By NATARIO McKENZIE
Tribune Business Reporter
GRAND Bahama may not see any substantial growth or investment in its industrial sector in the short-term until there is greater certainty over how Value-Added Tax (VAT) will affect Freeport, and issues relating to the Budget’s new Customs fees are resolved.
Speaking briefly on the Freeport economy ahead of next week’s Business Outlook conference, Grand Bahama Chamber of Commerce president Barry Malcolm said that while the island’s unemployment rate dropped to 16.8 per cent in November, down from 19.5 per cent in May 2013, this was largely driven by increased employment in the tourism sector with no real growth in its industrial counterpart.
“There are some new jobs in the tourism sector, which is great, and we welcome it, but at the same time there have been one or two properties that have scaled down their operations,” Mr Malcolm said.
“On the industrial side there has not been a substantial amount of growth, nor will there be, in my view, in the near term until we get issues of uncertainty within the Grand Bahama economy resolved.”
He identified those issues as the proposed 15 per cent VAT, set to take effect on July 1, and the Customs Tariff Act, particularly the 1 per cent Customs administrative processing fee introduced last July.
“They are critical issues given the export nature of our economy. They really have to be resolved before you see any additional investment from existing investors or new substantial investment coming in to really grow and expand jobs in the economy,” said Mr Malcolm.
“It’s an important issue for Grand Bahama. The Chamber just this week forwarded to the Office of the Prime Minister its view officially on VAT, and the issues of VAT as it relates to the Grand Bahama economy.”
Mr Malcolm added: “The Chamber feels that whatever new tax regimes are put in place must be understood, must be discussed and must be really taken on-board by the business community.
“The Chamber has sought to really deepen the conversation in Grand Bahama, and the consideration of what are the implications of VAT. We have done a lot within the Chamber to have that conversation.
“In my view, more needs to be done, but certainly we are doing our part to have those conversation for our members and the wider community. The presentations on VAT in Freeport through the Chamber have been our largest meetings over the last 12 months in terms of attendance and depth of participation.”