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TUESDAY, JANUARY 24, 2023
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Gov’t battling for $13m VAT on cruise ship sale • Finance chief: ‘No dispute’ $128m sale taxable • Crystal Cruises lender fighting taxation swoop • Nassau Cruise Port, creditors contest priority
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE MINISTRY of Finance’s top official yesterday asserted “there’s no dispute” that the Government should receive a near-$13m VAT windfall from the sale of two cruise ships despite a legal challenge by their secured lender. Simon Wilson, the financial secretary, told Tribune Business “the law is clear” that the combined $128m sale of the Crystal Serenity and Crystal Symphony was a VAT-able
CRYSTAL CRUISE SHIP
transaction given that it occurred in this jurisdiction and involved Bahamian-domiciled entities. Some $12.8m would be owing on the sale, based on the 10 percent rate, making this one of the single-largest VAT generating transactions seen in The Bahamas’ to-date. However, the vessels’ secured financier, DNB Bank, is fighting the application of VAT in a legal battle currently playing out before the Supreme Court as any payment would reduce its loan recovery.
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Insurers: ‘Everyone Pilots join demand for sanctions push against Bahamas airlines will pay’ if storm cover unaffordable By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
• Greater taxpayer burden if more uninsured • Hikes ‘very concerning’, public policy ‘dilemma’ • RoyalStar absorbs 5-7% of rise in own margins By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN insurers yesterday warned that “everyone will have to pay” if hurricane coverage becomes increasingly unaffordable with the issue representing a growing public policy “dilemma” for the Government. Property and casualty underwriters told Tribune Business that an ever-escalating burden will be imposed on the Public Treasury in the aftermath of major storms if growing numbers of homeowners and businesses are unable to afford skyrocketing premium prices for all-perils catastrophe coverage. This was exposed in Hurricane Dorian’s aftermath, with millions of taxpayer dollars still being spend to effect repairs to thousands of uninsured homes, and senior executives said the industry and government now need to “sit at the table” and explore how they can increase
coverage penetration at a time when the Bahamas Insurance Association (BIA) has warned global reinsurers may demand “substantially increased rates” in this nation and wider Caribbean. Anton Saunders, RoyalStar Assurance’s managing director, told this newspaper that the underwriter had sought to mitigate the 20-30 percent hike in reinsurance rates by absorbing 5-7 percent of the increase itself. However, despite this the company had no choice but to increase its catastrophe insurance rates for property by around 15 percent in 2023. “We did not pass all of our costs on to our clients,” he explained. “We decided to absorb about 5-7 percent that we are going to eat internally. Our margins are reduced to absorb some of the cost. We encourage all our clients to review their portfolio to see where they can take on more risk themselves if they can afford to
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US PILOTS are now urging federal authorities to impose sanctions on the ability of Bahamian airlines to access their market unless this nation “immediately ends the collection of these egregious” air navigation fees. The Airline Pilots Association thus added its weight to calls by US airlines for Bahamian carriers to be barred, or “curtailed”, from flying to the US as a “regrettable” next step given that this nation’s government is unlikely to be persuaded to adjust
charges they allege are “unjust, discriminatory and anti-competitive”. Captain Jason Ambrosi, the Association’s president, in a January 20, 2023, letter to the US Department of Transportation, gave Airlines4America’s full-scale pressure campaign against The Bahamas’ air navigation services fees his complete backing. “Air Line Pilots Association International (ALPA) strongly supports the complaint of the members of the Air Transport Association of America (doing business as Airlines4America) against The Bahamas for ‘astronomical’ air navigation service charges under the International Air
VILLAGE Road businesses yesterday said they can “see the finish line” on year-long roadworks that have caused sales revenue to plummet by up to 70 percent. Michael Fields, president of Four Walls Squash and Social Club, told Tribune Business the project’s contractor had disclosed that paving work should start at the road’s northern end this week as business owners wait to receive the Government’s formal response to their proposal for tax relief and
other incentives to help commerce in the area rebound. Revealing that the Davis administration has asked for seven working days to reply when the two sides met last Monday, he added that the Government “had a listening ear” to the private sector’s plight and appeared to be “very open” to providing some form of assistance to Village Road businesses. The details remain to be worked out, and Mr Fields said he wanted to give the Government the time it had requested to respond before commenting in greater detail. Nevertheless, he told this newspaper: “The
Agent ‘unsuccessful’ again on FamGuard conspiracy claims By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FORMER Family Guardian sales agent has been “largely unsuccessful” in her bid to obtain greater damages from the BISXlisted insurer which was again cleared on “conspiracy” to injure by unlawful means”. Jennifer Bain had sought to appeal a Supreme Court verdict which found that Family Guardian worked
with Alana Major, its senior manager of group sales, “to injure” her financially by trying to prevent several major Bahamian corporate clients going with her after the two sides parted ways in late 2015. Justice Indra Charles, in her March 8, 2022, ruling awarded Ms Bain $20,000 in damages for this “conspiracy” to injure her via “lawful means” and another $25,000 over a defamatory letter written on her to the Insurance Commission.
Transport Fair Competition Act,” he wrote. “The Department should take the steps that Airlines4America requests because they would advance key public interest factors in the aviation statutes. As the National Air Carrier Association points out in its answer, which ALPA also supports, the Bahamian service charges are unjustified because the US Federal Aviation Administration provides 75 percent of The Bahamas’ air traffic services; Cuba provides the rest. “In Airlines4America’s estimation, the charges that The Bahamas expects US airlines to pay are likely five times in excess of the actual costs. As a result, US carriers pay twice: Once to the Federal Aviation Administration (FAA) trust fund for these services, and again to The Bahamas for the same services.
Village Rd ‘can see finish’ following up to 70% losses By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
The BISX-listed life and health insurer also had to pay $60,000 towards her legal costs, and $10,675 in disbursements, taking these combined costs and damages to more than $110,000. And Family Guardian was also ordered to pay Ms Bain “damages for breach of contract” equivalent to a year’s notice pay. However, Justice Charles rejected her claim of “conspiracy to injure by unlawful means”. The Court of Appeal, in a unanimous January 19,
2023, verdict noted that Ms Bain was still “dissatisfied” with the Supreme Court ruling - particularly the rejection of her “unlawful conspiracy” claim and failure to award exemplary damages - and took the matter before the higher court. Sir Michael Barnett, the Appeal Court’s president, recalled how Family Guardian terminated Ms Bain’s services on September 29,
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SIMON WILSON
Government actually expressed their sympathy and had a listening ear. They were certainly very open to the possibility of some sort of compensation to the businesses. It was very positive and they were very open to it.
SEE PAGE B2 “They promised a response to us within a week. It’s been four days and I want to give them an opportunity. They have to review our proposal in detail. They have to look at the historical things that were done and then really come to us in writing.” Based on the outcome of the meeting with Michael Halkitis, minister of economic affairs, and other government officials, Mr Fields said he is “very confident” that some relief will
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