By RASHAD ROLLE
Tribune Staff Reporter
rrolle@tribunemedia.net
AFTER protest from local manufacturers and criticism from the Official Opposition, the Minnis administration has decided to reverse its planned duty reductions on paint and fruit drinks.
The customs duty on paint will be 45 per cent while the duty rate on fruit drinks will be not be eliminated but reduced from 60 per cent to 30 per cent.
Deputy Prime Minister and Minister of Finance K Peter Turnquest said representations were made to him by manufacturers of those products, prompting the reversal.
“Our first priority is to Bahamian manufacturers and we don’t want to take action harmful to their benefit,” he said as bills related to the duty changes were passed in Parliament Tuesday evening.
Nonetheless, Mr Turnquest said as the country pushes ahead to become members of the World Trade Organisation (WTO), a shift away from protectionist policies will be required at some point.
“As we move forward to improve cross border trade we will have to address these protectionist policies and again the whole idea of value added tax (VAT) initially was to introduce that and be able to reduce border taxes so there is free and open trade,” he said. “As a developing country, it is important that we have that.”
Progressive Liberal Party (PLP) parliamentarians had suggested that some of the tax reductions proposed by the new administration harmed Bahamian manufactures but benefited families of members of the governing side.
In particular, they suggested that the proposed reduction on duty for paint benefited the family of St Anne’s MP Brent Symonette.
Mr Symonette, during his contribution to the budget debate Tuesday, disclosed that he has an interest in Bahamian Paint of which he said his children’s trust is a 25 per cent owner.
Mr Symonette also revealed that he had an interest relating to a number of other items affected by the budget, including fruit drinks.
Bahamian juice drink manufacturers had warned that they faced “irreparable harm” if the government eliminated the 60 per cent duty on rival imports. Up to 20 jobs were at stake, they said.
Mervin Knowles, the chief executive of Switcha Bahamas, told Tribune Business that the previously proposed tariff cuts were a “slap in the face” for local manufacturers competing against foreign rivals who enjoyed significant cost and “economies of scale” advantages.
Comments
Maynergy 7 years, 4 months ago
MAYNERGY “WE KNOW THE BAHAMAS”
Keep climbing Bahamas
TalRussell 7 years, 4 months ago
While Comrade Minister Finance "KP" wants protect brightening up the homes with locally produced paints - he should have considered the environmental impact of paint is diverse. The minister's response to the paint manufacturers demand to retain the tax on paint imports - should have been conditional on local paint manufacturers offering environmentally friendly paint alternatives. If we are going go local then why not go environmentally paint friendly?
Rather than chasing after every dollar that went missing or got overspent from the Public's Purse..... Minister "KP" should focus on transforming the Bahamaland - into the Green envy of the Caribbean - within the Red Regime's 5-year mandate.
ThisIsOurs 7 years, 4 months ago
Minister KP is governing by public opinion. This is what, the 100th time he's switched position in 30 days? Not questioning whether his current position is the correct one or not, but what was your reason fir the first position? How much thought did you put into it? Who did you consult? Why was it so easy to change it? All of this red meat has turned people's attention away from a real vision
The best decision Dr Minnis can make in these early days is to appoint a new Minister of ?Finance, it would be a little rough to do, but Finance is critical to our survival, more so than any other ministry.
TalRussell 7 years, 4 months ago
Comrade ThisisOurs, Yes, we've really got's in "KP" - one easily excitable finance minister.
DDK 7 years, 4 months ago
....and if the majority of the public does not wish to buy this brand of paint or that brand of juice drink how does this benefit the MAJORITY of The People? Does Mr. Turnquest weigh ALL pros and cons when buckling at the first whimper. Surely he is aware of the issues raised siting that Bahamian consumers would end up NOT paying less for their products, by caving in to demands from ONE drink manufacturer and ONE paint maker? Further many Bahamians have interests in this or that company, not just sitting politicians. There is such a thing as being too damned politically correct. How does this help John Q Public or Jane Q Public and their right to choose which products they purchase? At which point will a shift away from protectionist tariffs become required? At which point will Customs Duty be reduced as promised when VAT was introduced? Perhaps when the politicians feel they can ram more VAT down our throats?
Well_mudda_take_sic 7 years, 4 months ago
KP has allowed himself to be seriously compromised by the reductions in certain duties relating to aircraft parts & maintenance that benefit his ownership interest in the Sky Bahamas airline as well as the FNM government's very recent decision to rent a warehouse facility owned by Sky Bahamas for use by Bahamas Customs. Even though KP recused himself from the FNM government's decision to rent the warehouse owned by Sky Bahamas, these are nevertheless arrangements in which KP stands to gain considerable financial benefit. Accordingly these arrangements appear to be imbued with the stench of serious conflicts of interest and it is difficult for KP to now not be compromised when making decisions as Minister of Finance about others who would wish to enjoy similar economic privileges. Truth be told, Minnis is sending the wrong message to his cabinet ministers by allowing these types of arrangements and no doubt other cabinet ministers will soon be clamoring and agitating for similar personal perks as was the case with Christie and his cabinet members under the last government.
ThisIsOurs 7 years, 4 months ago
I don't think it has anything to do with being compromised. I believe he just doesn't have the skillset to set policy for that ministry. And no I am not saying he's incompetent.
He presented a budget devoid of any cuts in a time when cost cutting was the most important signal he needed to send, he went further and told us he would "hold the line on 2016 spending" on a budget that the entire country thought was chock full of fat!!! He told us he couldn't streamline staff at BAMSI and UR cause "they had obligations"...obligations?? 7 billion in debt anyone? He changed position on breadbasket items, he told us he was going to use VAT to pay down the debt, he said he had to "figure out" how to revive the Freeport economy. In each case after reaction by the public and various experts, he almost immediately switched position to the public sentiment.
This is very bad. Even if he switched to the right position. It means he has no understanding of the complex environment he is in, he is unable to analyze cause and effect and unable to set long term strategy. And not understanding that environment is not a bad thing, there are probably only 10 people in the country who really do. But somehow I think Dr Sands could do a better job there, his approach to developing a strategy would be different, he wouldn't be afraid to say he didn't know, he'd get the right people in, he'd know cost cutting was supreme and you would have seen that day one.
The most dangerous implication is he could depend on the "wrong" people, why would he consult the financial secretary who oversaw the last five years for example?
My fear is Dr Minnis won't move him and the country will suffer the consequences. No I don't think he should put Dr Sands there, he's where he should be. Dr Minnis needs advice on the right person for the post, consult HAI, Sir William Allen etc etc. Please. This is about the country.
Well_mudda_take_sic 7 years, 4 months ago
The last thing we need is for the Freemasons to gain control of our country's finances. They mean well but cannot resist scratching each other's back to the exclusion of all other Bahamians. As for getting advice from from the very aged Sir William, it's best to accept that he's a dinosaur from an entirely different era. HAI cannot be trusted to give good advice on anything - both he and Christie have taken their turns in contributing greatly to the financial mess our country is in today. James Smith is of course nothing but a daft buffoon who no doubt has curled up real close to his Greek paymaster after the PLP's severe thrashing at the polls. Julian Francis will always be a light weight as would be anyone else who has ever worked at the Central Bank of The Bahamas. We certainly do have good cause to despair because, quite embarrassingly, there are so few highly distinguished Bahamian bankers or businessmen with the reputation and stature who would be willing to serve as Minister of Finance. It is becoming increasingly apparent though that KP Turnquest is not up to the task.
ThisIsOurs 7 years, 4 months ago
Good points, who are the Freemasons btw :-|? (Not literally) and what are they up to?
I've bucked my toe a couple times, and after I buck my toe I might even repeat the same mistake to buck my toe again, but I believe I can look at the situation and tell someone else if you don't want to buck your toe, here's what you could do. I like HAI warts and all, what I'm looking for is a selection committee for the minister of finance, something similar to how the Fed chairman is selected in the US. I think (who am I anyway?) HAI could have great input on assessing candidates.
DDK 7 years, 4 months ago
Wise observations, ThisIsOurs.
DDK 7 years, 4 months ago
Right, Mudda, this is exactly what we want to get away from. Seems like many 'well-off' politicians on both sides of the fence have fingers in many pies. It almost looks unavoidable. This Government needs to tread very carefully if it wishes to maintain the respect of The People.
proudloudandfnm 7 years, 4 months ago
Well the FNM just confirmed duty will never be eliminated in this country..
Really really bad move...
DDK 7 years, 4 months ago
Mr. Turnquest best get it together and keep it together!
The_Oracle 7 years, 4 months ago
Political timidity is no way to fix this country, Protectionism never works. It just punishes the population. The people, remember?
BaronInvest 7 years, 4 months ago
Can a Bahamian please explain a dumb foreigner like me why you keep crippling your economy with these import duties ? I was on the verge to open a German supermarket in Nassau with a multi-million investment when I saw that milk is 5$ instead of 50 cents and that most of the food is basically 400% more expensive than in the US/Europe.
That project basically got scrapped when we understood "import duties" in the Bahamas. Not to mention all the bribes involved in order to get your goods handled on time and with the proper care.
OMG 7 years, 4 months ago
Unfortunately that has been the single most important tax revenue method as there is no income tax. Two points .1. Where do you get milk for 50 c gallon in the states because I have never seen it. 2. speaking as a family island resident the seems to be no price control and any duty reductions seem have little effect on the retail price.
Well_mudda_take_sic 7 years, 4 months ago
Re-post: Many of these juices / drinks that are locally produced are well known to be most unhealthy and some are even addictive. For this reason they should be subject to some kind of significant sin tax for the serious health hazards they present to their consumers which could help defray the burdensome costs they eventually create for our healthcare system. The same can be said about all of the fast food franchises that are virtually killing thousands of Bahamians, especially young children. Minnis as a medical professional should know all about the health risks imposed by many juices / drinks and fast food. Unfortunately, KP Turnquest has allowed himself, as Minister of Finance, to be so severely compromised by the FNM government's special dealings with Sky Bahamas, an airline in which he has a significant ownership interest, that special interest groups like the so called "juice manufacturers" seem to have the upper hand in determining government policy. That's sadly just not right!
DDK 7 years, 4 months ago
Right again, Mudda!
Alex_Charles 7 years, 4 months ago
Very protectionist measure. Doesn't matter. the one's who get shafted with paint... is us. Time shall tell the full impact
MassExodus 7 years, 4 months ago
By protecting local manufacturing businesses like paint and fruit juice, you decentivise them to compete on a global level. I would eliminate duty. If they are serious business men/women they will adapt and find a way to compete with sunny delight etc. All those foreign imports still have additional costs such as freight etc. Stop bailing out the lazy Bahamian mentality, and force business to compete globally!!!!
Jetflt 7 years, 4 months ago
Amen!!!
kkphilli4 7 years, 4 months ago
I am always weary when the voice of a few wealthy Bahamians try to stifle the freedom of ordinary struggling Bahamians make their own choices. Because a few well to do Bahamians scream, you punish the majority of people that placed you in office? Do not get too comfortable, if not people will be marching again soon but this time it will be the people that voted for the current administration voicing their dismay. Remember, it was the masses that put you there, not the few.
While at it, an estimated date for the reduction of VAT on bread basket items need to be released. If you cannot reduce the VAT now, then show respect to the masses that stood in the hot sun and voted you in and tell them whether it will be December 2017 or May 2018 or September 2018 etc. They deserve to hear an exact date as to when the VAT deductions will take effect. Stick to your promises and it will be an easy reelection. Disrespect the masses who placed you there and you will suffer the next big defeat.
DDK 7 years, 4 months ago
As many bread-basket items have already been reduced to 5% or are now duty-free it seems the continued removal of duty from more food items, grocery items, drug items and hardware store items would be the way to go. The cost of all goods coming in from the U.S. has gone up tremendously. Any relief at the food store, drug store or hardware store that can lessen the burden of buying common necessities would be appreciated by The People. Far less complicated than mucking about with VAT. The implementation of measures to prevent price gouging should also be tabled.
Porcupine 7 years, 4 months ago
Here, just like everywhere it seems, the rich own the country, make the laws, and send their money offshore because they see how bad it is getting 'round here". This government doesn't appear to have either the brains or the fortitude to government for the people. It was a slogan. Things will continue as they have been, with merely a new group of thugs at the helm.
proudloudandfnm 7 years, 4 months ago
Tell you one thing right now...
I will never live in a Bahamas that has income tax. That day I will leave. No way in hell...
ashley14 7 years, 4 months ago
Your already paying income tax. It has other titles. It's not collected in the way that the US does it, but your paying maybe a higher percentage than we pay. I don't have a problem with a fair income tax system. We have a lot of amenities that our government provides for us. It pays our police, it maintains our roads, social security supports us as we age or become disabled. If you become unemployed you may get unemployment and food stamps. There are tons of things that the government does for us. Somebody has to pay for these things.
sheeprunner12 7 years, 4 months ago
Will customs duty rates persuade Bahamians to "Buy Bahamian"?????? ........... I think not
Even if the duty rate was 300%, Bahamians would not buy "inferior quality" local items ....... That is the main cultural issue that impedes our local manufacturing industry ...... Will Bahamians buy canned shads over canned tuna?????? .......... or Sunburst over Benjamin Moore??????? ....... or Androsia over Aeropostle??????? ............. or Sammy's over KFC??????? .............. The only solution is the 1970s & 1980s Jamaican solution ........... COLD TURKEY IMPORT RESTRICTIONS AND IMPORT SUBSTITUTION SUBSIDIES FOR MANUFACTURERS ............ And this hard decision has paid off big time in local production
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