The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government had suggested that 14 Freeport-based companies were engaged in “a fishing expedition” in their challenge to new and increased taxation, describing their interrogation demands as “oppressive” and “intrusive”.

In submissions for yesterday’s Supreme Court hearing over the 2013-2014 Budget’s tax reform package, attorneys for the Government had called for the private sector’s demands for disclosure, and to serve questionnaires on key ministers and officials, to be denied.

It had also urged the Supreme Court to deny the 14 companies’ application for a split trial, but the hearing before Justice Petra Hanna-Weekes decided that the case should proceed down this route.

It was also decided that in return for the private sector ‘holding off’ on serving the “interrogatory” questions on the Government and Grand Bahama Port Authority (GBPA), the two defendants would provide full disclosure within 21 days.

This was not the Government’s original position, as the submissions by Gary Francis, an attorney from the Attorney General’s Office, argued: “The interrogatories are oppressive, excessive, irrelevant, intrusive, unnecessary, burdensome and too overreaching to these proceedings. Nothing turns on these interrogatories in resolving the issues before the court.”

The action, which was filed in early May 2014, is challenging the 1 per cent Customs processing fee and Environmental Levy that were imposed as part of the tax reform package introduced in the 2013-2014 Budget.

The 14 companies, all GBPA licensees, are alleging that these two taxes violate their legal rights under the Hawksbill Creek Agreement to import goods into Freeport without paying any duties or taxes.

And, using the same grounds, they are also arguing that simultaneous amendments to the Stamp Act violate GBPA licensees’ rights to transfer money, including profits and dividends, outside the Bahamas without being hit with taxes.

Subsequent pronouncements from both the Government and GBPA suggested that the 1 per cent Customs processing fee, which was capped at a maximum $500 per shipment, had been ‘rolled back’ to a flat $10 sum.

However, Mr Smith’s clients argued in September 9, 2015, submissions to the Supreme Court that it “remains unclear” whether the roll-back had been “approved and/or implemented by Parliament”.

They added that the “content and outcome” of discussions between the Government and GBPA on the issue “were and remain unclear”, especially whether the roll-back applied to all 3,500 of the latter’s licensees or just the major industrial companies.

Among the questions that the 14 companies were seeking answers to were the nature of the discussions between the GBPA and the Government; whether the taxes paid for the 1 per cent processing fee could be recovered; and if the monies raised by the Environmental Levy were employed for environmental purposes.

The questions also dealt with whether the new and increased taxes were waived, repealed or not enforced; and if the funds raised were used to cover the cost of providing a specific service.

Still, the Government’s submissions yesterday argued: “The plaintiff is attempting to place the burden on the respondents to do all the heavy lifting while they go on a fishing expedition.

“The defendants strongly contend that all the issues in this matter can be adequately dealt with together, and that there is no need for separate trials. This would only serve to unnecessarily complicate the issues and prolong resolution of this matter.

“The plaintiff should place all its cards on the table and allow the court to hear all the issues at once.”