The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government should “completely renegotiate the Hawksbill Creek Agreement and be done with it”, the Opposition ‘s finance spokesman has charged.

K P Turnquest, the FNM MP for east Grand Bahama, told Tribune Business in a recent interview that this would at least provide Freeport’s private sector with more certainty than it enjoys in an environment characterised by constant Government meddling.

Suggesting that it was impossible for businesses to operate in a climate where the rules could change on a daily basis, Mr Turnquest questioned why successive administrations in Nassau had deemed it necessary to interfere and stop Freeport “turning the corner”.

The MP, a former Grand Bahama Chamber of Commerce president, said the Government’s latest gambit – levying Value-Added Tax (VAT) on ‘business-to-business’ services transactions between Port licensees – had effectively rendered him speechless.

“Again, I don’t know what to say,” he told Tribune Business. “They [the Government] are unsure about what they are doing themselves.

“It’s [VAT on services] certainly inconsistent with the application of the Hawksbill Creek Agreement. No matter how you look at it, this is a tax, and Freeport is not subject to any taxation other than Port taxes. It will be interesting to see how it stands up. My feeling is that it won’t”

Mr Turnquest conceded that he was no attorney, but his take on the Government’s ‘VAT on Freeport services’ proposal has been backed by both the Grand Bahama Port Authority (GBPA) and Grand Bahama Chamber of Commerce.

The Chamber and the GBPA appear locked on collision course with the Government over the issue, after the latter said it had received legal advice indicating it would not breach the Hawksbill Creek Agreement by levying 7.5 per cent VAT on services in Freeport.

“None of this bodes well for business in Freeport, or anywhere in the country for that matter,” Mr Turnquest told Tribune Business. “There is a certain way we do business in Grand Bahama, and this would represent a fundamental change.”

The Opposition’s finance spokesman argued that instead of constant tinkering with Freeport’s taxation structure, the Government should simply get out of the way and let the city get on with business.

“The economy of Grand Bahama has been suffering for a number of years, and has yet to turn the corner,” Mr Turnquest told this newspaper. “This [VAT on services] can only be bad news for the residents and businesses in Grand Bahama.

He then added: “The question has to be asked: Why does the Government want to continue to interfere with businesses in Grand Bahama, and the operation of the Hawksbill Creek Agreement?

“Why don’t they allow Grand Bahama to thrive and have a chance to come back on to its feet? Why do they continue to impose these new taxes and fees on businesses?

“It’s incredible. Why should goods be treated differently from services?”

Given this background, Mr Turnquest suggested that the persistent uncertainty – which has only been exacerbated by the issue of Freeport’s 2015 expiring investment incentives – needed to be finally resolved, one way or another.

“At this stage, in my opinion, they [the Government] might as well go with a total renegotiation of the Hawksbill Creek Agreement,” he told Tribune Business.

“They screwing around with it, so they might as well go to a whole renegotiation and be done with it. At least we’ll know who to look at and hold accountable. How can you operate in an environment that changes every day?”

Tribune Business and Carey Leonard, the Callenders & Co attorney, last week secured some progress for Grand Bahama after Prime Minister Perry Christie pledged to fix the “glitch” that had prevented the complete roll-back of the new taxes imposed on Freeport by the 2013-2014 Budget.

Mr Christie was moved to act after Mr Leonard revealed, via this newspaper, that the Government had failed to deliver on the promised removal of all these taxes/fees.

The only one that had been removed by the Government was the 1 per cent Customs administrative processing fee on imports. This fee, up to a maximum $500, remained on all Customs’ export-related forms, while the promised repeal of the Environmental Levy had also failed to materialize.

Mr Christie blamed this on miscommunication between the Ministry of Finance and Customs, and said he had directed that the matter be corrected on Friday.