The Tribune

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

Marco City MP Gregory Moss is emphatically opposed to the extension of real property tax exemption in Freeport, saying Grand Bahama stands to gain some $50 million per annum in real property tax revenues alone from the industrial sector.

He estimates that another $17 million in real property tax would be payable by the Grand Bahama Port Authority’s sister company GB DEVCO, which owns 70,000 acres of land in Grand Bahama.   

In August of this year, certain provisions of the Hawksbill Creek Agreement, namely business license fees and real property taxes, are due to expire, and government has appointed a six member committee to review the Hawksbill Creek Agreement. 

Mr Moss, who has appeared before the committee, gave his opinions as to why he feels government should not extend real property tax exemption for another 30 years in Freeport.

Last week, he also spoke with local pastors at a Pastors Forum in Grand Bahama at the Freeport Bible Church on the real property tax and the Freedom of Information Act.   

Mr Moss revealed that real property tax would only apply to foreigners who own land, and would not apply to Bahamians in Freeport.

Real property tax charged under the Real Property Tax Act is one per cent of the accrued value of your land.

When the RPT exemption in the HCA expired  in 1992, the FNM government extended it. 

Mr Moss stated that the late Edward St George, who was then chairman of the GB Port Authority, told Bahamians that they were protecting them and if the RPT was not extended the government would start charging them tax for their land.    

However, the Marco City MP said that Mr St George was telling “a lie.”

Mr Moss noted that in Nassau they exempt most people from RPT.  “They have a ceiling of $250,000, so it is only if your house is valued over that, you pay RPT. And even if it is over that, you get exempted for the first $250,000, so it does not affect everyone like that. Suppose your house is worth $300,000, it would be a $3,000 tax, and the $250,000 will disappear, so you would pay $500 in tax per annum.

“So when Mr St George at the Port Authority said they were doing this for Bahamians; they are extending this tax for Bahamians because they don’t want us to be taxed, that was just a lie, it is not true at all. The government went ahead with that, but that is simply not true.”

According to Mr Moss, there is a provision in the HCA,  Clause 2 (27), which prevents that from happening.  

“That clause started to reveal what happened when these taxes expire. And it says on the expiration of the said period of 30 years “that for thirty years from the date of this Agreement no real property taxes or rates and no real property levies (whether capital or periodic) of any kind shall be levied charged or collected by the Government within the Port Area  or upon or against any land building or structure within the Port Area” (ref: Hawksbill Creek Agreement  Ch.261-12] ).

Mr Moss said that it means even after it expires, no taxes apply to Freeport unless they apply to everywhere else in the Bahamas.

“So even if it expires it does not apply to Freeport unless it applies to everyone else. And when it comes to RPT, it only applies to the City of Nassau to Bahamians on the island of New Providence.  It does not apply to anywhere else in the country - no Bahamian in the Family Islands, or anywhere else outside of the City of Nassau, but non-Bahamians do.”

MP Moss said when the RPT expires only foreigners will have to pay the tax. “It does not expire for Bahamians  because the other clause in the HCA kicks in, and it says that tax exemption under this agreement Clause 2. 27, you cannot charge in the Port area unless you charge it to everybody in the country.  So the only the way to charge RPT to Bahamians in the City of Freeport is to charge it on Bahamians throughout the entire Commonwealth.”

But Mr Moss said that it is not so for non-Bahamians, who pay real property tax everywhere in the Bahamas.

“And so that is why I say it is a lie when the Port Authority chairman went around saying they are renegotiating this tax exemption; they were not negotiating it for Bahamians.

Mr Moss claims that they were really negotiating the extension for themselves and major foreign investors in Grand Bahama.

“GB DEVCO which owns 70,00 acres of land is a Port Authority company, the harbour, container port, Buckeye -BORCO,  Polymers, and the Power Company -  if we allow this tax exemption to expire all of those will now start paying taxes, not Bahamians, “ said Mr Moss.

“And so the starting point for any responsible government is to determine what the value is of what we are being asked by not letting this tax apply to non-Bahamians.

Assuming that the industrial companies in Grand Bahama are worth $5 billion, Mr Moss said that the one per cent real property tax would be $50 million per year.   

“DEVCO owns 70,000 acres of land, and if you assume it is worth $25,000 per acre, that still comes up to some $1.7 billion roughly, and their tax would be $17 million per year.

“And so, for us to be talking about giving a tax extension two things come to mind: 1. it is not for us, it is for foreigners;  and 2. why in the world would be do that.”

Referring to Value Added Tax, Mr Moss said: “We just put a tax on Bahamians, the weakest and  poorest Bahamians in the country, on our own people, and we are talking about a tax break for non-Bahamians in the City of Freeport, why would we do that?” 

Mr Moss believes that this is a single opportunity for Bahamians to finally have a source of revenue for proper local government in Grand Bahama.  

“I am not talking about these funny local governments we have now, I am talking about a real municipal government elected by its own people,” he said.  

The attorney said that the Port Authority sold off four of its main sources of revenue – electricity, cable, telephone, sanitation services, except water, service charges and Business Licence fees.

“The PA does not have the money to run the City of Freeport because they sold off  the four main resources of revenue and took the money out and pocketed the money, and they have only three remaining sources of revenue which has resulted in increase business license, service charge, water for Bahamians. And so the question is why should we give them a tax break, when there is something better we can be doing with that money.”

Mr Moss said the money should not go to Central government either, but used strictly in Grand Bahama.

“I spoke to the committee that the PM appointed and said, ‘why in the world would any responsible government want to extend the colonialism in Freeport for another 30 years?’  We are the only place in the entire Commonwealth that is not independent, we would like to say we are, but the City of Freeport truly is not because we do not elect our government in Freeport.”