The Tribune

EDITOR, The Tribune.

Do we have a “sacred cow” syndrome in the Bahamas?

I am, of course, specifically referring to Bahamas Electricity Corporation (BEC) and the Web Shop Operators.

The recent story of BEC employees being allowed to “double dip” their sick-pay benefits came somewhat as a surprise however it became more of a shock when I further learned that (a) it had being going on for several years and that (b) employees in other Government departments were following the same procedures.

There are two Regulators in the Bahamas i.e. The Securities Commission of the Bahamas and The Central Bank of the Bahamas. Part of the review and monitoring process of these Regulators relates to Corporate Governance. Part of the Corporate Governance process is evidenced annually by a Certification signed by all the Directors.

The signed report indicates that all the Directors are aware of the Corporate Governance Guidelines and that their respective companies have complied therewith. To use a favourite term of the Regulators it is “best business practice”. Why doesn’t Government (who incidentally subsidises both Regulators) follow a similar practice?

However, back to the BEC situation, it seems to happen that every Christmas Season ad nauseam there are calls for strikes and threatened power cuts, etc.

The Union leaders call out for Strikes and/or coming out to March in Protest. Such actions are an abuse of power.

Quite simply “double dipping” is illegal, immoral and unethical.

None of the companies whose directors sign the aforementioned Corporate Governance Certifications would ever consider such a practice taking place in their respective businesses let alone permit it to happen.

The BEC situation is exacerbated by the fact that these employees are “double dipping” out of the taxes extracted from the public.

Yes, I agree that there should be Marches of Protest to demonstrate displeasure. It should not however be undertaken by BEC employees who are protesting against the possible removal of their unjustifiable “double dipping”.

The marches should be comprised of the people – the BEC consumers – who have to pay the cost via the extraordinarily high utility bills and/or the Government underwriting their losses. Unfortunately, the citizens of the Bahamas, like those of many other countries, consist of a majority of reasonable and rational people who are usually too complacent to be fired up sufficiently to organize a protest rally. They should, however, give it more thought and passion as it is their money that is being “stolen”! Unfortunately and without any valid explanation the Government allows this situation to exist and to continue so that it appears to become the “norm.”

If the Directors of BEC followed “best practice” and signed certificates of Corporate Governance they would be subject to the penalties for allowing these malpractices (including the authorizing of excessive overtime payments) to exist. Such penalties include fines and prison sentences. Why should they be held to a different standard? To make matters worse it has recently been reported that the Government agrees that “double dipping” is part of the Union contract and cannot be taken away.

This is an unbelievable position for any Government to take and shows their contempt for spending the people’s money without taking any accountability or responsibility. For the BEC employees this is a win-win-win situation as also occurs with many of their other employee benefits. Must be a “sacred cow”.

In the interim there continues to be much discussion about the introduction of VAT, the majority of which is critical and fully justified. However, as part of the Government information relative to VAT occasional pieces of information are leaked out. One of the more recent announcements stated that Web Shops would be exempt from VAT.

The continued operation of web shops is to say the least extraordinary and beyond normal comprehension.

Earlier in the year, the Government abdicated its responsibility about legalizing web shop operations and decided to call for a Referendum – i.e. the voice of the people.

The people responded to the call and the results were made very clear – i.e. that web shops should not be allowed to operate.

Did the Government follow the wish of the people? The answer is a simple “No”. The result being that as of today web shops operate as usual. They do not pay any form of taxes other than a business licence fee and are now to be excluded from VAT. I have heard of various comments relative to their exclusion - (i) one cannot tax a business that is illegal and (ii) in most cases there is no “value added”. What I am unable to reconcile with the foregoing

statements is (a) if the business is illegal then how can it get a business licence? (b) in a lot of cases one can agree that there is no value added but what about the winners? This must be another “sacred cow”.

Why are these “sacred cows” encouraged and allowed to exist?

It seems to demonstrate arrogance by the people’s representatives where they feel they can do what they wish with the people’s taxes without having to explain or account for their actions.

In another recent example of this flippancy, a legitimate question was raised in the House of Assembly enquiring about the cost of the sizeable delegations travelling to (a) Dubai and (b) Sri Lanka plus side trips. The response that was reported said that “we do not know the actual cost but it was within the Budget”. Was this the reply that was deserved? Was this the reply expected? Was this an example of Corporate Governance? Was the reply considered “best business” practice? I think not.

It has also been recommended that the Government needs to increase its tax revenues and broaden its tax base hence one of the reasons for the introduction of VAT.

The introduction of VAT is proving to be distasteful medicine and especially so when the Government encourages “sacred cows”, and flagrantly flouts accountability and responsibility of the people’s taxes.

Such a scenario makes VAT an extremely hard sell. It is abusive actions such as mentioned that will ultimately arouse the general public into a Protest March – even complacency has its limits!

FAIR AND BALANCED CITIZEN

Nassau,

November 30, 2013.