By NEIL HARTNELL
Tribune Business Editor
A well-known QC yesterday said “dozens of Freeport businesses” had contacted him about bringing a lawsuit against the Government and Grand Bahama Port Authority (GBPA) over recent tax increases, adding that these were “decapitating” the city’s economy.
Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that legal action momentum was building just as he won a Court of Appeal verdict over the Supreme Court’s refusal to grant his companies leave to bring an earlier action against Customs.
Mr Smith said the appellate court had sent the case, relating to Customs’ previous insistence that all GBPA licensees produce a National Insurance Board (NIB) letter of ‘good standing’ in order to receive their annual ‘bond’ letter, back to the Supreme Court for a fresh trial,
And, returning to the present and the 2013-2014 Budget’s latest tax ‘impositions’ on Freeport’s ‘free trade zone’ status, Mr Smith said: “Dozens of licensees have contacted me with a view to advising on bringing an action against the Government and Grand Bahama Port Authority to uphold their rights as licensees under the Hawksbill Creek Agreement.
“Effectively, these taxes are putting Freeport out of business. It is only in the industrial sector that Freeport has managed to eke out a skeletal existence over the last decade, and now in the industrial sector, maritime sector, construction industry and aviation sector, in one fell swoop, this government has managed to decapitate Freeport’s economy.”
Arguing that Freeport was “on death’s doorstep”, Mr Smith expressed happiness that the GBPA’s 3,500 private sector licensees were “finally waking up” and working together to protect their interests.
He once again called on the Port Authority to protect its licensees’ commercial interests, adding: “The Grand Bahama Port Authority has a monopoly on business and administration in Freeport, and they cannot simply sit back and collect licence fees while their licensees are singularly hung by the Government’s tax noose.
“It is unbelievable how deeply affected businesses are by these drastic changes in the tax structure. It always saddens me how successive FNM and PLP governments fail to appreciate how Freeport remains an artificial economy that is affected by the manifest machinations of government.”
Meanwhile, Mr Smith said the three GBPA licensees, in which he has an equity interest and which brought the ‘NIB letter’ action, had seen the Court of Appeal send their application for leave to bring Judicial Review back to the Supreme Court.
The lower court had previously ruled that there was no need for a trial of the matter because Customs had withdrawn its NIB letter demand “on the eve of trial”.
However, Mr Smith said this had been overturned by the Court of Appeal, albeit on different grounds than he had advanced.
“This case is not simply about the NIB letter,” he added. “It is almost every year Customs coming up with some illegal, abusive, hare-brained scheme to find some way to cut down and reduce the rights of licensees to enjoy the Customs exemptions they benefit from until 2054.
“The recent changes to the Customs Management Act are nothing more than another nail Customs is putting in Freeport’s coffin.
“Soon enough, there will be no more Freeport, and by then it will be too late for the Government to make any changes to resurrect the dead goose, never mind trying to find any of its previous golden eggs.”