The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s new ‘Environmental Levy’ is threatening to put tyre shops “out of business”, an attorney warned yesterday, forcing businesses to come up with thousands of extra dollars to clear imported shipments.

John Bostwick, of Bostwick & Company, told Tribune Business that one used tyre business had suddenly found itself needing an extra $20,000 to clear a 2,000-strong tyre shipment.

Warning that the Environmental Levy, which ranges from $5 to $25 depending on tyre type, had the potential to put tyre repair and sales shops out of business, Mr Bostwick said these operations employed some of the “least employable” workers.

And, if these persons were laid-off, Mr Bostwick said there would be an inevitable rise in crime and social security payouts.

Acknowledging that he had been “consulted” by tyre salesmen over the new tax, Mr Bostwick told Tribune Business: “It’s a thriving business, but now it’s $10 on every tyre imported to the Bahamas.

“That has put the used tyre business out. There’s a guy who has got to come up with an extra $20,000 to clear his shipment of 2,000 used tyres on the dock.”

Assessing the potential ramifications of imposing this largely-unexpected Environmental Levy, Mr Bostwick added that the Government had much of its pledges to “believe in Bahamians, believe in industry consultation.

“You cannot mean at this time to put used tyre businesses out of business,” he told Tribune Businesses, “that employ the most unemployable members of society. At this particular time you cannot intend to do that, but that is what you have done.”

Mr Bostwick also questioned whether businesses and consumers would get a ‘refund’ of their Environmental Levy should they ultimately dispose of the products to a recycling outfit or scrap yard.

And he also noted that the Environmental Levy was being applied to products that could supposedly by imported to the Bahamas duty-free - particularly computers.

“It would appear to me that the Government, under the guise of an Environmental Levy, has put a broad-based tax on top of Customs duties,” Mr Bostwick said.

“The justification is that these things cost money to dispose of, but it’s just a blatant attempt to squeeze more money, and you wonder what else is going to show itself from this next week.”

The attorney, who is also an FNM Senator, warned the Government that its 2013-2014 Budget tax rises - and inevitable cost of living increases - were essentially squeezing a ‘dry carcass’ in the shape of the Bahamian middle class.

“The average middle class are broke,” he told Tribune Business. “They are living from pay cheque to pay cheque.

“In an economy not generating any extra money, they [the Government] are going to be moving money from private to public hands.”

Warning that the squeeze could encourage ever-more creative forms of tax evasion and illegal dealing, Mr Bostwick added: “You are just going to bankrupt the middle class or create a new class of law breakers and tax evaders.

“They just don’t have it. It’s just madness. I can’t seeing it having any good results.”

Mr Bostwick said decades of experience had shown that the private sector was a better manager of money than the Bahamian public sector, yet the Government was taking funds from the former and putting it in the latter’s hands.

And as for Moody’s praise of the Budget, he added: “It’s a good Budget because it makes the Bahamas a high tax jurisdiction. That’s what they want.”