The Tribune

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

MANAGEMENT and Engineering Consultant Dillion Knowles, a director of the Grand Bahama Chamber of Commerce, says that the organisation believes the 2015 tax exemptions in the Hawksbill Creek Agreement should be extended to 2054.

This will allow Freeport to retain its “competitive edge” in the region for foreign direct investments, resulting in increase development potential and more government revenue.  

Mr Knowles made his remarks at the Chamber luncheon this week at Pelican Bay Resort, where he gave a presentation on the topic, “Does the Hawksbill Creek Agreement matter?”

The HCA was signed in 1955 between the Grand Bahama Port Authority (GBPA) and the government. Under the agreement the GBPA was committed to various obligations in exchange for certain benefits, which included tax exemptions among other things.

The exemption of real property tax and business licence fees will expire in August. The government has appointed a six-member committee to review and make recommendations on those expiring taxes and the HCA. The Chamber president, Kevin Seymour, is on that committee.

Mr Knowles said the Chamber hopes to use this opportunity to voice the issues, concerns and/or recommendations with a view to “jump-starting” Grand Bahama’s economy in the shortest possible time, while creating a framework for long term sustainable economic growth and development for the entire island.

He stated that the HCA created a Free Trade Zone in the port area of Freeport/Lucaya. This, he  noted, has resulted in significant infrastructural development of Freeport, and major industrial, resort and residential investments in Grand Bahama.  

Mr Knowles says the Chamber is recommending conditionally extending the 2015 tax exemptions until 2054. He believes that failure to extend will result in a reduction in government revenue and limit sustaining of the economy.

“Additional taxes will result in loss of local and foreign businesses and will place already struggling property owners underwater,” he said. “An extension will maintain a competitive edge over regional competition for foreign direct investment resulting in increased development potential and more government revenue.”

Mr Knowles said that the Chamber believes that government should negotiate devolution of control and transfer of the GBPA to an independent stakeholder trust or similar vehicle.

“Such negotiations must be, and be seen to be, done at arm’s length and without compulsion. This action is critical in order for the GBPA to be independent ‘in appearance’ as well as independent ‘in fact’.”

He also indicated that the creation of a GBPA Board should be formed from licencees and other stakeholders (including government). According to Mr Knowles, the Chamber also believes that providing for transparent administration of the HCA and regulation of municipal services is needed.

The elimination of the conflict of roles by GBPA, Port Group Ltd management and government, and the transferring the regulatory powers in the event of another shareholder dispute also needs to be addressed.

Mr Knowles said Grand Bahama should be viewed as a fiscal solution for the country, adding that growth on the island from the HCA redefinition would significantly assist government with its fiscal reform agenda. The Chamber, he said, also feels that government should roll back Value Added Tax on licensee to licensee services.