The Tribune

By LYNAIRE MUNNINGS

Tribune Staff Reporter

lmunnings@tribunemedia.net

SMALL business owners said the imposition of VAT on foreign-owned yacht charter fees had contributed tremendously to the industry’s decline in the past year.

The Department of Inland Revenue introduced a VAT rate of ten per cent last year that required foreign-flagged charter yachts to pay this rate on the value of their charter contracts.

The charter yacht industry is often seen as an elite luxury sector lucrative for yacht owners and marina operators. However, some small businesses benefit from vessels that use The Bahamas as a base for charter operations.

Dion Munnings, the owner of Paradise Provisions, said although his business has had a steady flow of customers, he has seen a noticeable decrease during the usual peak season.

“If you compare this year with last year and especially right after the pandemic, you’ll see a serious drop,” he said. “You look at the marinas, they used to be full around this kind of time.

“It’s July now, people coming out of school, this is a busy summer charter season, and I have had yachts telling me that people declined when they see that that charge come off for VAT.

“When they’re presented with that, it’s like they decline the whole charter because some people just won’t pay it and it is high. It’s really a downfall.”

He suggested that reducing the tax would relieve small businesses benefiting from the yachting industry.

“If you spend $150,000 a week or $200,000 a week to rent a boat or charter boat and you’re going to pay $20,000 on top of that because of 10 per cent VAT, that’s just money you’re giving away,” he said.

Another business owner who requested anonymity because he dislikes publicity shared similar sentiments, saying business is now slower than during the ‘‘slow season”.

The man, an owner of a cleaning company, said he has had one client per month recently.

Meanwhile, Nevron Harris, owner of Slim Upholstery, acknowledged the decline but said his business was not significantly affected because his company caters to various sectors.

He said he still intends to turn “lime into lemonade”.