The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Motor Dealers Association’s (BMDA) president yesterday revealed he has been waiting six-eight months for a $200,000 tax refund, while seeing “only red ink” on his company’s financial spreadsheets.

Fred Albury is the latest businessman to complain about the long wait for due refunds from the Public Treasury, citing the negative impact to cash flows as the auto industry generally struggles for growth.

He explained that the outstanding sums related to the refund of Excise Tax and other border levies on vehicles that were subsequently rented out to the Government.

“I’ve got to come up with [tax payments] to keep my doors open, but I have a $200,000 refund from them [the Government] that’s been due, I would say, for between six-eight months,” Mr Albury told Tribune Business.

“They are very current on their lease payments, but this is the import tax I paid at the border on those vehicles, and which I am entitled to a refund on once they are leased.

“There’s a procedure with a lot of paperwork that I have to go through. It’s been approved, it’s at the Treasury and I still can’t get it. It impacts my cash flow.”

Mr Albury, whose Auto Mall business encompasses the Executive Motors (Toyota), Quality Auto (Hyundai) and BMW brands, also highlighted the negative impact that the current Business Licence regime has for many businesses.

As a levy based on gross turnover, the size of annual Business Licence fees often exceeds a company’s profits or, sometimes, taxes a firm into a loss.

Mr Albury’s business falls into the latter category. “If my Business Licence fee was cut in half, I would have shown a small profit for last year,” he told Tribune Business.

“I’m looking at my numbers now, and all I see is red ink. We’ve got some people retiring this year that are not going to get replaced. I’m going to be juggling job descriptions, and will have to make do.”

The introduction of Value-Added Tax (VAT) sparked a 15-20 per cent reduction in top-line sales across the private sector last year, a development that will reduce the Government’s turnover-based Business Licence fee income in 2016.

Pointing to his company as an example, Mr Albury said: “My 2015 Business Licence, based on 2014 turnover, was around $500,000. For 2016, based on 2015, it was just over $300,000. There was a $200,000 drop-off.”

Still, Mr Albury said the BMDA’s new car dealers members felt that consumer interest and demand at last weekend’s Auto Show was “a bit better than last year”, which was impacted by late 2014’s pre-VAT demand surge.

He suggested that many Bahamians realised VAT was “here to stay, and they’ve got to do what they’ve got to do if they need a new car’.

The BMDA president said the high-end segment of the new car market was performing much better than the low and middle categories, as he was unable to “keep BMWs in stock” due to the demand.

“The floor traffic was stronger, the quality of clients was stronger, and generally the follow-up interest from clients was stronger,” Mr Albury said, comparing this year’s Auto Show to the prior year.

He added that his Executive Motors business wrote 110 proposals alone during the show at the Mall at Marathon, but quickly emphasised that “the rule of thumb” is just 10-12 per cent ultimately translate into sales over the following two months.

“The banks are doing their due diligence, but they’re taking a bit longer to dot the ‘i’s’ and cross the ‘t’s’, as they do more than in the past,” Mr Albury said.

“The banks are anxious; they’ve got a lot of money to lend. It’s just a matter of finding people to lend to. It will hopefully be a boost for us by the early part of next month.”

Rick Lowe, Nassau Motor Company’s operations manager/director, told Tribune Business that the Honda and Chevrolet dealer wrote around 80-90 proposals at the Auto Show.

“The banks were trying to help people, and hopefully they can afford the financing,” Mr Lowe told Tribune Business.

“Some of the banks were telling our staff people can’t afford the loans. Lots of people were over-extended, and their relatives and spouses are unemployed. It’s not very good.”