The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Abaco’s business and civic leaders yesterday united to plead with the Davis administration for an up to two-year extension of the island’s Dorian tax breaks so it can come “back to full economic throttle”.

Daphne Degregory-Miaoulis, Abaco’s Chamber of Commerce president, said the Government’s only response to their calls to-date was a letter from the Ministry of Finance “requesting empirical data to justify our request”.

She added: “The only data we have been able to confirm is 30 percent of homeowners have not met the requirement to have power connected, which means they have not been able to repair their homes... We are exactly nine weeks away from December 1, and no knows what is going to happen.

“Will all concessions be removed? Will some concessions be removed? Will there be an application process? What about people who still need to rebuild but are not able to return or afford to rebuild? Will any further possible concessions be allowed? Will it only be for individuals on an import-by-import basis? Or will it include local vendors? These are just some of the very important questions not being answered.”

The joint call is the latest phase in efforts by Abaco’s business and community leaders to persuade the Government to extend the Dorian-related tax breaks and other concessions for at least another year to aid, and speed-up, the island’s bid to recover from the devastating Category Five storm that was estimated to have cost $3.4bn in combined economic losses and damage.

The present Special Economic Recovery Zone (SERZ) regime, which underpins the tax breaks for both Abaco and Grand Bahama, is currently set to expire on December 1, 2022.  Senator Michael Halkitis, minister of economic affairs, at last month’s Abaco Business Outlook conference gave a strong indication that the Davis administration is leaning away from renewing the present “blanket” exemptions for Abaco and Grand Bahama.

He asserted that the present wide-ranging concessions regime was “not optimal” and cannot “go on for ever”, hinting that the Government may switch to a framework where tax breaks were granted on a case-by-case application basis.

The Davis administration has previously signalled it feels the existing SERZ is giving away too much revenue in tax breaks. It reimposed VAT on construction services, with the Ministry of Finance stating at the time that concessions were being granted to wealthy second homeowners who did not need them to rebuild their properties.

Ministry of Finance officials also subsequently said the SERZ and related tax breaks were being abused for tax evasion and other illicit purposes, with vehicles and other expensive items imported using the VAT and duty exemptions turning up at Potter’s Cay in Nassau and other locations outside the Dorian hit areas.

Rev Paulette Cartwright, president of Abaco’s Christian Council, joined the private sector yesterday in backing calls for the tax breaks to be extended on the basis that Dorian has left the island “down in the dumps”. She explained: “It’s been three years of struggle, and the struggle is still here and the struggle is very real.

“There are some people who have made some progress, some are trying to find their way, and some are bogged down in the rubble of everything that happened to their lives. Our people need some form of hope. That hope can come to us today in the form of the Government extending the concessions that have been granted to us.”

Rev Cartwright added that some individuals and families were only just starting the process of home reconstruction due to the cost and difficulty associated with finding “scarce resources” - a problem that will be made worse if the tax breaks are not renewed.

Pointing out that many homes were levelled “to their foundation” by Dorian, she added of the SERZ uncertainty: “It’s giving our people less hope for what the future is holding for them. I stand today with the Abaco Chamber of Commerce in petitioning the Government, and asking that they would truly consider offering and giving the people of Abaco more time by extending the concessions.

“We would ask for one year, but personally I would ask for two years so that we can do what we can to bring Abaco back to what it was, because Dorian has taken Abaco down to the dumps. We are trying. The Abaconians are resilient people, they are strong people and trying and doing their level best to come back. They are coming back, yes, but we don’t want to cut off their legs from under some of them. We don’t want to take away hope from our people.”

Mrs Degregory-Miaoulis, acknowledging the Government’s own fiscal pressures and other constraints, added: “It is in all of our best interests to get Abaco and Grand Bahama contributing back to the Public Treasury again rather than being an added burden.”

Pointing out that, since Dorian, Abaco has also had to cope with COVID-19, the supply chain breakdown, soaring inflation especially on food and energy/fuel costs, and increased construction material prices only partially offset by the SERZ tax breaks, she said: “The only thing Abaco has been asking for is some breathing room to get our house back in order.

“We were told we would have three years. That was reasonable under normal circumstances, but the last three years have been anything but normal. At the very least we require another year of SERZ concessions. We require increased, ongoing and regular consultation with the Government on the best ways to bring our islands and cays back at full economic throttle.

“We require clarity on those things so our people and our businesses and our investors can decide and plan how we’re going to bring Abaco back to being the touristic and economic powerhouse it once was.”

Michael Albury, principal of the Conch Inn and Marina, estimated that the property requires another year before post-Dorian reconstruction can be completed. “Like so many others we had a total wipe-out of our residential and business holdings,” he said. “We are trying to put them back together. We are probably a year away from completion.”