The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An auto dealer yesterday backed the Government’s safeguards for Hurricane Matthew automobile replacements, suggesting it would reduce the fraud and exploitation seen under previous ‘exigency Orders’.

Rick Lowe, Nassau Motor Company’s (NMC) director/operations manager, told Tribune Business that the absence of such controls previously had enabled persons to “replace an old piece of junk with a brand new vehicle”.

The new Matthew ‘exigency Order’, which will initially take effect for 180 days (six months) from October 7, 2016, says Customs Duty and Value-Added Tax (VAT) exemptions on autos imported to replace vehicles claimed by Hurricane Matthew will be based on ‘the market value of the vehicle destroyed on the date of the hurricane’.

“In the event the minimum value is less than $5,000 on the date of the hurricane, a value of $5,000 would be used. The destroyed vehicle must be turned over to the authority of the Customs Department in all instances,” the Government said.

Mr Lowe said these protocols were “the proper thing to do”, explaining that they would act as a safeguard against persons seeking to exploit Matthew’s devastation for personal gain and enrich themselves.

“Before, what was happening was that people who had an old piece of junk, they were getting brand new vehicles,” Mr Lowe told Tribune Business of previous hurricane exigency Orders.

“They’re now doing what they didn’t do last time. People were getting new car replacements and they ran into problems issuing duty refunds to people. They eventually caught it and corrected it.”

Mr Lowe said the auto industry’s valuation standards were that vehicles depreciated in value by 15-20 per cent per annum from the date of purchase.

This formula, he added, would be applied to autos written-off by Hurricane Matthew, using their date of manufacture or sale as the starting point, and assuming the vehicle was not previously “in bad condition and mashed up”.

Mr Lowe, though, suggested that the 180-day tax exemption period set by the Government for the islands of New Providence, Grand Bahama, Andros and the Berry Islands was “not enough”, given that there was “so much damage” to deal with.

Given that the National Emergency Management Agency (NEMA) must also verify all claims for hurricane relief-related exemptions, Mr Lowe also questioned whether it had sufficient manpower and resources for the task.

He warned that Bahamians were likely to become “frustrated by the bureaucracy” involved, and the time required to process claims.

“I think that it’s nothing more than a goodwill gesture,” he told Tribune Business of the ‘exigency Order’. “People are going to be frustrated by the bureaucracy.

“I don’t think they’re going to be able to cope with all the claims coming in, as you have to have prior approval from NEMA. To put all the ducks in a row, and make sure it’s a legitimate claim, is going to take plenty of effort.

“If the Government is serious about accountability, they’ve got to closely check and they’ve got to have the manpower. It could be overwhelming for NEMA, as claims will be coming out of the woodwork. I can’t see six months being enough.”

Mr Lowe also expressed concern about the impact Hurricane Matthew will have on the Bahamas’ already hard-pressed fiscal position.

“We’re already in a precarious financial position, the country is,” he said. “How close to the precipice is this going to push us?”

The exigency Order says: “Customs Duty and VAT exemptions will be granted to registered charitable organisations, and individuals whose loss by Hurricane Matthew has been verified by NEMA

“All other authorised donations will be deemed a gift to the Government and will be received and distributed by NEMA.”

Prime Minister Perry Christie has the ability to extend the exigency Order beyond its April 4 deadline.