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This Week in The Bahamas Commentary by Elcott Coleby: Mar 27 - 31
By Elcott Coleby
Apr 1, 2017 - 9:52:55 PM

This Week in Parliament

Even though the amended labour bills (the Employment Act and the Industrial Relations Act) passed the House on Wednesday of this week, the highlight of the sitting was the much anticipated comprehensive Value Added Tax (VAT) report delivered by Prime Minister Christie, the country’s Finance Minister.

As expected, the Prime Minister outlined the legal framework governing public finances such as Article 128 (the Consolidated Fund), Article 136 (the Auditor General) and the Financial Administration and Audit Act. This was necessary to establish from the onset that the government acted according to law in its administration of public finances, inclusive of VAT.

Making the case for the necessity of VAT, Mr. Christie had this to say.

“We were spending more than $500 million than we earned in 2012. Today we have reduced this excess of spending over earnings to an average of less than $400 million and excluding natural disasters to an average of less than $250 million. Therefore debt accumulation has decelerated” said Prime Minister Christie.

Other highlights of the presentation include the follow:
In the simplest terms, VAT revenue goes towards three (3) things: tax reductions; funding of expenditure, and deficit and debt reductions being the residual outcome.

Some $1.14 billion was collected in respect of the VAT in 2015 and 2016.

Of this total, the Department of Inland Revenue collected $726 million: $316 million in 2015 and $410 million in 2016.

The Department also refunded some $20 million in VAT over these two years.

The Department of Customs collected $415 million over the two-year period: $209 million in 2015 and $207 million in 2016.

The highlights of the revenue foregone as a result of these tax relief measures are as follows:

Customs and Excise Duties (2015 & 2016) -$86.0M
Customs and Excise Duties (2016) -$48.9M
Change to Free On Board for Customs and
Excise duty calculations (2015& 2016) -$60.0M
VAT on conveyances under $100,000 -$ 7.0M
RPT property tax rate changes:
Owner-occupied -$0.7M
Residential -$0.5M
Commercial -$2.5M
Business License rate from 1.75% to 1.5% (2016 & 2017) -$38.2M
Real Property Tax waiver order (under $250,000) -$14.0M
Real Property Tax amnesty -$0.2M
Real Property Tax pensioner discount -$0.2M

Including the fiscal impact of the elimination of the Hotel Occupancy Tax ($85.0 M), and VAT refunds ($20.0M) the total reductions is $344 million in foregone revenue since VAT introduction. Therefore, VAT gross collections over the 2 year period were $1.1 billion but the net impact on revenues to the Government was $756 million.

In summary, 40% of the VAT revenue went towards reducing the deficit, 30% replaced revenue foregone from tax reductions and the remaining 30% went towards general expenditures.

“Every single dollar of revenue is fully accounted for each and every year and is subject to audit by the independent Auditor General” concluded Prime Minister Christie.

The government also established a website: www.understandingvat.org to enhance public education on the administration of Value Added Tax.

The Prime Minister also announced that the Government had approved the relaxation of certain Exchange Control measures to provide access by certain categories of Bahamian-owned businesses to investment financing in foreign currency.

In delivering his government’s mid-year budget statement, Prime Minister Christie pegged the budget deficit at $350 million due mainly to expenses in connection with Hurricanes Joaquin and Matthew. He also told House members that Government spent $35m on hurricane-related expenses as of January 31.

Prime Minister Christie announced that the BTC Foundation Fund, under the administration of Royal Fidelity, has accrued almost $1.3 million since it was established in 2014 and that its latest dividend was $299,000.

The government announced the extension of the Exigency Order for another ninety days to further assist persons affected by Hurricane Joaquin and Matthew.

The re-engineering of the New Providence Landfill will include a baler facility, air quality monitoring, and a fire station among other features, said Minister of Environment and Housing Kenred Dorsett.

In other Parliamentary news, the Senate met to consider the Homeowners Bill, the Criminal Procedure Code and Trafficking In Persons and Suppression (TIPS) legislation. That body will meet again on Monday to debate the amended labour bills.

Minister Gibson lauds “tax Holiday” 90-day extension

With more than 8,000 Bahamians already benefitting from not having to pay import duties and Value Added Tax on a number of items, the government – realizing that many Bahamian families are still hurting – extended the duty free period or ‘tax holiday’ – bringing much needed relief to many more Bahamian families said Labour Minister the Hon. D. Shane Gibson.

Prime Minister the Rt. Hon. Perry G. Christie made the announcement in Parliament on Wednesday, 29th March. The effective dates are the 5th April to the 5th July.

“This is welcomed news for many Bahamian families and further demonstrates the compassion that has been the hallmark of the Christie administration. This is indeed the right decision in the circumstances” the Minister said.

Shortly after Hurricane Matthew in October 2016, the Bahamas government waived import duties and taxes on building materials, plumbing fixtures, electrical fixtures, furniture, household appliances, and flood damaged vehicles for a period of six months. The import taxes on bottled water were waived for ninety days.

Additionally, the government extended loans to government employees to facilitate post hurricane repairs to their homes and other personal properties. Farmers and fishermen were also given financial assistance by the government to assist these small businessmen in resuming their business operations interrupted by the storms and to jumpstart family island economies negatively impacted by these massive Hurricanes.

Minister Gibson also pointed out that the government has assisted scores of Bahamian families in rebuilding their homes.

Minister Mitchell on ILO Initiated Labour Investigations...

The Ministry of Foreign Affairs & Immigration issued the following statement on Wednesday of this week indicating that it has addressed the issue of allegations that certain workers' passports had been withheld in The Bahamas.

This issue was raised in the House of Assembly more than one week ago by Deputy Prime Minister the Hon. Philip Brave Davis.

The Minister of Foreign Affairs & Immigration Fred Mitchell MP on Monday 27th March, met with representatives of the National Congress of Trade Unions (NCTU) in their capacity as one of the tripartite representatives of the International Labour Organization (ILO).

The Minister said "They indicated that the ILO had asked them to investigate the claims that the passports and work permits of certain workers were being held in violation of the law and their rights in The Bahamas. They identified the property.

"The Department of Immigration has investigated these allegations. Having met with the officers of the company, the Department reminded the company of its obligations in law. The Department was assured by the company that the practice does not now obtain and where it once did was ceased forthwith.

The Minister further noted that "...The Department of Immigration will be doing spot checks throughout the coming days without notice to employers to ensure that all companies meet their obligations and conform with the accepted practice with regard to this. The Department of Labour has also been asked to follow up on job sites as well. The Attorney General has been briefed on the matter.

"All employers in this country are reminded that each employee who is a foreign national cannot consent to surrender their passport to an employer nor can he consent to surrender that employee’s work permit. The documents should be in the employee’s possession at all times."

Attorney General launches new electronic Bail Management System

Sen. Hon. Allyson Maynard-Gibson, Attorney-General and Minister of Legal Affairs, along with Minister of National Security, Hon. Bernard Nottage, launched a new electronic Bail Management System on Thursday, March 30.

This new system will allow for the online and electronic processing of bail applications, persons who are granted bail, Suretors, as well as police station check-ins.

Using biometrics technology, the Bail Management System represents a continued effort by the Office of the Attorney-General to track and crack down on persons acting as Suretors for more than one person’s bail.

The launch of the New Bail Management System comes after two (2) amendments to the Bail Act were passed—one in 2014 and another in 2015. The 2014 amendments augmented the law to:

• Make it the burden of the applicant to satisfy the court that bail should be granted;

• Ensure that the protection of the victim is of paramount importance in cases where violence was involved, and

• Require that an individual state that they are not currently a surety in any other proceedings.

The Bail Act was further amended in 2015, criminalizing breaches of the bail terms, punishable by up to five years imprisonment, a fine of up to $50,000 or both.

A demonstration, led by Bahamian firm Multimedia Technologies Ltd., will be conducted for the media on Monday, 3rd April 2017 at the Office of the Attorney General.

BAMSI hosts post-harvest workshop

As part of the government’s thrust toward food security, the Bahamas Agriculture and Marine Science Institute, BAMSI, hosted a Post-Harvest Training Workshop for 30 participants from various areas in the Ministry's departments, March 27, in St. Matthew's Parish Hall on Church Street.

Addressing the issue of waste during food harvesting and handling was BAMSI President and FAO Ambassador HE Godfrey Eneas.

"We live on a planet where millions are hungry not solely because they lack access to food, but owing to the fact that tons of food are wasted. Food loss is a major issue for mankind. This is the situation at the Global level.

"At the Caribbean Region level we are a food deficit region meaning that we depend on others to feed us. Our food production systems are not producing enough food to meet our demand; hence food self-sufficiency is a major goal."

Mr. Eneas pointed out that the quantities and types of food imported into our region are highly influenced by the fact that most of our economies are tourism driven. He urged Bahamians to recognize that "Tourism, particularly in The Bahamas, is determining our diet," indicated by the number of American franchise operations within our midst.

In Passing…

The School of Social Sciences of the University of The Bahamas held its second pre-election panel discussion at the Performance Arts Center on the university’s campus. Representatives from the PLP, FNM, DNA, Gate Keepers and the African Socialist Party were represented. Environment Minister the Hon. Ken Dorsett outlined the government’s energy and environmental policies.

The PLP held its traditional Church Service ahead of the official launch of its candidates at the Golden Gates World Outreach Center. In his keynote address, Prime Minister the Rt. Hon. Perry G. Christie reminded supporters of the core values of the PLP – caring for the weakest, the poorest , the most vulnerable – the least of our brethren among us.

At a rally in Winton on Tuesday, FNM Leader Dr. Minnis blamed Prime Minister Christie and the PLP for Bahamians losing over $450m in salaries and wages due to their involvement in stopping the bankruptcy proceedings of Baha Mar. In a response, PLP Chairman Bradley Roberts questioned Minnis’ understanding of Baha Mar and the proceedings.

In response to media enquiries and for general information, the Ministry of Foreign Affairs & Immigration announced on Tuesday that The Bahamas has invited representative as international observers from four international organizations or nations to observe the upcoming general elections, including the Caribbean Community (CARICOM), the Commonwealth of Nations; the Organization of American States (OAS); and the United States of America.

Baha Mar’s president has pushed back at “baseless” and “untrue” allegations contained in an open letter to the Gaming Board, which accused the resort’s buyer of being allegedly associated with “international crime” organizations through its link to a Macau gaming group.

According to the Bahamas Investor, Edison Sumner, CEO and president of the Bahamas Chamber of Commerce and Employers’ Confederation (BCCEC), says that the organization is pleased with the progress being made at the multi-billion dollar Baha Mar resort on Cable Beach and urges stakeholders to continue to encourage foreign investors.

Official Oppositions Leader Butler-Turner revealed that she had an informal “conversation” with someone in the FNM but the talks fell apart when she was offered a seat other than Long Island.

An initial assessment of air quality around the Aquinas College campus has shown a substantial reduction in air quality on days when smoke is in the area – in some case 71 times worse than on clear days.

Police arrested a man from Eleuthera and brought him to the capital last night to be questioned in connection with a “voter fraud” investigation, with Assistant Commissioner of Police Stephen Dean warning the public that the RBPF will take a “no tolerance” approach to such matters.

Concerning the management of the New Providence Landfill, the Bahamas government has made a decision to send the management contract out to public tender.

A NIB executive says an increase in unemployment benefit applications shows “all is not well” with the Bahamian economy, with new contributors to the social security scheme declining.

Negotiations over the Employment Act reforms went into effect this week in the wake of passage the amended labour laws in Parliament.

New Providence farmers said they were “totally depressed” by the rampant theft of livestock and goods from their properties, which has increased in frequency since Hurricane Matthew.

Upgrades at the Gladstone Road Feed Mill intended to provide uninterrupted power supply and higher quality feed have been halted for nearly two years due to a disagreement between the project’s consultant and the Bahamas Agricultural and Industrial Corporations (BAIC), Agriculture Minister V. Alfred Gray confirmed yesterday.

Discussing his administration’s fiscal performance in the first half of this year, Mr. Christie noted that Hurricane Matthew had a direct impact to the Government of over $300m.

Minister of Labor Shane Gibson hit back at social media rumors that the Government was cancelling health coverage for members of the armed forces once NHI comes on stream. There is no end to fake news in this country.

The Bahamas Weekly reported that clinic expansions and renovations of almost $10 million across The Bahamas will address chronic, non-communicable diseases at the primary healthcare level.

Environment Minister Kenred Dorsett revealed on Thursday that the massive blaze earlier this month at the public landfill was the result of thieves burning wires in search of copper.

Machel Montano and Bunji Garlin, the Trinidadian singing stars, will headline this year’s Bahamas Junkanoo Carnival, officials of the Bahamas National Festival Commission revealed Thursday. BNFC CEO Roscoe Dames also said the event will be streamlined compared to past years because of financial constraints.

At a rally on Thursday night at Arawak Cay, FNM Leader Dr. Minnis last night blasted Prime Minister Christie’s explanation how his administration handled the $1.14bn in VAT accumulated during 2015 and 2016, accusing the Government of having a “pile of money” and wasting it.

The inhumane practice of “slopping” is still alive in the over-crowded maximum security block at the Bahamas Department of Correctional Services, Fox Hill, according to Commissioner of Corrections Patrick Wright.

Transport and Aviation Minister Glenys Hanna-Martin Thursday announced at a press conference at the Department of Corrections that 15 to 20 persons will be deployed to manufacture license plates the week of May. She was accompanied by National Security Minister the Hon. Bernard J. Nottage.

In commenting on the Road Traffic Department’s new automated licensing system, Hanna-Martin accused Auditor General Terrence Bastian of “guesstimating” while conducting his most recent audit of the Road Traffic Department claiming that the department’s current proceeds “do not correlate” with its estimated annual revenue losses in Mr. Bastian’s report. The Minister pointed out that current recorded revenue collections at the RTD are generally in line with the same period under the manual system, but did say that the Auditor General was working with a manual system.

The Ministry of Foreign Affairs & Immigration announced on Friday for general information that all Bahamas Foreign Service personnel and officers of The Bahamas Tourist Office in the city of Atlanta are safe and accounted for following the collapse of a section of interstate highway in that area on Thursday 30 March, 2017. According to the release, there are presently no indications that any Bahamians in the area have been adversely affected.

The Bahamas Weekly reported that the country’s fisheries industry is experiencing higher yields as a result of the enhanced naval/military operations being conducted throughout The Bahamas by Officers and Marines of the Royal Bahamas Defence Force.

With Friday being the deadline for first-round signups of primary care physicians under NHI, Guardian Business has gotten a first look at the possible capitation schedule for outpatient services. According to the “confidential draft”, capitation for providers under NHI could range from $24 per patient at the low end for “telephone services”; $60 for an “intermediate visit”; $66 for a “periodic health assessment” for new patients; and $78 at the high end for a “complex visit”.

Officials of the Customs, Immigration and Allied Workers Union (CIAWU) and representatives of Police, Prison and Defence Force Officers yesterday expressed concerns that they may lose their medical insurance benefits if the Government has its way. Sloane Smith, president of CIAWU, accused Labour Minister Shane Gibson of trying to force the union to agree to incorporate a NHI component in an agreement they had already agreed to and were about sign off on. Minister Gibson denied this assertion in Parliament the night before.

The Cabinet Office on Friday advised the public that a State-Recognized Funeral will be held for the late Bishop Samuel Roland Greene at Zion Yamacraw Baptist Church, Yamacraw Hill Road, on Saturday, April 1, 2017 beginning at 10:00 a.m. Mr. Green served as Undersecretary in the Ministry of Education, former President of the Bahamas Christian Council and a former President of the Zion Baptist Union.

About the author: Elcott Coleby is a Deputy Director at the Bahamas Information Services. He holds a Bachelor of Science degree in Chemistry (B.Sc) and a Masters of Business Administration (MBA). He provides frequent commentary on public policy and communicates the works of the government. Address all comments to the following email: egcoleby44@gmail.com