Labour Minister Dion Foulkes.
By MORGAN ADDERLEY
Tribune Staff Reporter
madderley@tribunemedia.net
A DAY after web shop Asure Win said it will close 11 locations and layoff about 50 workers, Labour Minister Dion Foulkes described impending staff cuts from the sector as “unfortunate”, but said there are several factors contributing to the closure of gaming houses aside from a tax increase.
Speaking to reporters outside the Senate yesterday, Mr Foulkes also called for web shop owners to take a moment and examine how the government’s new sliding tax scale will affect them, instead of “anticipating” that it will be detrimental.
On Tuesday, Asure Win blamed the budget’s tax hikes for the closure of 11 of its locations nationwide and the termination of dozens of employees by the end of the month.
When asked if he had any concerns about this announcement, Mr Foulkes said: “I think it’s very unfortunate that the layoffs are occurring.
“Of course as a government, as the minister of labour, we try to enhance employment whenever we can. But I would like to encourage all of the web shop owners to take a pause and see exactly how the tax will affect them, as to anticipating that it will be negative.”
Mr Foulkes added that he understands that there were “several” factors contributing to why the shops are closing.
“The anticipated taxes are only one of the reasons, I don’t know if it was reported,” he said. “I understand that some of those locations were not doing very well before the tax was introduced. And I understand that it was always a plan to close some of them.”
When asked if he felt as though some web shops were using this opportunity to cut “dead weight,” Mr Foulkes said he was unsure, but thinks that in the majority of web shops, all employees are needed.
“I know the two largest employers in the country is Island Luck and Chances. I think both of them employ…between 700 and 800 persons.
“The government is continuing a dialogue with them, so that we can see to what extent we can address their concerns.”
“As minister of labour, I am always concerned whenever one Bahamian (loses) a job.”
Mr Foulkes noted that for those who are terminated, there are opportunities for them to get other jobs.
“Fortunately for us now, the economy is growing, especially in the tourism sector, in the banking sector— the commercial banks, the Bahamian banks, are doing extremely well. And we’re getting reports across the board.
“The construction industry is doing extremely well also. So hopefully, even if those persons are about to lose their jobs, they will be able to find new employment quickly.”
He urged these persons to register with the Department of Labour, adding that “every day” the department gets requests for people to come in for interviews.
Mr Foulkes also said that the Labour Department has not received any notification from web shop owners about terminations.
“No, I don’t have any notification, I just read what was in the papers this morning,” he said.
“I don’t know when they plan to do it, but you have to give us at least one week’s notice for any number under 20 and if it’s over 20 persons, we have to get two weeks’ notice. That is the law. But I have not received any notice from any of the web shop houses.”
The new sliding tax scale is set to take effect on July 1.
Under the new measures, web shops will pay a 20 percent tax on up to $20 million of their revenue, a 25 percent tax on between $20 million and $40 million of their revenue, a 30 percent tax on between $40 million and $60 million of their revenue, a 35 percent tax on between $60 million and $80 million of their revenue, a 40 percent tax on between $80 million and $100 million of their revenue and 50 percent on revenue above $100 million.
During his budget speech last week, Tourism and Aviation Minister Dionisio D’Aguilar said some web shops were on the verge of downsizing even before the planned tax increase was announced.
“There are three of the seven gaming houses that are either too small or have been increasingly losing market share over the past three years that, unless something dramatic occurs, I expect them to begin to close locations,” Mr D’Aguilar said.
“So, when it happens, Mr Speaker, I do not want the people to cry shame on the government. With the advent of technology and the building of bigger and more splendid locations, the smaller players in the market are slowly losing market share.”
Mr D’Aguilar noted that about five years ago, there were 635 number shops, and there are now 363.
“The downward trend is expected to continue,” he said.
Comments
Well_mudda_take_sic 6 years, 6 months ago
This comment was removed by the site staff for violation of the usage agreement.
DDK 6 years, 6 months ago
Web shops are unfortunate!
BahamaRed 6 years, 6 months ago
All the government is trying to do is get back some of that money that they so foolishly allowed the gaming houses to get.
When people were suggesting a national lottery so that they would have all the profit, the government decided to be lazy and leave the playing of numbers/lottery to private businesses.
Now with the implementation of VAT they are able to see just how lucrative gaming really is. Now they want to find a way to get a piece of the pie for themselves. So they taxing the hell out of them. Now trying to capitalize on the already established gaming system.
Bunches of suckers, I say close all the web shops and fire everyone for the government being so stupid as to not have made those gaming houses come under a government agency.
John 6 years, 6 months ago
GOVERNMENT WAS ILL-ADVISED ON WEBSHOPS! Rather than using the two exceptionally performing web shops as a yardstick to overtax, uproot and undo the webshops, the government should have examined the other benefits these operations bring. This includes high employment, rental and construction of prime commercial space, payment of business license and other government fees including utilities. Rather than following the jackass advice to try to overtax ad close these operations down, the government should have encouraged them to open shops in The Cable Beach area and downtown and attract foreign money...new money. And they (government ) came with "dey stiff upper lip", not even willing to meet with the owners and discuss the matter. If these web shops close to the level they say and lay off employees to the level they indicate this will send critical shockwaves through the entire fragile Bahamian economy. And Government, by its own ill-advised action, will find itself in a worse predicament than ever. A financial crisis bigger than ever before. I can guarantee this government would never approach any foreign business in the manner in which they approached the web shops. The operators were not opposed to an increase. They opposed the overkill. And they were singled out! If the government was so hungry for additional revenue, why did they not also increase the tax on casinos? What is good for the goose should also be good for the gender. And a national lottery will never generate the type of economic activity the web shops do. This whole matter was sickening, disgusting, ill-advised, disgraceful and anti-Bahamian! So if wash houses or gas stations or Bahamians start to make good profits, we will also tax them out of existence! Does the red in the FNM flag call for the blood of the Bahamian businessmen? Many of whom are already no more?
BahamaRed 6 years, 6 months ago
If the government took control of the gaming industry from the start this wouldn't be an issue. The gaming industry should never have been allowed to be privately owned, because all the money would also be private.
And I maintain greed is now the factor, because they see the revenue and want some for themselves. So the only way to now get it, is to overtax the gaming sector. They do all the work and the government gets half the profit.
I'd close down my shops too... taking half my profit and they aren't doing anything. Smh...
BMW 6 years, 6 months ago
As they close locations maybe the households in that area will be able to pay bills and send kids to school with lunch. In my view these number houses suck up all the money in communities. Playing numbers affects all aspects of life and work, I know of employees who waste a half hour everyday just to buy numbers, sucking money out of workers and employers, wish they would all be shut down. I hope they are paying proper by the law severance packages as well. I am not a singer like some on this site!
John 6 years, 6 months ago
Maybe they need to open locations in Lyford Cay and Old Fort Bayand Albany But O, but why? When most of these residents can go in the full service, traditional casinos and gamble unfeathered and unbothered and withdraw their winnings without a hitch or glitch
ThisIsOurs 6 years, 6 months ago
I was thinking the other day that we have a troubling track record in this country. People lobby the govt about all the revenue a particular industry will bring in and how much jobs it will produce. Then as soon as these forerunners are given the green light the first thing they do is try to shut the door, I.e. lobby for a moratorium. It happened with gaming, then lo and behold Carnival comes along as the next economy saver, then blam! They want a moratorium too! No one else allowed.
Mark my words if they legalize marijuana the exact same thing will happen, "we need a moratorium to protect our investment", a few people will get rich and no additional money will circulate in the economy.
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