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G.B. Chamber President speaks to Sunrise Rotary Club
By Grand Bahama Chamber of Commerce
Jan 15, 2015 - 2:40:55 PM

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Presentation to the Sunrise Rotary Club

Freeport, Grand Bahama

January 7, 2015

Kevin D. Seymour, President

The Grand Bahama Chamber of Commerce

2015 Grand Bahama’s Watershed

On January 1, 2015, the Government of the Commonwealth of The Bahamas rolled-out the Country’s New Value Added Tax Regime against a tidal wave of opposition, trepidation, and scepticism. The Government argues that such tax reforms were necessary, inter alia to broaden the country’s tax base and to address the vexing issues of a burgeoning national debt which has now reached $6 billion and recurrent deficits in the order of $500 million. The reaction from the Country’s taxpayers in the immediate aftermath of what has been described by many as being a haphazard and ineffectual roll-out, ranges from outrage and disbelief to a disconcerting apathy that the world did not come to an end last Thursday and that we the taxpayers just have suck it up.

As you are no doubt aware, The Grand Bahama Chamber of Commerce has been, and continues to urge its members, where required by law, to become VAT registrants. You may recall in the months leading up to the implementations of VAT, the GBCC formally communicated its views on tax reform to the Government. In summary the GBCC took the view that:-

1. More time was needed to properly assess the Governments proposal and that the proposed roll-out date was unrealistic;

2. The implementation of VAT will likely cause inflation in the near term and had the potential to prolong an already deep recession;

3. Government should implement measurable controls to significantly control leakage and put in place a modern and effective system for tax collection;

4. The implementation of VAT should be accompanied by a plan to significantly reduce government expenditure especially in the area of salaries and emoluments;

5. Any tax reforms adopted should be progressive as opposed to regressive in nature, and finally;

6. Any tax reforms adopted must recognize and respect the terms of the Hawksbill Creek Agreement.

In response to our recommendations and those of countless others, the Government did ultimately agree to defer the implementation date of VAT and also reduce the proposed rate from 15% to 7.5% in part to allay concerns about inflation. However, key areas which remain unaddressed are, the Government’s plan for reducing expenditures, controlling leakage and recognizing and respecting the terms of the Hawksbill Creek Agreement as it relates to taxation.

These unaddressed issues coupled with the extension of the tax exemptions due to sunset in August 2015 (i.e. real property taxes, business license and other taxes) and partnering with The Grand Bahama Port Authority and the Central Government to re-ignite Grand Bahama’s economy as set out in the Chamber’s Vision Paper, entitled, “Grand Bahama 2015 and Beyond” forms the bases of the Chamber’s agenda for this watershed year of 2015. I will now briefly touch on these agenda items:-

  • The Grand Bahama Chamber in collaboration with the Bahamas Chamber of Commerce and Employer’s Confederation and other member bodies, will continue to lobby Government for the implementation of a Freedom of Information Act and more particularly a “Fiscal Rule,” to ensure that the collection of taxes is accompanied by disciplined spending;

  • The Grand Bahama Chamber will partner with the GBPA, DEVCO and the Licensees to lobby Government to extend the aforementioned tax exemptions due to expire in August to the year 2054, and remove the concomitant uncertainty associated with this issue;
  • As it relates to VAT, the Grand Bahama Chamber of Commerce will lobby the Government to afford “VAT Free” status to the provision of services between GBPA Licensees, in a similar fashion to what is being done for the Schedule 2 Goods, as defined under the Hawksbill Creek Agreement;
  • The Grand Bahama Chamber in collaboration with the GBPA and Central Government will move to transform the ideas for growth and expansion to the local economy articulated in its Vision Paper into action.

Notwithstanding the challenges the GBCC will likely face in pushing its 2015 agenda, my team is fully committed to ensuring that the goals that I have articulated here this morning, are achieved within the shortest possible timeframe. We therefore invite those of you who are not members of the GBCC, to join our ranks by becoming members, since there is always strength in numbers and quite frankly, the cost of failure in this year of transition, is simply too great to fathom.

I take this opportunity to wish you and the entities that you are associated with, a productive and successful New Year!

Thank You!

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