The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE “damage has already been done” to the yacht charter business for 2015, with uncertainty surrounding Value-Added tax (VAT) prompted some clients to go elsewhere, the Marina Operators of the Bahamas (MOB) chief said yesterday.

MOB president Peter Maury said VAT would be a “tough pill to swallow” with boaters having other options in the Caribbean.

He added that despite the recent announcement of a lower 7.5 per cent VAT rate to be implemented on January 1, 2015, the marina industry was still unclear on how it would ultimately be affected.

“The yacht industry is definitely a growing industry in the Bahamas because of the cost of going to the Caribbean, so rather than make those long trips to the Caribbean they choose to come to the Bahamas, but if we are going to raise the fees here it just drives them right back to the Caribbean,” Mr Maury said.

“People think the owners can afford it, but these yachts are on budgets and run like a normal business. They are going to weigh the good and bad. VAT is going to be a tough pill to swallow when the rest of the Caribbean is not necessarily charging it.

“We don’t know if it’s on the dockage, fuel, you don’t really know anything and that is very confusing. They announced the 7.5 per cent rate but we don’t know much more than that in terms of the facts and the figures.”

Mr Maury said the Bahamas has already lost business for 2015 due to uncertainty surrounding VAT. “The damage has been done. The 2015 charters have been booked and some of them have not been booked in the Bahamas because they didn’t know if it was going to be at a 15 per cent rate or what. I honestly think that the Bahamas lost potential clients for 2015. It’s difficult at this point to say exactly how many,” he said.

Mr Maury added that the Bahamas was becoming a more attractive destination for boaters, but risked losing its appeal over increased costs. “It’s a very transient business. Just look at what happened in the Mediterranean. Instead of going to Greece and Italy, a lot of boaters decided for instance to go to Croatia, where they didn’t have to pay those fees. That’s the nature of the business, they can redirect anytime they want,” he explained

Mr Maury questioned whether VAT would be levied on consumables, noting that there was a significant trickle down economic effect from the charter industry.

“The yacht business touches so many different areas. They are not coming to stay at a resort where they’re on a meal plan; they go to different Family Islands, stopping and purchasing provisions along the way. If we make it more expensive and difficult for them to come we are going to lose that market as well,” Mr Maury said.