A foreign dive operator’s offer to pay double the legal charter fee has been rejected by his top Bahamian counterparts, who argue that this sum pales against the “30 per cent or more of revenue” that they pay in taxes.
Captain W. Scott Smith, of the US-registered Dolphin Dream vessel, in a March 21, 2015, letter to the Ministry of Tourism pledged to “voluntarily” pay an 8 per cent charter tax to show he was serious about paying his ‘fair share’ in taxes to the Bahamas.
He expressed hope that this would “smooth things over” with the Bahamas Diving Association (BDA), which had previously demanded that the Government stop issuing charter permits to any rival foreign vessel.
However, the response by BDA president Neal Watson, seen by Tribune Business, suggests that Captain Smith has failed in this objective.
Reiterating the BDA’s call for Captain Smith and the Dolphin Dream to switch countries and establish operations in the Bahamas, Mr Watson said the taxes and fees paid by local dive operators equated to over 30 per cent of their revenues - “nowhere close to the 8 per cent you offered”.
The row between Captain Smith and Bahamian dive operators erupted after he copied to this newspaper a letter in which he blamed his decision not to renew his BDA membership on “inflammatory and insulting” statements by its leadership regarding foreign charter vessel operators.
Captain Smith said he and the Dolphin Dream paid all due taxes, more than $50,000 per year, to the Bahamian government, suggesting that all foreign dive vessels should not be tarred with the same brush.
Striking a much more conciliatory tone in his latest missive, Captain Smith said: “I understand the Bahamas Diving Association’s concerns, and I do believe they have valid points........
“I don’t have a problem with paying higher taxes. This is part of life. Taxes go up and governments need their money. I feel sorry for Bahamians that they have to pay the 7.5 VAT tax; this is a heavy hit for all.
“The problem, I think, is legislation takes time and new foreign charter vessel taxes and fee legislation will take time to enact. I know it’s coming and I know it would be more fair if I pay more taxes.”
Captain Smith then added: “I don’t want to be controversial or have problems; I just want to continue to do the same thing I have been doing since 1986.
“I have an offer, in hopes of smoothing things over with the BDA, and showing the Bahamas Government I’m serious about paying them revenue. I am willing to voluntarily double my current tax rate of 4 per cent and start paying 8 per cent charter tax, and after the Bahamas laws change I will pay whatever they tell me to pay.”
Captain Smith’s attempt at an ‘olive branch’ appears not to have been accepted by the BDA or its members.
In reply, Mr Watson wrote that Captain Smith and the Dolphin Dream had been BDA ‘non-voting members’, as the organisation’s Articles of Association limit voting members to Bahamas-based and licensed operators.
The BDA’s officers and directors last year “unanimously voted” to stop foreign operators from acquiring non-voting membership, and Mr Watson told Captain Smith: “I don’t think you quite grasp the issue.
“You are a citizen of another country, operating a business based in another country, with a vessel registered in another country that has a crew from another country, and feel you are entitled to operate your foreign-based business in the sovereign country of the Bahamas in direct competition with Bahamian businesses, without complying with the same laws and regulations that is required of a Bahamian citizen.”
Captain Smith would likely dispute that last assertion, but Mr Watson said research by an attorney hired by the BDA suggested the 1991 Foreign Charter Boat legislation did not allow foreigners - even with a charter boat permit - to compete with Bahamians in the provision of full service dive and snorkel businesses.
Questioning whether the Dolphin Dream’s crew had the necessary work permits to operate in the Bahamas, Mr Watson concluded: “As stated before, the Bahamas Diving Association would welcome your membership application should you decide to move your dive business to the Bahamas, establish a paying Bahamian-based business, register your boats in the Bahamas, pay duty on all your equipment, hire Bahamian boat captains and crew, properly license and pay all of the taxes and fees required by a Bahamian business.
“By the way, these expenses typically are in excess of 30 per cent or more of a company’s revenue in the Bahamas, nowhere close to 8 per cent you offered. “
Comments
proudloudandfnm 9 years, 8 months ago
I really don't suggest opening this can of worms. Tourism is still too important to this country. You cannot ban foreign vessels from offering watersport activities on board. If you do you really will hurt our tourism product.... Bahamian operators need to outsell the competition. Run some ads, offer something the others can't. Figure it out man.....
EnoughIsEnough 9 years, 8 months ago
i disagree with proudloud completely. in this instance, the BDA is absolutely correct and Dolphin Dream should not be permitted to operate in the Bahamas. do you really think that if an expert company such as Stuart Cove's decided they wanted to run their trips in US waters that the US government or any south florida tour operator would allow that? never. they would have to establish themselves in the US, hire US crew, pay full US taxes, etc...
proudloudandfnm 9 years, 8 months ago
Of course. Every country allows foreign vessels to offer watersports....
It is what it is man....
proudloudandfnm 9 years, 8 months ago
It is the industry norm. How can you tell a cruise ship or yacht they cannot offer their guests water sport activities?
Might as well put up a closed sign.....
proudloudandfnm 9 years, 8 months ago
I'm telling you. This is a can of worms we cannot deal with. We need tourism. This is not an easy fix at all....
jackflash 9 years, 8 months ago
proudloudandfnm
You are wrong.
To operate in US waters you have to abide by the Jones Act which states that
1) the vessel must be US made or US import taxes paid on the vessel 2) the crew and captain must be US citizens or residents. 3) the company must be domiciled in the US.
This is a fact on maritime law.
proudloudandfnm 9 years, 8 months ago
No sir. So sorry. Yachts can go into the USA and offer watersports. They have to get cruise permits just like we do. Foreign cruise vessels can visit the USA and offer water sports. What you cited was for vessels wishing to stay and work in US waters. Any pleasure vessel can visit the USA and offer water sports....
asiseeit 9 years, 8 months ago
So this dolphin dream dive boat is not working in our waters?
proudloudandfnm 9 years, 8 months ago
It is visiting....
proudloudandfnm 9 years, 8 months ago
They clear in and they clear out. Status is "visiting foreign vessel".... They are given a cruise permit and fishing permit on entry....
asiseeit 9 years, 8 months ago
So nobody is working on the vessel, everyone is on vacation? Must be nice. Reminds me of the sports fish boats in the family islands that have a different set of "guests" every week, those guys sure have allot of "friends".
proudloudandfnm 9 years, 8 months ago
Of course the crew is working. Every ship/yacht has crew and they all work in our waters. From bartenders on cruise ships to yachties... They are working in our waters. And they work in US waters when they go and Trinidad waters when they go there....
It is what is man....
Very difficult to stop this.....
jackflash 9 years, 8 months ago
Proud,
Wrong, they clear in as a charter vessel and pay a 4% charter fee. They are working plane and simple.
They are in fact a commercial charter vessel.
Yes, cruising yachts can clear into the US and play with all their toys, they can not offer water sports for sale or hire. They can offer the pretty blond on the beach a ride on their wave runner but they can not charge for the services. If they are a commercial charter yacht then they also pay a bond and a charter fee to the US and yes they can offer the use of their toys to their guests.
Foreign Yachts charter for seasons at a time in different locations and pay the fees in each location. Now it is the Med in a few moths it will be the Bahamas, Caribbean and eastern seaboard.
Big difference,
BiminiHomeowner 9 years, 8 months ago
This is not a yacht, and this is not a cruise ship. This is an American SCUBA operator exploiting Bahamian waters and resources for his SCUBA excursions. The divers on these boats come to dive in The Bahamas (mostly for shark diving), and would use Bahamian operators if these US boats were blocked. Bahamian tourism would get a boost, not a loss.
proudloudandfnm 9 years, 8 months ago
Ok they clear in as a charter. They can still offer watersports...
Just like in every other country....
proudloudandfnm 9 years, 8 months ago
Pretty sure they secure a cruise permit as yachts do too. I am a ship agent and have cleared in well over 4000 ships and yachts. Never heard of a 4% charter fee. Everyone I've cleared with a cruise permit. But it could be I guess...
proudloudandfnm 9 years, 8 months ago
Wait. 4% of what?
proudloudandfnm 9 years, 8 months ago
You making stuff up?
captjohnr3 7 years, 10 months ago
'Stop Shark Feeding Tours' Published on July 19, 2016
A Bill that would ban SCUBA divers from feeding sharks in U.S. waters introduced in Congress
Some SCUBA diving operators use bait or chum to attract sharks so that their customers can get an up close and personal encounter. A new bill that would make this practice illegal in all U.S. waters has just been introduced into Congress. Section 3 of S. 3099, the “Access for Sportfishing Act of 2016”
https://www.linkedin.com/pulse/stop-sha…
Stop Shark Feeding Tours
Please contact your US Representatives bit.ly/2ixq2vf and US Senator bit.ly/2ioSEs5 and ask them to vote YES on S.3099 http://bit.ly/2jvKta2 By U.S. Senator Bill Nelson bit.ly/2isEv86
Shark Detective John Russell http://bit.ly/sharkdetective
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