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'Going underground is no solution for web shops'

By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

GAMING operators opposing the government's impending sliding taxes for the industry who may "go back underground" were warned not to try their luck by Free National Movement Senator Juanianne Dorsett, who yesterday blasted the "newly legitimated entrepreneurs" for their luxurious habits.

"I can't say that my heart bleeds for this handful of newly legitimated entrepreneurs who operated illegally for many, many years and made millions of dollars without paying a dollar in taxes," Mrs Dorsett said during her contribution to the 2018-2019 budget debate yesterday.

"I cannot say that I sympathise with these entrepreneurs who boast their multi-million dollar homes and multiple properties on Paradise Island and other upscale communities, their yachts and jets and luxury cars.

"Madame President, when the business of gaming was illegal it was operated by this same small handful of persons, the Bahamian people decided that they did not want this activity to become part of our economy," she said, referring to the failed 2013 gaming referendum.

Taking the entire industry to task for its intense opposition to what she characterised as the government's push to reduce the national debt, Mrs Dorsett said Bahamians should not fall prey to the political ploys of the various gaming operators, who she contended were soundly rejected once before.

"(Bahamians) did not want it to be made legal, but the (Christie administration) decided that, regardless of what the people wanted, they would legitimise the gaming industry anyway.

"So they legalised the illegal gambling and rewarded those persons who were operating illegally, who were engaging at the time in what was then a criminal activity, by allowing them a monopoly on the gaming business.

"And they taxed them at a mere 11 per cent.

"Since they were legitimised, they have grown at an unbelievable rate to the point that there is hardly a neighbourhood in New Providence where you won't find a gaming house.

"And I understand they have presence in most of the Family Islands. Based on the way they are growing, we can only assume that as an industry they are doing well," Mrs Dorsett said.

"Madame President, they, like the rest of us, don't want to pay increased taxes--and I get that. And I agree that no industry or sector of the economy should be taxed based on the fact that they are profitable. But no industry can dictate to the government how it should tax them."

Mrs Dorsett said if such a move were allowed, no Bahamian would opt to pay their fair share of taxes.

"And I don't buy their argument that this tax is discriminatory," she continued.

"I find it interesting, Madame President, some of the gaming bosses are threatening to go back underground because of the increased taxes.

"But, Madame President, I seriously doubt that, after all the PLP did to bring them out from underground, so that they can participate unfettered in the economy like other business people, that they would choose to go back to operating underground, no matter how they are taxed."

Besides, Mrs Dorsett said: "These are smart people - very smart people. So I know that they realise that, should they go back underground, they would find the underground today to be quite different from the underground in which they operated in earlier times; and they will not survive it. You don't have to take it from me - ask Marvin Dames."

Some operators have threatened staff cuts to push back against the government's impending new sliding tax scale system, which comes into force in just one week.

ASure Win web shop last week said it would close 11 sites and terminate about 50 workers by the end of this month, citing underperforming locations. The impending increase in taxes forced it to make fundamental business decisions concerning the future sustainability of operations, the company said in a statement.

Island Luck has further warned 350 of its employees could be sent to the unemployment line.

Paradise Games has also foreshadowed the same action, although it has not intimated the number of cuts it is considering.

Meanwhile, FML Group of Companies has gone against the grain, saying on Sunday he will not lay off employees prematurely, but will wait to see how the tax hikes affect the sector.

Prior to being appointed to the Senate by Prime Minister Dr Hubert Minnis last year, Mrs Dorsett served as the member of Parliament for Fox Hill from 1997 to 2002.

Comments

birdiestrachan 6 years, 5 months ago

MS: Dorsette does it not appear strange that a business that you say the Bahamian people rejected did not want. has become such a huge success and makes so much money.

What it shows is that a whole lot of people are gambling and it includes many who voted \NO

DDK 6 years, 5 months ago

...and that's a whole lot of addicts that are feeding these wonderful businessmen at the expense of the very economy and life of our country.

sheeprunner12 6 years, 5 months ago

This is a Catch22 for the Numbers Cartel ....... If they remain in business, they will have to pay the new tax scales ...... If they go underground, they have to avoid Dames & Fergs ..... Tuff

BahamasForBahamians 6 years, 5 months ago

What idiots like Dorsette and the Cabinet have missed is that going underground does not mean it is illegal.

Take for instance companies like eBay, Amazon, Walmart Online..

These companies make millions in sales from Bahamians in The Bahamas (not Bahamians traveling to Florida - but Bahamians IN The Bahamas) while contributing less than dollar to the tax regime here in the country. Technology makes it possible for us to spend with companies like eBay and Amazon without paying VAT or without a sliding scale of taxes.

They are licensed and able to conduct business in their relevant countries but their reach is endless.

A newly formed Island Luck, incorporated in a fair jurisdiction (like the Isles of Mann) with a stable tax structure could easily make it available for all with access to the internet - including Bahamians - to game and spend money with them. The government in this scenario gets $0 in taxes and the employment complement is 0.

I'm not sure this is what the government wants or whether they've considered this "underground approach" and how it is beyond their reach to police.

ohdrap4 6 years, 5 months ago

nonsense. when amazon ships to a courier, i pay vat and duty on the packages arrival.

when a bahamian goes to a relative's home or has it delivered at the hotel in miami, he brings back the stuff with him, he pays vat and duty beyond the 500 exemption.

only thing we do not pay vat on is software or music purchases. however, in the future, the technology may exist that allows the govt to collect vat on that.

John 6 years, 5 months ago

This woman missed the bus completely and it wasn't the 15A. The saying in economics is "bad money chases away good money". So the web shops are now clean and legal, licensed businesses in the economy. But assume that the new tax burden forces these web shops to reduce their payout rates so low that someone gets the idea, I will sell numbers, but rather than throwing a ball, I will go with whatever Flowers throw in the mornings and what Island Luck throws in the evening. Since I have no physical locations, and I pay no license fees and pay no taxes, my payout (winnings) will be twice what Flowers or Island luck's are. And since I will have no gaming paraphernalia the police cannot charge me with no crime, much less convict me. And so this guy manages to operate an underground business that can pay out higher winnings and is more profitable. So because of the demand, others pursue the idea. Business at the licensed shops fall off drastically and instead of realizing increased taxed revenue, there is actually a decrease. So some web shops close their doors and others decide to chase the underground market. And so the country is back to square one where a multi-billion dollar industry operates 'underground. The government gets no revenue and employment numbers to shrivel because persons are afraid to work in an illegal business. ANd since they cannot deposit their monies in banks or they are afraid to, much of it is smuggled out of the country.And when the government tries to tax, license and regulate them for the second time it will be near impossible, because the numbers boys were had, hoodwinked and bambozzled the first time

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