The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Bahama and Abaco businesses yesterday hailed the extension of key Hurricane Dorian-related tax breaks for another six months as "a good present for Christmas".

Greg La Roda, the Grand Bahama Chamber of Commerce's president, told Tribune Business that confirmation of the extension to end-June 2021 by newly-appointed minister of state for finance, Senator Kwasi Thompson, was "a big relief to businesses and consumers on Grand Bahama".

Disclosing that uncertainty over the extension, and whether the mixture of VAT, import tariff and other tax breaks would continue beyond year-end, had been preying on the minds of merchants and the general public, he added that their continuation would help to make the Bahamian private sector more price competitive with foreign rivals and encourage locals to stay shopping at home.

Ensuring more dollars are spent at home this Christmas is seen as vital to helping the post-COVID-19 recovery, and Mr La Roda said of Mr Thompson's announcement: "All of that is great news. I think it's going to have a major impact on both businesses and residents in Grand Bahama.

"The significance of extending these concessions as it relates to businesses, especially coming into the holiday season, is it really puts consumers in a position where it remains more attractive to shop at home. That will allow those businesses to make profits and get into a better financial standing going forward.

"The fact they've extended it to the end of the fiscal year allows that to continue until the middle of 2021, and businesses will have more time to recover and get back on a firmer footing. That extra six months will be a big relief to businesses and consumers on Grand Bahama."

Mr Thompson, in addressing the Senate yesterday, confirmed that the sale and importation of key household items such as appliances, furniture and furnishings would remain "tax free" - devoid of any VAT and import duty - which was a key demand of the Abaco Chamber of Commerce on that island.

Fuel sales will also remain tax free to aid persons still on generator power, while the discount on VAT levied on real estate transactions worth less than $500,000 will also be continued for another six months.

And, given shipping and logistics delays, Mr Thompson said the Government will "honour" tax breaks on imported vehicles provided documentary evidence shows they are shipped by year-end 2020 and arrive in The Bahamas by end-April next year.

"To further assist persons and businesses who are still recovering, and are now grappling further with COVID-19, the Government has agreed to extend a number of tax relief measures to June 2021," Mr Thompson said of the two islands' Special Economic Recovery Zones.

"Despite the fact that government revenues are down by as much as 50 percent, this administration is ensuring that we still do as much as possible to cushion the economic blow for communities experiencing hardship. The reality of our fiscal situation means that we cannot do or have everything on our wish list. However, the Government will continue to deliver tax relief in critical areas."

He added that the continued tax relief "had to be weighed against the reality of a very challenged fiscal situation brought about by the current economic reality. Nonetheless, the Government is demonstrating that it is fully committed to supporting the ongoing Hurricane Dorian recovery process that continues within the Economic Recovery Zone. The work is not over, and we plan on leaving no one behind".

However, while the tax breaks on building materials and the VAT exemption on construction services were already scheduled to last until end-June 2021, Mr Thompson said not all requests could be granted.

"The relief provisions from Business Licence and real property taxes, and from VAT and import taxes on consumables, clothing, equipment and other replacement items other than those referred to above, will be discontinued at December 31 as per the current order and the originally agreed schedule," Mr Thompson said.

Ken Hutton, the Abaco Chamber of Commerce's president, while praising the Government for its actions and granting the extensions, gave a cooler reaction to the announcement by saying he wanted to see specific details in writing.

"I think it provides a certain level of certainty because one of the big issues we have is, because of the COVID-19 situation worldwide, a lot of factories and a lot of suppliers are unable to provide materials we need in a timely fashion," he explained. "If you order a fridge today you're not going to get it until March.

"It's important to understand we were shut down for eight months due to COVID-19 or more. We're not complaining. It's a good start. We're thankful the Government continues to be open and responsive to our input. We all have the same goal, which is to get Abaco back up and running as quickly as possible so we can resume being a major contributor to the Treasury."