Published On: Mon, Jun 18th, 2018

Near riot in The Bahamas over proposed tax increases

Bahamas_protestNASSAU - A near riot broke out in the downtown area of Parliament Square in Nassau, the capital of The Bahamas, as hundreds of protestors gathered, tore down steel barricades separating them from security forces and the House of Parliament as they marched in protest against a proposed value added tax (VAT) hike from 7.5 percent to 12 percent, set to come into effect at the start of the new fiscal year on July 1, in addition to a proposal to tax gaming/lottery operators.

The protest, organised and led by local activist and former senator, Rodney Moncur, who is currently employed with one of the largest gaming operators in the country, Island Luck, as a talk-show host for the operator’s television station, Island Luck Television Studios, took to the streets a show in solidarity as protestors in town screamed chants of “Keep ya corned beef” — a jibe at the budget proposal’s trade off of lowered duties on corned beef and other canned items a part of a list of breadbasket items proposed to be exempted from duties and VAT.

The protest swelled as gaming house operator, Island Luck, owned by Sebastian Bastian, who is also the chairman of the Bahamas Gaming Operators Association, allowed his workers to attend the protest and had them take an involuntary day off from work to attend the rally.

Bastian stated that over 3,000 jobs are at stake if the proposed taxes on gaming houses take effect, putting in jeopardy the industry and thousands of lives of persons who have come to depend on the industry as a means for employment.

The gaming industry, which was projected to generate an estimated (US$700 million to $1 billion, was a primary target for the new tax proposals by the current Free National Movement (FNM) administration as they saw the industry as undertaxed and under-supervised by previous governments, first operating illegally as gaming and lottery houses before they were regulated and made legitimate in 2014.

The BGOA has also threatened the government with legal action if these proposals take into effect, citing the unfairness of the taxes versus other sectors that generate the same or more revenue annually.

Web shops, under the former Progressive Liberal Party (PLP) government’s proposals in 2014, currently pay either 11 percent tax on their gaming revenue or 25 percent of earnings, whichever is greater, plus an additional 2 percent cut of revenue to help fund social causes.

The new budget calls for a variable tax rate, starting at 20 percent on revenue up to BSD20 million (US$20 million), rising to 25 percent on revenue up to $40m and incrementally thereafter, while any operator lucky enough to generate revenue over $100 million will face a 50 percent tax rate.

Ministry for finance, Peter Turnquest, explained in his budget communication at the start of the budget debate that gaming houses that make revenues up to $20 million will be taxed at a rate of 20 percent; those that make between $20 million and $40 million will be taxed at a rate of 25 percent; those that make between $40 million and $60 million at a rate of 30 percent; those making between $60 million and $80 million at a rate of 35 percent; those making between $80 million and $100 million at a rate of 40 percent; and the gaming houses bringing in more than $100 million at 50 percent.

Also, customers will face a new 5 percent tax on their deposits. Conversely, the government isn’t advocating a similar customer tax at Bahamian casinos, which are accessible only by international tourists.

The protestors were also greeted by several members of parliament from both sides of the political divide.

Minister for transport, Frankie Campbell, who was warned by police officers not to approach the angry crowd, was heckled at the event as ethnic slurs were hurled at him as a result of his part-Haitian heritage (Campbell’s mother being of Haitian descent) and also had water thrown on his him during the protest by an assailant who was promptly arrested.

Other government ministers who attempted to meet protestors were also left in shock and disappointed at how vocal the protestors were at the proposed tax increases, and said that they wished to have more of a dialogue as to why these things must take place and it is for the best in the long term.

One video saw minister for national security, Marvin Dames, scurrying away from angry protestors and other videos saw minister for financial services, Brent Symonette, moving quickly into the House of Parliament before giving a brief wave to the protestors.

Members of the opposition PLP also came out and were greeted a bit more warmly than those on the government side, despite the fact that it was their previous administration that first introduced VAT at 7.5 percent after much wrangling and debate to get the finally implemented 7.5 percent down from their administration’s initial 17 percent and then 15 percent VAT proposals.

Ministry of finance officials, inclusive of Turnquest, said it was the former administration’s intention to move forward with the 15 percent had they won office and that his government sought to implement a more modest and workable 12 percent especially if his administration made the necessary cuts in expenditure and cut out the wasteful spending that was bleeding the country dry.

Former prime minister and immediate past minister for finance, Perry Christie, as well as his junior minister for finance, Michael Halkitis, went on record recently and categorically denied the statements that it was their administration’s intention immediately to raise the VAT to 15 percent or 17 percent for this 2018-2019 fiscal year.

With the budget debate continuing to the July 1 deadline for the 2018-2019 fiscal year, sources within the ministry have told Caribbean News Now that the new rates are set and it would be extremely difficult for the government to adjust these new rates and tax-hike proposals prior to the deadline.

By Youri Kemp

Click Tag(s) for Related Articles:



-- ADVERTISEMENT --