The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Grand Bahama needs 20,000-30,00 extra residents immediately to sustain its economy, its Chamber president urging the Bahamas to “selectively open the Immigration gates”.

Kevin Seymour, the Grand Bahama Chamber of Commerce president, said: “The truth is that if we are going to have a successful economy here in Grand Bahama, we need about 20,000-30,000 more people immediately.

“We can’t keep playing games on this. We can be very selective on our Immigration policies, but we have to open up the gates.”

Mr Seymour told the Grand Bahama Business Outlook conference last week that there appears to be a diminished emphasis on the promotion of the Port area by the Grand Bahama Port Authority (GBPA).

He added that there was a lack of co-ordination and collaboration by the GBPA, its licensees and the Government. Freeport businesses were being challenged by increasing costs, and finding it harder - rather than easier - to do business.

As the Government prepares to make a final decision on the Hawksbill Creek Agreement, and the extension of real property tax, income and capital gains tax exemptions, Mr Seymour said such incentives were most effective when all players are aligned over costs.

“Based on a study by the International Monetary Fund (IMF), it has been proven that tax incentives generally encourage domestic inward investment, they attract foreign direct investment and drive infrastructural development when used in tandem with public-private partnerships (PPPs),” Mr Seymour said.

“Some of the concerns, however, are that the Government is foregoing revenues that they could have otherwise collected by a assessing a tax. Tax incentives alone have not proven to be as effective as people may think.”

Mr Seymour added: “The Government gives you a tax break in terms of trying to encourage investment, but if other players in the community are not aligned cost-wise with those incentives, then any savings you are likely to enjoy can quickly be eroded away.

“Case in point, here in Grand Bahama, we have these tax incentives. However, it does not appear that the Power Company, for example, is in line with what we are trying to do here, stimulate investment, grow businesses etc.

“Unless and until you have a situation where you have all of your players aligned, you are going to have a situation where tax incentives are not going to be very important. “

Mr Seymour said Freeport businesses have often complained that the Government has not always remained faithful to the tax exemptions that GBPA licensees should benefit from under the Hawksbill Creek Agreement.

“What we at the Chamber get complaints about most often is that, notwithstanding the representations made during the roll-out with VAT, there are still a number of companies here in Freeport designated as exporters who have yet to receive their refunds from the VAT Department. Those kinds of things totally undermine the confidence of investors doing business here,” said Mr Seymour.