business@tribunemedia.net
MONDAY, JULY 9, 2018
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Target web shop contributions for Relays funding By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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Digital divide: 40,000 tax payments manual By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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AN EX-TOURISM minister has blasted the decision to stop hosting the IAAF World Relays as “short-sighted”, and urged that funding be raised from web shops and private sponsors. Obie Wilchcombe, pictured, told Tribune Business that the government should use the two percent contribution to community causes from the domestic gaming industry, and target public-private partnerships (PPPs), if The Bahamas’ dire fiscal situation meant nothing was available from the Public Treasury. He added that the TV exposure and associated publicity generated by the Relays outweighed “by far” the government’s estimated $5m contribution to staging the 2019 event, placing its value at “hundreds of millions of dollars that you can’t buy”. Warning the Minnis administration that it was “destroying the reputation of the country”, Mr Wilchcombe said the decision to drop the track and field event could risk The Bahamas “never getting anything like this again”. He added that withdrawing from hosting in 2019, following the three inaugural events, was especially ill-timed given that next year’s World Relays will act as a qualifier for the 2020 Olympics in Tokyo - an incentive that would likely have drawn more elite athletes to The Bahamas. Mr Wilchcombe said the Relays had been central to the former government’s strategy to develop a sports tourism niche for The Bahamas, giving it something beyond sun, sand and sea to promote and differentiating the nation from Caribbean rivals. That could now be lost, with Jamaican media coverage yesterday saying The Bahamas’ southern neighbour was now eager to replace it as the IAAF World Relays host for 2019. The former tourism
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ORE than 40,000 tax payments in 2017 were made manually, highlighting how far the government and private sector have to travel to achieve true digital government. The Inter-American Development Bank (IDB), in an economic analysis of the potential benefits from its $30m project to transform the government’s digital/IT infrastructure and boost Bahamian economic competitiveness, revealed that thousands of VAT, business licence and real property tax payments are still being made “in person”. Despite filing and payment requirements for all
* Similar tale for NIB, Road Traffic, Registrar General * IDB analysis highlights long road to e-government * 36,000 pensioners must show life twice per year
three taxes being available online, data disclosed by the IDB showed that 9,554 VAT payments; 7,592 business license fee payments; and 24,019 real property tax payments were not made digitally. Some 1,308 business registrations were also done manually, or “in person”. Collectively, more than 41,000 tax payments to the Department of Inland Revenue (DIR) were not made electronically, exposing how much work remains to reduce the time, cost and inefficiency associated with the continued use of manual methods.
The IDB report showed it was a similar tale at other key government agencies, such as the Registrar General’s Department, National Insurance Board (NIB) and Road Traffic Department - all of which dealt with between 50,000 to upwards of 60,000 transactions for key services manually in 2017, despite many of them being available online. At NIB, some 43,360 benefits and assistance claims were dealt with “in person”, along with 8,176 and 8,215 new registrations of insured persons and employers/self-employed, respectively. And 50,000
‘Challenged’ to reject local bid’s power takeover
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
and job creation. The association’s members are said to include major foreign developers, such as Albany and Baker’s Bay; Sterling Global Financial, the company behind the $250m Hurricane Hole project; and Arawak Homes. “That group stuck together pretty well,” one source close to developments told Tribune Business. “If that group is telling you what you are
THE government’s election promises mean it will “be challenged” to reject a Bahamian group’s bid to take over power supply to East and West End, an advocacy group chief is arguing. Pastor Eddie Victor, head of the Coalition of Concerned Citizens (CCC) and long-time campaigner for lower Grand Bahama energy costs, said the Northern Bahamas Utilities (NBU) proposal was a perfect match for the energy sector goals outlined in the Free National Movement’s (FNM) 2017 campaign manifesto. This pledged to increase renewable energy penetration and expand Bahamian ownership/participation in the industry - objectives that Pastor Victor says NBU’s offer meets, hailing the group’s plans as “a new beginning for the energy sector in The Bahamas”. Pastor Victor and his Coalition have been working with NBU’s principals to arrange town meetings throughout West End in a bid to obtain public support for the group’s plans, with this effort set to shift to East End come early August. They are seeking 1,000 signatories on a petition backing NBU to take over electricity supply from the GB Power, and are hoping to present this to West End MP, Pakeisha Parker-Edgecombe, by month’s end. NBU, founded by ex-GB
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driver’s licence renewals were also processed using the same method. As for the Registrar General’s Department, some 31,200 birth certificate copies; 22,900 deeds search payments; 7,530 “letters of good standing”; 9,747 birth, death and marriage certificates; and 4,989 “other company services” were all handled by nondigital means. The report acknowledged that while some of these services could be applied for online, the likes of birth and death certificates still needed to be
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Govt to alter VAT ‘exempt’ for real estate
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
* Follows lobbying by top developers * DPM: ‘Stand by for change’
THE government appears poised to reverse the budget’s VAT “exempt” treatment of real estate, following lobbying from top developers such as Albany and Baker’s Bay. KP Turnquest, deputy prime minister, told Tribune Business to “stand by” for a potential “change” when asked why the government had imposed what one developer representative yesterday described as “a disaster” for the sector. “There may be a change in respect of that. Stand by on that particular point,” he
replied when asked about VAT “exempt” real estate. He declined to be drawn further on any specifics of such “change”, saying: “I’d like to leave it right there.” Real estate developers were similarly coy when contacted by Tribune Business yesterday, suggesting they were aware that change was coming but providing no details. None wished to speak on the record. “I know they [the government] are planning something, but I cannot say
what. There is something in the works I suspect. We’re making some progress,” one developer’s representative told Tribune Business. This newspaper was told that a newly-formed industry group, the Bahamas Developers Association, had taken the lead in emphasising to the government just how badly VAT “exempt” status will affect a sector - and associated professions such as real estate and construction - that is vital to economic growth
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Budget ‘fixed’ unfair property tax anomaly By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE government reformed the real estate “transfer tax” structure because it was “inherently unfair” to give companies preferential tax treatment over individuals on property purchases. KP Turnquest, deputy prime minister, pictured, told Tribune Business that including value-added tax (VAT) in the levy on real estate transactions had effectively allowed businesses to pay a tax rate
* DPM: VAT inclusion favoured companies * Firms paid 2.5%; residential deals 10% * Also targeted second home ‘loophole’ equivalent to just 2.5 percent of the purchase price. By contrast, parties to residential real estate deals had to pay the full ten percent rate, split between 2.5 percent stamp duty and VAT at 7.5 percent under the tax structure introduced by the former Christie administration. Mr Turnquest branded the disparity in rates as an
“anomaly”, which arose as a result of how VAT works. Companies were able to treat the 7.5 percent levy on real estate purchases as a business expense, and “net it off” or offset it against the “output VAT” they collected from consumers. As a result, they effectively recovered three-quarters of the tax payable. “The reality is it was
never the intent, in our view, for businesses to be able to transfer property at 2.5 percent,” the deputy prime minister told Tribune Business. “This was effectively what was happening with VAT charged on property. “It is inherently unfair that businesses were effectively able to have a 2.5 percent stamp
duty rate while individuals were paying ten percent. We sought to fix that anomaly.” In doing so, and reverting to the old ten percent stamp duty levy, the government
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