By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Government has yet to keep its promise to completely roll back the 2013-2014 Budget tax/fee increases imposed on Freeport, with the city’s private sector still “living at the whim of the Government”
Carey Leonard, the Callenders & Co attorney, told Tribune Business that the only thing “dropped” by the Government to-date is the 1 per cent Customs administrative processing fee on the C-14 import forms.
Mr Leonard, a former Grand Bahama Port Authority (GBPA) in-house counsel, said this fee - which can be levied up to a maximum $500 - was still present on Customs’ C-29, C-30 and C-35 forms that all dealt with exports.
Suggesting that this was “defeating the purpose for what Freeport was designed for”, namely a logistics/transhipment/distribution hub, Mr Leonard said no one outside the Government and GBPA had seen the Memorandum of Understanding (MoU) between the two parties that was supposed to resolve all these issue.
Separately, Tribune Business was told by other sources in Freeport’s private sector that Customs was continuing to impose the Environmental Levy on heavy-duty appliances, such as TVs and air conditioning units, that were imported into the city.
The Environmental Levy, together with the Customs processing fee and other 2013-2014 Budget impositions are still being challenged in the Supreme Court by the Grand Bahama Chamber of Commerce.
Mr Leonard, who is part of the Callenders & Co team representing the Chamber in that action, said they were preparing to ask the Supreme Court for a declaration that the new taxes/fees contravened the Hawksbill Creek Agreement.
He told Tribune Business that this appeared the only way to stop “arbitrary” conduct by the Government, and return certainty to Freeport’s business and investment environment.
“The only fee they’ve dropped, as I understand it, is on the C-14 form. That’s the one for everyone importing goods to use,” Mr Leonard told Tribune Business. “That’s the only thing that, to the best of my knowledge, came off.”
He said the 1 per cent Customs processing fee, up to the $500 maximum, was still being levied on the forms used by Freeport’s manufacturers for their exports.
“You’re still paying the 1 per cent on the way out the door,” Mr Leonard said, adding that the fee was also being levied on Customs forms for transhipment and equipment brought into Freeport to facilitate repairs.
This has an immediate negative impact on Freeport’s manufacturing/industrial sector, which accounts for much of this nation’s meagre physical goods exports. Costs are increased, and the very essence of a ‘free trade zone’ is undermined.
All this is seemingly contrary to public pledges by Prime Minister Perry Christie, who promised earlier this year that following talks with the GBPA, Hutchison Whampoa and Mediterranean Shipping Company (MSC), the Government had entered into an MoU with the former.
This was intended to roll back, and remove, the 2013-2014 new and increased taxes imposed on Freeport in exchange for the two companies moving ahead with the $250 million Phase V expansion at the Freeport Container Port.
Yet, with no one outside the GBPA and the Government seemingly having seen this MoU, confusion appears to have resulted. In particular, many GBPA licensees have questioned whether its terms - and the tax roll back - apply to all businesses, or just Freeport’s major industrial and manufacturing concerns.
“There’s been no amendment to the Customs Management Act and the regulations with respect to the 1 per cent on the C-14,” Mr Leonard told Tribune Business.
“We’re living at the whim of the Government. Freeport is still hurting, and it’s ridiculous. It’s defeating the purpose for what Freeport was designed for.
“We have yet to see this MoU. I don’t know what’s in there. I understand it was supposed to take it [the 1 per cent processing fee] off all these forms.”
Mr Leonard said suggestions that Freeport was failing to pay its fair share of taxes “misses the point”, as the city paid for its own maintenance and upkeep, and was a consistent annual net contributor to the Public Treasury.
Summing up, the attorney said the Chamber had little to no alternative but to proceed with its legal challenge to the 2013-2014 new and increased Budget taxes/fees.
“The Chamber is still going ahead, and we are preparing to ask the court for a declaration on the Hawksbill Creek Agreement and the Customs Management Act,” Mr Leonard told Tribune Business. “I think this is the only way this matter is going to be resolved. Business likes and needs certainty.”
A Freeport private sector source, speaking on condition of anonymity, said the Government had yet to refund the 1 per cent Customs processing fees already paid by the city’s business, despite implicitly admitting it breached the Hawksbill Creek Agreement via its removal.
“They have not issued any refunds for the period of time they collected it,” the source said.
They added that while this had gone back to a $10 fee, Customs was still imposing the Environmental Levy on imported applicances.
The agency was also charging the $50 ‘attendance fee’ per trailer but, because this is seen as recovering the cost of providing a service, the Chamber is not challenging it in court.
Comments
TheMadHatter 9 years, 6 months ago
Freeport's economy was SUCKING very very bad in the lead up to the last election. At that time the people of Grand Bahama did not see fit to give the DNA (or anyone different) EVEN ONE SEAT in Parliament to give a fresh voice to their concerns.
Instead they voted for the SAME OLD people who had been in power just 5 years earlier and did nothing great at that time.
FREEPORT people deserve exactly what they are getting. It is what they voted for. Maybe next time (in 2017) they will decide that they want something new. Until then - suck it up.
TheMadHatter
TheMadHatter 9 years, 6 months ago
I want to be clear. The Mad Hatter is not any kind of supporter of the DNA. I also not opposed to the DNA. I am just saying - how can you vote for the same old people and expect brand new results. Have you ever heard the names of any of the PLP MPs currently in power before? I've been hearing those names for over 20 years - some longer than that. Freeport people asked for what they are getting. What harm would have been done by the DNA (or anyone different) getting 5 or maybe 7 seats in the House? It would give voice to new ideas on the Parliamentary Channel - where all Bahamians could watch and learn what is happening in their country and how they are getting the short end of the stick every single day. Exactly how the Govt is doing it. Instead you now have NO INFO coming to you. You are in the dark, and the economy continues to suck.
We have been "independent" for 41 years and have only had 3 Prime Ministers in that time. We could have had 8. Three out of eight is less than 50% of what was possible. I mean, why even bother? We might as well have stayed with England if people just want the same old, same old. Scotland just chose to remain slaves yesterday in their national referendum, and I say if slavery is good enough for white people - it's good enough for us.
TheMadHatter
The_Oracle 9 years, 6 months ago
The Problem with the DNA is they are as clueless as both PLP and FNM about the Hawksbill Creek Agreement, and appeared to accept campaign donations from Sir. Jack, just as both PLP and FNM did. Sir Jack was sitting front row at the DNA candidate launch prior to the 2012 election, where they presented a lame duck slate. The real problem is no Bahamians will stick their necks out on principal, instead preferring to hide in the shadows and take the hits as dished out without challenge.
The_Oracle 9 years, 6 months ago
Seems PGC has rolled back the environmental fees levied against certain items imported, If one assumes the fee is for the Government to eventually foot the disposal bill of these items and the money will not hit the General Consolidated account but be escrowed against the costs then fine, but In Freeport Garbage disposal is the responsibility of Sanitation services, as contracted by the G.B. Port Authority. No, they are not one and the same, all assets were stripped out of the G.B.Port Authority some years ago, Sanitation is privately owned. Now if we could only get PGC to stop the Business to Business services VAT idiocy........
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