By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
The Central Bank of the Bahamas will have responsibility for managing the proposed sovereign wealth fund, according to legislation tabled in Parliament yesterday.
Kenred Dorsett, minister of the environment and housing, tabled legislation to govern oil exploration in the Bahamas and the establishment of a sovereign wealth fund to hold the nation’s profits from this activity.
Mr Dorsett said the Sovereign Wealth Fund Bill will establish how the proceeds from oil exploration will be used.
“The Central Bank of The Bahamas will have the responsibility as manager of the Fund, which follows the model advanced by most sovereign countries that have such a facility,” he explained.
“In addition, the Sovereign Wealth Fund Bill also makes provision for funds derived from oil, gas, minerals and other natural resources to be deposited to the fund. This will enable future revenues from natural resources such as aragonite, sand, salt and our rich bio-diversity - all of which will be reviewed for legislative and fiscal reform - to be deposited to the Sovereign Wealth Fund.”
Mr Dorsett said on oil exploration: “We are moving from a fiscal regime, which existed over the last 40 years, which was primarily based on flat filing fees, bonds, license rentals, lease rentals, 12.5 per cent minimum royalties up to 25 per cent on petroleum on a sliding production scale, with no state participation, no profit sharing scheme, no additional petroleum entitlement and no tax on transfer rights.
“This new compendium represents a new paradigm, where filing fees, security and acreage rentals will still apply. However, we will get much more than that.”
Under the new Petroleum Bill, the Government will receive royalties up to 30 per cent for petroleum and natural gas, as well as a 40-70 per cent share in the profits.
Mr Dorsett said petroleum royalties will be a 12.5 per cent minimum up to 30 per cent on a sliding production scale.
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