business@tribunemedia.net
TUESDAY, AUGUST 15, 2023
$5.70
$5.75
$5.80
$5.71
‘Don’t price ourselves out’ on corporate income tax By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BAHAMIAN realtors yesterday said data showing they enjoy near-40 percent gross profit margins is “skewed very far off” as they urged the Government “to be careful we don’t price ourselves out of the market” over corporate income tax. David Morley, who co-chaired the Bahamas Real Estate Association’s (BREA) committee examining the proposed introduction of corporate income tax, told Tribune Business that hardly any realtors reported gross
t 3FBMUPST EJTQVUF OFBS HSPTT QSPmU NBSHJOT t 4BZ HSFFO QBQFS T EBUB JT ATLFXFE WFSZ GBS PGG t A4IPDLJOH CVTJOFTT FBTF NBZ DSFBUF GBMM PVU profit margins close to the 38 percent identified in the Government’s corporate income tax ‘green paper’. Disclosing that he had “never done so much research in my life”, he added that comparisons of other Caribbean jurisdictions of similar size and with matching gross domestic
product (GDP) indicators revealed that The Bahamas has “one of the highest overall rates” of real estate taxation when the likes of VAT on conveyances, real property taxes and other levies are combined. This, Mr Morley argued, means The Bahamas must be wary if it ultimately
DAVID MORLEY chooses to impose a corporate income tax on net profits as an alternative to the turnover-based Business Licence fee. While corporate income tax’s implementation may “level the playing field” between
countries, he added that his “biggest concern” is this could ultimately result in companies existing The Bahamas due to the high cost of doing business and “shocking” ease of doing business. Confirming that BREA submitted its ‘green paper’ feedback to the Government ten days ago, and in advance of the end-August deadline, Mr Morley said the committee had sought to benchmark its analysis against the likes of Antigua & Barbuda, Barbados, Aruba and St Lucia. These represent the closest comparisons in terms of GDP and population size, with per capita income
also employed for the assessment. When taxes on mortgages, short-term rentals, real estate sales and real property taxes were combined, he added: “It shows The Bahamas has one of the highest overall rates of those countries... We have some of the highest duties paid on conveyancing in terms of our VAT. “One of the comments we made to them [the Government] is that if you’re going to introduce corporate income tax at a competitive rate of 15 percent, you have to be careful that we don’t price ourselves out of the
SEE PAGE B6
Ex-DPM challenges Gov’t on engineer’s BPL report By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net AN ex-deputy prime minister yesterday challenged the Government “in the interests of transparency and accountability” to disclose an engineer’s report justifying the choice of Station A for Bahamas Power & Light’s (BPL) baseload generation. Desmond Bannister, who held ministerial responsibility for BPL under the Minnis administration, confirmed to Tribune Business that Bahamian engineer,
Lambert Knowles, was hired to assess both Station A’s suitability as the home for the $95m Wartsila engines and to oversee the design/construction of the seven pedestals on which they currently sit. Speaking after BPL’s generation management yesterday gave a media tour to highlight the Clifton Pier plant’s deficiencies, which they said will cost close to a further $3m to fix, he again accused the Davis administration of “a dismal failure” in not further upgrading Station
SEE PAGE B5
DESMOND BANNISTER
t #BOOJTUFS 3FMFBTF TUVEZ PO 4UBUJPO " TùTVJUBCJMJUZ t 7JUBM AJO JOUFSFTU PG USBOTQBSFODZ BOE BDDPVOUBCJMJUZ t #MBNF HBNF mOHFS QPJOUJOH JOUFOTJmFT PO #1- XPF
BPL: $3m to resolve Station A deficiencies By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net
First BOB dividend in 11 years ‘a miracle’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net BANK of The Bahamas’ first dividend payment for 11 years was yesterday hailed as “a miracle” by its long-suffering shareholders after it reported its second consecutive year with profits above $11m. Neil Strachan, the BISX-listed commercial bank’s managing director, in unveiling its results for the 2023 full-year, disclosed it had paid $400,000 in dividends to ordinary
shareholders as of June 15. “On June 15, 2023, after 11 years of dividends hiatus, the Bank paid dividends of $0.4m to its common shareholders,” he wrote. “The bank’s financial position continues to be strong with total assets of $952m, of which loans and advances net accounted for $372.3m as at June 30, 2023. Total equity closed at $180.9m, with a common equity tier one ratio of 45.2 percent, which is well beyond the Central Bank’s minimum requirement of 18 percent. The bank’s
capital and liquidity positions remain robust.” Given that the Government and National Insurance Board (NIb) combined own 82.6 percent of Bank of The Bahamas, the majority of this dividend payment some $330,400 - will have gone to them. The balance, some $69,600, will have been shared between the remaining 3,000 minority shareholders who will have received an average $23.2 per person or institution. Nevertheless Mike Lightbourn, Coldwell
Banker Lightbourn Realty’s president, who is one of those 3,000, told Tribune Business of the dividend payment: “It’s a miracle that seems to be headed in the right direction. The thing about the bank is that it could throw all those bad loans to Bahamas Resolve and suddenly everything is alright.” Bank of The Bahamas’ woes, which resulted in two separate government bailouts that saw a combined $267m in government
SEE PAGE B2
Bahamas moves on climate change infrastructure threat By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE Government has enlisted the Inter-American Development Bank’s (IDB) help to assess the risks that climate change poses to “critical transport and energy infrastructure” and the amount of funding needed to mitigate this threat. The multilateral lender, in documents detailing its $370,000 climate
resilience assessment and mitigation plan for Bahamian public infrastructure, said that “unusually heavy short duration rainfall” - in the absence of hurricanes - is impeding vehicle movements and causing damage through flooding in low-lying areas of New Providence. “Infrastructure coverage, capacity, quality and resilience are essential to enabling access to opportunities and services, reducing poverty
and inequality, promoting security and fostering productivity. However, infrastructure assets in The Bahamas are likely to be increasingly severely affected by the increased intensity of climate events and may be unable to accommodate heavy rain and storms,” the IDB warned. “Recently, The Bahamas has experienced unusually heavy short duration rainfalls where almost 12 inches of rain fell in 24
hours, causing widespread localised flooding of roads, disrupting vehicle movements and causing damage, reducing accessibility to public services, disruption of the provision of public services and reduction in mobility for vulnerable parts of the population that use non-vehicular modes of transportation.” Simon Wilson, the Ministry of Finance’s financial secretary, echoed these
SEE PAGE B4
BAHAMAS Power & Light (BPL) executives yesterday said the building housing New Providence’s baseload generation capacity requires close to $3m in repairs to address deficiencies and prevent it from falling apart. Anthony Christie, the utility’s director of generation and energy supply, during a media tour of Clifton Pier’s Station A, which is home to the seven Wartsila engines that can collectively supply 132
Mega Watts (MW) of electricity, said the vibrations they create when operating are causing spalling - pieces of concrete to fall from the roof and ceiling. “In areas where we see spalling and we have some ceiling falling, we are putting up jacks and wood until we can have the structural team come in and do the repairs,” he added. Station A, a 40-plus year-old building, was retrofitted to house BPL’s $95m investment but only five of the seven engines are presently operational with two out of action for maintenance. The planned structural repairs are expected to take place before year-end 2023
SEE PAGE B3