The Tribune

By LEANDRA ROLLE

Tribune Staff Reporter

lrolle@tribunemedia.net

IN an effort to assist Hurricane Dorian survivors who experienced rebuilding delays due to COVID-19 restrictions, the government has extended several tax exemptions deemed “critical” to Abaco and Grand Bahama’s recovery to June 2021.

The move should be a welcome reprieve to many residents, who have long been pleading with the Minnis administration for further extension of the tax breaks, many of which were initially set to expire at the end of this month.

Addressing the matter in the Senate yesterday, newly appointed Minister of State for Finance Kwasi Thompson said the government has decided to extend several of its tax relief measures to next year as a result of COVID-19’s negative impact on rebuilding efforts.

This includes tax free purchases of all locally bought and imported home furniture items and other homeware appliances.

Local gas has also been designated as a tax-free item in the special communities, given the fact many residents are still without electricity and having to use portable generators as means to electrify their homes.

Further, the government is also offering VAT payable discounts on real property fees provided transactions do not exceed $500,000.

“Despite the fact that government’s revenues are down 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,” Senator Thompson said yesterday.

“The reality of the 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. So, we recognise the need for concessionary fuel pricing while the work to rebuild the power grid continues.

“For that reason, the local sale of fuel will continue to be tax free given the ongoing need to run portable generators as electricity restoration continues in some communities.”

He continued: “We also recognise that rebuilding takes time and the reconstruction of damaged homes continues. For that reason, the local sale and importation of household furniture, furnishings and appliances will continue to be tax free.

“We recognise that many ordinary Bahamians are still looking to buy and sell properties for regular residential development. For that reason, we are extending the opportunity to receive a discount on the Vat payable on the sale of real property for transactions valued up to $500,000.

“We recognise as well that vehicles that have been ordered, they ought to arrive in the country by the end of December. Accordingly, the government will honour the current tax concession on replacement vehicles provided that there is documentary evidence that has been shipped before December 31, 2020 and provided that it arrives by April 30 of 2021.”

Abaco and East Grand Bahama were declared special economic recovery zones by the government in 2019 following Hurricane Dorian’s devastation.

The economic recovery zone plan provides businesses and homeowners in storm-ravaged islands with a variety of tax breaks and concessions.

For example, VAT, import duty and excise tax has been eliminated on construction materials and all other physical goods sold and brought into the zones.

The government also removed VAT from construction services. Some of the relief initiatives were initially set to expire in June, but the government in May extended the tax breaks until December 2020 due to COVID-19’s impact.

Yesterday, Senator Thompson clarified that “the relief provisions for business licenses, real property taxes and from VAT and import taxes on consumables, clothing, equipment and other replacement items” will still be discontinued at the end of this month.

However, the tax exemptions related to building materials, as well as the elimination of VAT on construction services are not due to expire until next June.

Senator Thompson said while the government understands residents’ desire to have all the measures extended until next year, officials cannot do so due to economic restraints brought on by the COVID-19 pandemic.

“Certainly, we appreciate the views expressed by some that all current measures should be continued,” he stressed. “That sentiment, however, 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 in the special economic recovery zone. The work is not over and we plan on leaving no one behind.”