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The Hawksbill Creek Agreement is an agreement with a 99-year lifespan, expiring in 2054. However that date is misleading, as arguably some of its most beneficial aspects expired in 1990. For on that year, exemption from Real Property Tax, Personal Property Tax, Capital Gains Taxes, Taxes on Shares and Earnings, expired. Of course, due to a private arrangement with the Grand Bahama Port Authority the expiration date of these benefits was extended to 2015.
Why should you care about the forthcoming expiration of these benefits? Will paying annual Real Property Taxes have an impact to the bottom line of your company? Should annual earnings taxes be extended to Freeport, will the payment of these make a dent to your profitability? Do you plan to realize capital gains from years of hard work building up the value of your business? How do you feel about sharing 10% of this with the Government? Without a doubt, if the exemptions from these taxes is not extended every business owner, every property owner and most of the residences of Freeport will feel the pinch (or pain) of higher taxes.
Unlike 1990, when the shareholders of the GBPA entered into the Freeport Act with the Government which provided direct benefits to both parties and indirectly benefited the Licensees and residents of Freeport, today there is a different situation at the GBPA. Today there is an opportunity for the Licensees, as one of the original three parties of the HCA to extend the tax benefits via an amendment to the original agreement. However, to achieve this goal, Licensees need to work together with a desire to improve our community and country.
Where do we start? Perhaps we need to first find answers to some questions raised by critics. After all, why should the Government continue to provide favorable tax status to Freeport. Doesn’t a tax benefit provided to Freeport take something away from others in The Bahamas?
By MARK A. TURNQUEST
STAKEHOLDERS who focus on small business development have been unsuccessful in creating strategies/policies on how to mitigate the negative impact of the recession with regard to small and medium-sized enterprises (SMEs) in the Bahamas. There have been few planning activities that focus on how we are going to improve this sector’s future viability.
The SME community is at a crossroads. This vital industry (SME) has been underserved and underdeveloped since 1973. There has been no serious innovative activity to develop the industry up to 2010. SMEs are still only contributing 5 per cent to GDP (or even less) from 2007, since Philip Schneuwly, an IDB consultant, conducted the report entitled: IDB SME Final Report 2007. I had assisted Mr Schneuwly with that research in regards to non-financial organizations’ participation in the development of SMEs in the Bahamas.
By NEIL HARTNELL
Tribune Business Editor
THE Prime Minister and minister of state for finance have been urged to “immediately intervene” over what one leading attorney described as Customs’ attempt to “hold businesses hostage” in Freeport over demands for the submission of monthly bonded goods sales reports.
Fred Smith QC, the Callenders & Co attorney and partner who has won numerous Supreme Court verdicts against the Customs Department for violating the Hawksbill Creek Agreement’s provisions, confirmed that there were no provisions in that treaty or the Customs Management Act requiring the submission of such reports.
Racing to the defence of Grand Bahama Port Authority (GBPA) licencees, who had seen their business operations and wider economy thrown into “confusion” by Customs’ latest demand, Mr Smith said: “I am shocked that Customs should be acting in such an arbitrary, heavy-handed manner towards licencees in Freeport.
“Customs does not have the right to hold businesses hostage by refusing to clear their trailers because the licencees may or may not be doing something else incorrect.
“The Hawksbill Creek Agreement and Customs Management Act provide for appropriate processes for the way something should be done, and the powers Customs has or does not have. Holding licencees to ransom by not clearing their trailers is a dictatorial abuse of their powers, and simply unacceptable.