The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top QC yesterday said the Government would be unable to levy its “illegal taxes” in Freeport until 2054 if Port Authority licensees succeed with their Supreme Court action.

Fred Smith, the Callenders & Co attorney and partner, told Tribune Business that Freeport’s business climate would enjoy much greater certainty if the summons, filed yesterday by 14 firms, resulted in the 2013-2014 Budget’s new and increased taxes being ruled illegal under the Hawksbill Creek Agreement.

Suggesting that court success could unleash greater business expansion and investment in Freeport, Mr Smith effectively said the Grand Bahama Port Authority’s (GBPA) licensees did not trust Prime Minister Perry Christie’s assurances that his government will ‘roll back’ the tax increases imposed on Freeport last July.

The Port Authority itself suggested yesterday that it had received formal confirmation that the Government would act on its promises, but Mr Smith questioned whether, if a roll back did occur, it would last.

“The licensees simply do not know whether this proposed dispensation by the Government will last until 2054,” Mr Smith told Tribune Business.

“If our action is successful, it will mean there is certainty for business in Freeport for the future, and confirmation

that these illegal taxes are not payable until 2054; that they cannot be switched on and off by whatever government may be in power in the future.”

The well-known QC added: “This action is defending our freedoms from these taxes until 2054. This is not a joke.

“Licensees, the Government and the Port Authority are the stakeholders, and should all be involved in consultations on Freeport issues, not just the Port Authority or the Government. Freeport licensees matter, and there are consequences to what the Port does.”

The 14 licensees, on behalf of their fellow 3,500 Freeport-based businesses, are seeking Supreme Court declarations that three new taxes - the 1 per cent Customs processing fee, the Environmental Levy and the Stamp Duty on remitted dividends and financial payments - breach the Hawksbill Creek Agreement and are this illegal.

Mr Smith, meanwhile, emphasised that the Prime Minister and his government could not simply ‘snap their fingers’ and repeal the 2013-2014 Budget taxes. Given that they had been passed by Parliament into law, it was up to the Government to now draft legislation to repeal them, and for both houses to pass it.

“Rolling back the taxes is not a Prime Ministerial decision,” Mr Smith pointed out. “It is Parliament that must pass the law to undo what they did. It’s not up to the Government to agree to roll back taxes; it’s up to Parliament.

“And if a law is properly passed, which confirms that Freeport is not subject to these taxes, the licensees will want their illegally extracted taxes refunded.

“The licensees will be wanting interest on their unlawfully extracted taxes, and repayment of all Stamp Duty paid, not just the duty.”

The Callenders & Co partner said the tax ‘roll back’ should apply to all Port Authority licensees, not just the major employers in the industrial economy, or the companies involved in the Freeport Container Port expansion.

Mr Smith added: “This is not a favour that the Prime Minister is doing for us. The licensees have a right not be to illegally taxed in breach of the Hawksbill Creek Agreement.

“The licensees are in the dark. It’s great to read in the newspapers this is going to happen, but it should happen to everybody, not just the big industrial concerns.”

He said Freeport’s private sector had also been ignored in discussions on the tax ‘roll back, and added: “This shows how little respect the Port Authority and central government have for the thousands of licensees that are the bedrock of Freeport.

“It’s not the Government, it’s not the Port Authority, it’s the licensees that make Freeport hum.”