Connecticut residents will pay the price," said Ruth Canovi, director of advocacy with the American Lung Association in Connecticut, in a written statement. She said Connecticut "is now positioned to be the only clean car state from Virginia to Vermont to leave our residents out of these strong public health, climate change, and health equity policies this year."

State Rep. Vincent Candelora, the Republican leader of the Connecticut House of Representatives, said he was pleased Lamont decided to withdraw the regulations.

"I'm hoping that this next look will take into consideration the affordability and the impact it's going to have on residents, especially people that live in the cities," he said. "So we really need a broader conversation, looking at the electric grid and the feasibility of being able to do something like this."

The new legislative session begins Feb. 7.

NOTICE NOTICE is hereby given that FLORENCE METELUS, East Street South, Nassau,The Bahamas, Bahamas 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 29th day of November 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

Bennet R. Atkinson Liquidator

NOTICE NOTICE is hereby given that SAJIN JOSE PONNORE, of P.O Box N-10806 #11 Shefeild Street, Nassau, The Bahamas 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 22nd day of November 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, New Providence, The Bahamas.

PAGE 8, Wednesday, November 29, 2023

THE TRIBUNE

GOV’TS DEFICIT NEAR-MISS AS VAT $160M OFF TARGET FROM PAGE B1 - quarterly as well as monthly filers - remit taxes collected from the endconsumer to the Public Treasury.

“They were $160m off the VAT projection,” one source said of the 20222023 full-year, “with the anticipation that VAT this year will go higher than last year’s projection. That’s a compounding issue. You based this year on what you thought you’d get last year, and VAT has not performed against projections.”

Simon Wilson, the Ministry of Finance’s financial secretary, yesterday suggested much of the VAT under-shoot was related to timing issues involving when real estate transactions close and the appropriate tax payment is received by the Department of Inland Revenue (DIR).

“VAT has a component linked to property transactions,” he explained.

“When you look at they key components of VAT, there are imports and domestic VAT. We are pretty much on target with those. It’s the one with land transactions where there tends to

be some fluctuations and so forth.

“With land transactions you can have tax avoidance, transactions structured in a way that makes it very difficult to realise revenue.

The revenue is there but it requires work, which includes VAT on imports.

We know it’s there but it requires work.”

Despite the VAT undershoot, the Government can take comfort from the fact it almost scored a direct hit on its total revenue target for 2022-2023. Total income came in just $1.5m below target at $2.856bn, with taxes on international trade and transactions, plus other taxes on goods and services both exceeding Budget targets to compensate for the VAT miss.

Some $675.4m in international trade and taxes were collected for the full fiscal year, beating projections of $616.3m by $59.1m or 9.6 percent, while $374.8m was generated from other taxes on goods and services. The latter beat forecast by 15.1 percent, or $49.2m.

Real property taxes narrowly missed their full-year goal of $169.4m, coming in $7.9m or 4.7 percent lower, at $161.5m as opposed to

$169.4m. However, non-tax revenues beat forecast by some 19.8 percent, reaching $380.4m as opposed to the $317.4m goal.

“If you look at the last fiscal period we achieved the revenue targets because we did the work,” Mr Wilson added. The Government was also able to contain its total and recurrent (fixed cost) sending slightly below Budget estimates even though debt servicing (interest) and subsidies to loss-making state-owned enterprises (SOEs) breached 2022-2023 full-year targets.

Interest payments on the Government’s debt were 2.3 percent higher than estimated, finishing at $573.1m as opposed to $560m in an environment where rising US and global interest rates raised payments on The Bahamas’ variable US dollar-denominated debt.

Subsidies, meanwhile, overshot by 7.5 percent to finish the period at $464.7m compared to $432.4m.

However, salaries and personal emoluments finished slightly below Budget estimates at $805.2m compared to the initial $827.9m allocation, while social assistance and pensions expenditure

was also less than planned, finishing 2 percent under projections at $227.4m compared to $232.1m.

The Government also generated an $18.2m fiscal surplus for July, the first month of the 2023-2024 fiscal year, which was less than half the prior year’s $41.3m. Total revenues were up slightly year-overyear, standing at $264m compared to $260.3m in July 2022, although tax revenues were up at $245.8m as compared to $232.1m in the prior year.

Total spending, though, increased by 12.2 percent $245.9m as compared to $219.1m in July 2022, representing a $26.8m rise.

Recurrent spending, which covers the Government’s fixed costs such as salaries and rents, rose by $17.4m from $216.3m in the prior year to $233.7m.

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Mr Wilson, though, told Tribune Business that the spending increases were in line with Budget forecasts.

“July was in line with expectations,” he said. “Given the cyclical nature of the way we operate our Budget

we’re pretty much on track.

We cannot be satisfied. We have to keep working at it.

Last year was good but we have to move on. We can’t work historically. We have to keep pushing forward.”