The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A former attorney general says a “live legal question” exists over the $50m raised by the various tourism industry promotion boards to market The Bahamas annually to potential visitors.

Alfred Sears QC, addressing the National Progressive Institute, the Progressive Liberal Party’s (PLP) think-tank, argued that there was “no statutory authority” to support the raising of these funds via room levies imposed on guests.

The only “permission” granted, he said, was a 1970 letter from then-minister of tourism, Sir Clement Maynard, adding that it was debatable whether the funds were raised through a levy or an actual tax.

Lamenting the lack of oversight and parliamentary accountability for how this money is spent, Mr Sears said the Promotion Boards’ collective $50m annual income was equal to the Ministry of Tourism’s total yearly budget.

“The retained amount taken by Promotion Boards is spent in the boards’ exclusive discretion for ‘promotion and training programmes’,” he said. “These boards are controlled primarily by the major hotels, all of which are foreign owned and controlled; the Ministry of Tourism has neither a seat on the Boards of directors nor a vote in the running of the Promotion Boards.

“Today, the portion of the resort levy that is annually retained by the Promotion Boards amounts to approximately $50m. The Ministry of Tourism itself has allocated about $20m to promotion. Therefore, the bulk of the tourism promotion budget, from taxes, is controlled by the Promotion Board, beyond the control of the Ministry of Tourism and is not accountable to Parliament.

“There is no statutory authority for the Promotion Boards/hotels to collect these taxes or levies, apart from the 1970 letter from the Ministry of Tourism. Therefore, it is, I believe, a live legal question whether this approximate $50m, outside of the statutory framework, is a proper tax or levy.”

Tribune Business understands that the Promotion Board levies are based on room rates, with the percentage charged depending upon location in The Bahamas. The Nassau/Paradise Island Promotion Board rate is 10 percent, but this drops to 8 percent and 6 percent for Grand Bahama and the Family Islands, respectively.

Mr Sears, meanwhile, noted that the Government’s total projected revenues of $2.5bn for 2018-2019 equalled the estimated unfunded public sector pension liability, with the national debt standing at $8.2bn and gross national product at $12.9bn.

Describing this as “a broken model”, he added: “When you look at this scenario it’s not a sustainable scenario, it’s not a sustainable trajectory.”