By NEIL HARTNELL
Tribune Business Editor
Top Bahamian dive operators yesterday demanded that the Government stop issuing charter permits to any rival foreign vessel, due to the “miniscule” tax contributions and unfair competition they represent.
The Bahamas Diving Association’s (BDA) directors, in a March 16 letter that was copied to the Ministry of Tourism and Port Department chairman, said they were instead “aggressively encouraging” all dive operations to open in this nation.
This, they argued, would create a competitive ‘level playing field’ where all dive charter operators were paying the same Bahamian taxes, thereby eliminating the possibility for foreign rivals to undercut them via evading due payments to the Government.
The letter, written as a response to the missive by Captain W. Scott Smith, of the US-registered Dolphin Dream vessel, reminded him that foreign-owned vessels “do not have more rights” in this nation’s waters than their Bahamian counterparts.
The BDA document is signed by Neal Watson senior, its president; Brendal Stevens, its vice-president, from Brenda’s Abaco; Linda Osborne, its treasurer, from UNEXSO; Stuart Cove, of Stuart Cove’s; and Michael Sherratt, of Dive Time Abaco.
It is a direct response to Captain Smith’s letter, published in Tribune Business on Monday, in which he blamed his decision not to renew his Bahamas Diving Association (BDA) membership on “inflammatory and insulting” statements by its leadership regarding foreign charter vessel operators.
In their response, the BDA members said Captain Smith’s and the Dolphin Dream’s membership was not renewed for 2015 because the Association was not open to foreign-based vessels.
“Please be advised that the Bahamas is a sovereign nation, not a US territory, and foreign-owned and based businesses do not have more rights to operate a business in the Bahamas than a Bahamian citizen in his own country,” the BDA directors said.
“The Dolphin Dream, as well as other liveaboard dive boats that bring their customers to the Bahamas to utilise our natural resources, are businesses owned by foreigners and based in south Florida.
“These boats are US registered with all foreign crews, and operate as floating dive resorts, bringing their customers to the Bahamas, clearing Customs and Immigration and then operating as the hotel, restaurant, bar and full-service dive operation in direct competition with Bahamian businesses,” the BDA directors added.
“They talk about paying as much as 8 per cent of their gross sales to operate in the Bahamas, yet this is miniscule compared to what a Bahamian is required to pay to operate in his own country.”
The signed BDA letter said all its members “stand united strongly opposing the issuance of a Foreign Charter Boat permit to any foreign dive vessel that’s primary purpose for entering the Bahamas is to operate a dedicated dive business in direct competition with Bahamian hotels, restaurants, dive operations and other businesses”.
In other words, they are seeking a complete ban on any foreign-owned and based dive boat/operation entering the Bahamas.
The BDA and its members have long argued that foreign ‘liveaboards’ are largely evading the 4 per cent ‘Charter fee’ they should be paying on their gross revenues, plus the weekly $50 per diver fee.
This, they say, means such boats are contributing nothing to the Bahamian economy or the Government, while simultaneously taking revenues and jobs away from legitimate Bahamian operators by undercutting them on price.
Such concerns have also been exacerbated by the recent imposition of 7.5 per cent Value-Added Tax (VAT), which BDA members fear will also be evaded by foreign rivals - while they have to pay up.
This, though, was denied by Captain Smith, who wrote in his letter: “The fees and taxes we pay are mandatory and paid upon entrance to the Bahamas, with accurate records of our passenger count and dates in the Bahamas, unlike the vast majority of foreign charter boats in the Bahamas that fly people in and out of the Bahamas and enter the Bahamas as private vessels with no accurate accounting of their trips or number of people.
“We pay Custom clearance fees, $20 departure tax, 4 per cent gross sale tax, $50 per head scuba tax and our annual $1875 permit fee, all adding up to over 8 per cent of our gross sales. The Dolphin Dream pays over $50,000 a year to the Bahamas government, and I’m sure our gross sales are much less then Stuart Cove’s.”
However, the BDA directors said they were now pushing for all foreign dive operations to base themselves in the Bahamas, thus helping to enforce their compliance with local laws.
“If any other foreign dive operation would like to bring their dive boat to the Bahamas and surrender the US registration in order to duty pay the boat and all the equipment, Bahamian register the vessel, form a Bahamian corporation and obtain a Bahamian Business License, hire a Bahamian boat captain, hire a Bahamian crew or pay $4,000 per year for each foreign work permit, as well as pay 7.5 per cent VAT tax, National Insurance, in addition to all of the other expenses a Bahamian is required to pay, then the Bahamas Diving Association will welcome you and will assist you in any way we can to help you set up your Bahamian-based business,” the BDA directors said.
“Otherwise you are a foreign business operating at a financial advantage over Bahamian citizens trying to make a living in their own country.”
The BDA directors then added: “The Bahamas Diving Association has done extensive research and can find no other Caribbean destination that would allow a foreign business to operate in direct competition with local businesses without complying with the same laws and regulations that local citizens must comply with.
“If this situation were reversed and any one of our Bahamas Diving Association members took one of their Bahamian-registered dive boats with a Bahamian crew and a load of foreign divers to the US, cleared customs and immigration and relocated the boat to a marina and started running dive charters locally, the captain and crew would be arrested, incarcerated and deported. In addition, the vessel would more than likely be confiscated and sold at auction.
“Why do these foreign businesses feel they have a right to operate in the Bahamas without complying with the same laws a Bahamian citizen must comply with, and why aren’t the laws enforced against these foreign businesses by the Bahamian Government?”