By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Extending the Hurricane Dorian tax breaks in their existing form was yesterday branded “a no brainer” by Abaco residents, who argued that to do otherwise would be “pretty heartless” after the latest storm to strike the island.
Ken Hutton, Abaco’s immediate past Chamber of Commerce president, emphasising that he was saying nothing different from his successor, Daphne Degregory-Miaoulis, told Tribune Business that extending the island’s Special Economic Recovery Zone (SERZ) order past the December 1 expiry was vital to “restoring business confidence” given that some who were flooded by Hurricane Nicole may be tempted “to throw in the towel”.
Confirming that Nicole’s main impact was flooding, caused mainly by storm surge but also rain, he explained: “We’ve got a whole lot of people that have not been able to afford to get back in their homes, the SERZ Order is expiring at the end of the month, and a lot of people in Murphy Town and Dundas Town had to evacuate to the shelter because of the flooding and will have to rebuild again, but there’s no SERZ.
“I think it’s absolutely a ‘no brainer’ that the SERZ has to be extended in its entirety. Abaco will rebuild. There’s no doubt about that. We’re a tough, resilient people, but any thought of the SERZ Order being allowed to expire is pretty heartless.”
Pointing also to “significant flooding” that had occurred in downtown Marsh Harbour along Don Mackey Boulevard as a result of Nicole, Mr Hutton added: ‘It certainly wasn’t as bad as Dorian by any stretch, but businesses are just starting to get their footing back and we’ve now been hit again.”
The ex-Chamber chief, asserting that he knew of several businesses flooded by Nicole having just recently re-opened after rebuilding from Dorian, continued: “There’s a lot of businesses this has happened to. There’s a lot of people that may decide to throw in the towel after this and say ‘it’s not worth it’, and that would be a crushing blow to Abaco’s economy.
“We’re three years out from Dorian, and things are starting to look a bit like normal and this hits us again. We need the SERZ Order extended. We’ve got to have it. It’s something that’s needed, that’s required. It’s not the magic pill but will go a long way to restoring everyone’s confidence in the economy here. The Government wants us to rebuild, right? At least I think so.”
Mr Hutton said tourism and other pre-Nicole indicators had suggested the island’s economy was “coming back very strongly” post-Dorian and COVID-19, and added: “This could certainly hurt us again.” The Davis administration has said that, rather than extend the present SERZ and its blanket tax breaks and other exemptions, it is prepared to continue them using a case-by-case format where businesses and individuals must apply individually.
Warning that this will disadvantage businesses in Abaco and Grand Bahama, Mr Hutton explained: “The Government thinking that the SERZ will be replaced by something that is a case-by-case consideration, basically what that does is it cuts out all the local suppliers. If you apply for your home, you’ve got to buy everything in Florida to get the concession.
“You can’t buy anything locally. It doesn’t help the local economy at all. As a homeowner, a lot of things they might need they won’t have the capacity to shop at Home Depot and bring it all in on their own. There’s been absolutely zero consultation from the Government in regard to it. It was basically shut the door; that’s what it is. It’s done.”
Roscoe Thompson, head of the Marsh Harbour/Spring City Township, yesterday echoed Mr Hutton’s call. He said: “I think the Government will have to, and I’m going to say this: If the Government has any sense they would extend the VAT and duty-free zone. There are buildings that people are living in that might not be fully complete that were compromised by Nicole. They’re going to have to gut and remove sheet rock.
“This is time for the Government to back off on VAT and duty here on Abaco and give us time to rebuild.” Chester Cooper, deputy prime minister, earlier this week indicated the Government’s position has shifted a little and it may be willing to consider extending the Dorian tax breaks as is especially following Nicole’s passage.
Michael Halkitis, minister of economic affairs, has said at least twice that the Davis administration believes the current SERZ format is giving away too much in revenue. It feels that the tax breaks are being exploited by those who do not require them, especially wealthy foreign second homeowners, and that the SERZ is also being abused for tax evasion and other nefarious purposes by Bahamians living outside Grand Bahama and Abaco.
The minister has indicated, though, that a structure will be established where Abaco and Grand Bahama residents and businesses will still be able to apply for relief on a case-by-case basis. It is unclear, though, how this will work and whether it is likely to become mired in bureaucracy and red tape.
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