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FRIDAY, JANUARY 31, 2020
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$130m VAT increase allays fears over hike By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE $130m year-overyear increase in first half VAT revenues proves that the 12 percent rate hike has “not dampened” consumer spending, a top Ministry of Finance official argued yesterday. Marlon Johnson, the Ministry of Finance’s acting financial secretary, told Tribune Business that the 33.7 percent increase in VAT revenues during the six months to end-December 2019 showed fears voiced when the rate increase was announced had failed to “materialise”. Many observers had predicted the 60 percent hike in the VAT rate, from 7.5 percent to 12 percent, would cut consumer demand to the extent that The Bahamas would be thrown back into recession, but Mr Johnson said 2019-2020 first half performance demonstrated the economy had been “healthy
$187m lossmakers match fiscal deficit
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
THE $186.7m in subsidies to loss-making state-owned enterprises (SOEs) over the six months to 2019 yearend almost exactly matches the government’s deficit for that period, it was revealed yesterday. The government’s “fiscal snapshot” for the first half of 2019-2020 shows that the $188.7m deficit, which measures by how much the government’s spending
MARLON JOHNSON enough to absorb the increase without a deterioration in consumption”. However, the government’s six-month “fiscal snapshot”, which was released last night, showed as much as $86.2m or two-thirds of the VAT increase may have resulted from the switch with stamp duty as the principal levy on real estate sales in this year’s budget. With VAT now acting as either the two percent or ten percent “transaction tax”, stamp duty from such deals fell by 82 percent. Still, the government’s total
SEE PAGE 6 exceeds its income, would have been virtually eradicated if all SOEs were transformed into “cost recovery” or break even entities. The Minnis administration has previously stated its objective to achieve just that over a three to fiveyear period, but the report showed it has seemingly made little headway to-date as total subsidies to nonfinancial public corporations jumped by 23.2 percent year-over-year. The Public Hospitals Authority (PHA) continues to be the main consumer of taxpayer financial assistance, with Bahamasair and the Water & Sewerage Corporation too far behind.
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A UNION leader has voiced fears that Bahamas Power & Light (BPL) will be unable to meet repayments on its $580m bond as its largest, wealthiest customers race to adopt renewable energy. Paul Maynard, pictured, the Bahamas Electrical Workers Union’s (BEWU) president, told a Democratic National Alliance (DNA) Town Hall Meeting on energy reform that BPL would have
insufficient customers and revenue streams to repay investors if its best-paying, major clients reduced their consumption through the increasing use of solar and other technologies. He said: “What we’re not considering is the fact that Lyford Cay is now ten to 15 percent solar. Old Fort Bay is 20 to 25 percent solar, Albany is ten to 15 percent solar, Ocean Club Estates is now five to ten percent solar, and they are the big paying customers. They are BPL’s base customers. Paradise Island,
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Battle over The Pointe’s Margaritaville heats up
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
Renewable fear over BPL bond By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net
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TTORNEYS for Margaritaville’s Bahamian franchisee yesterday said 79 percent of the brand’s defenses have been dismissed as their bid to block its tie-up with the $250m Pointe project heats up. Todd Levine and Adam Steinberg, who are acting for Boss Investments, said Palm Beach County’s 15th judicial circuit court had presently left the Margaritaville defendants with just seven of 34 defenses to their client’s “breach of
• PI franchisees attorneys hail court success • Want to depose top CCA Bahamas executive • Claim client used to establish local ‘foothold’ contract” claim following a January 16, 2020, order. The attorneys, in written replies to Tribune Business questions, said they were “very confident” in the merits of Boss Investments’ case as the two sides continue exchanging documents and interviewing witnesses ahead of a scheduled March 2020 trial. They added that Boss, whose principals are Peter Maury, the Association of Bahamas Marinas
(ABM) chief, and Mike Grandonico, planned to depose China Construction America’s (CCA) senior Bahamas-based executive, Daniel Liu, arguing that The Pointe’s developer is “at the centre of this dispute” due to Margaritaville’s branding of its resort. Boss Investments, which is the Paradise Islandbased Margaritaville franchisee, is alleging that the brand’s tie-up with The Pointe violates its contract
as the exclusive licensee for The Bahamas, and Messrs Levine and Steinberg yesterday warned that CCA would have to “remove everything related” to the brand should their client’s court case succeed. “This could result in the new resort being stripped of any branding associated with Margaritaville and/ or Jimmy Buffett,” they added, a development that
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Island Luck co-founder a ‘fugitive’, says judge By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net A FEDERAL judge has branded one of Island Luck’s co-founders a “fugitive” from US justice in rejecting his bid to have neardecade old human smuggling charges thrown out. District judge Denise Cote, in a January 27, 2020, verdict said she would not consider Adrian Fox’s claim that his constitutional rights to “a speedy trial” were being violated by the US government because he has remained in The Bahamas and not submitted himself to the court’s jurisdiction. She added that Mr Fox, who teamed with Sebas Bastian to create The Bahamas’ largest web shop chain by market share with over $100m in annual revenues, was effectively “flouting the
• Fox loses bid to throw out smuggling charges • Atty: ‘We firmly believe case should be dismissed’ • Web shop owner determined to ‘put it behind him’
ADRIAN FOX judicial process” through having been aware of the charges against him since at least 2014 but deliberately remaining outside the reach of the US authorities. “The court declines to consider the merits of Fox’s motion,” Judge Cote ruled. “Under the fugitive disentitlement doctrine, judicial resources need not
be expended on the motion of a defendant who is unwilling to submit to the court’s jurisdiction. “As a threshold matter, Fox is a fugitive... Fox’s argument - that a defendant becomes a fugitive only upon actual flight from the judicial district in which he was indicted - is unavailing.” The judge added that the “fugitive” term can also be applied to persons who know they have been indicted but refuse to return to the US to face charges. Noting that the current situation favours the Island Luck co-founder, Judge Cote said: “First, unless Fox appears he cannot be held to account on the indictment.
Thus, while a decision in Fox’s favour would grant him relief, a decision that the indictment should not be dismissed would be unenforceable... “He has been aware of the indictment since at least 2014, when counsel appeared on his behalf, but he has chosen to remain beyond the reach of the warrant issued for his arrest. Third, entertaining Fox’s motion would encourage similar flights from justice, which interfere with the efficient operation of the courts. “Fourth, if the defendant continues to remain a fugitive, the [US] government
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