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Increased Web Shop Taxes Not Ruled Out

Deputy Prime Minister K Peter Turnquest.

Deputy Prime Minister K Peter Turnquest.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Deputy Prime Minister has not ruled out new or increased taxes for web shops, saying the Government had to consider sector integrity as well as revenues.

K P Turnquest, in a recent Tribune Business interview, said he did not “want to get ahead of Cabinet” when asked whether the Government planned to act on the gaming minister’s suggestion that numbers houses be subjected to new and/or increased taxation. “It’s too early for me to comment on that,” he told this newspaper. “I don’t want to get ahead of Cabinet with respect to that, but as he’s [Dionisio D’Aguilar] indicated we have to consider all these possibilities - not only revenue sources, but how we can ensure we protect the system against potential abuse.”

The Gaming House Operators Association, and its members, reacted angrily to Mr D’Aguilar’s concerns and criticisms of their industry, especially his suggestion that it be made to pay new or increased taxation given the anti-social effects of gambling. Individual operators, speaking on condition of anonymity, subsequently argued to Tribune Business that they were among the most heavily taxed and regulated sectors of the Bahamian economy, and increasing this burden would simply be unfair.

Gaming house operators are currently required to pay 11 per cent of their taxable revenue or 25 per cent of earnings before interest, taxes, depreciation and amortisation (EBITDA), depending on which one is greater.

They also pay 2 per cent of their revenues to charitable causes and entities, which generated the Association’s argument last week that its effective tax rate is 13 per cent, when hotel-based casinos pay just 5 per cent.

Mr Turnquest’s response, though, indicates that the issue of web shop taxation remains a key issue for Cabinet debate. And concerns are being raised ever-more frequently about gambling’s negative impact - especially in poor Family Island communities.

An Exuma businessman, and member of Prime Minister Dr Hubert Minnis’s Economic Advisory Council, yesterday told Tribune Business that numbers houses were “Robin Hood in reverse” by taking from the poor to enrich the small number of owners (see column on Page 3B).

Kenneth ‘KB’ Bowe, the founder/owner of the Chat ‘N’ Chill beach bar on Exuma’s Stocking Island, said the saturation of many Bahamian islands by web shops was “wreaking​ ​havoc​ ​and​ ​breaking​ ​down​ ​the​ ​social​ ​fabric​ ​of​ ​marginalised​ ​communities​“.

A Master’s graduate from the University of Chicago’s School of Business and School of Economics, he added that commercial bank withdrawal from many Family Islands had led to numbers houses “sucking​ ​up​ ​the​ ​limited​ ​savings​ ​and​ ​funds​“ ​from​ ​hard-pressed Bahamian​ ​communities​.

Mr Bowe said the Christie administration’s decision to legalise web shop gaming had created “a new class of oligarchs”, while the banking sector’s Out Island retreat acted as a further disincentive in attracting foreign direct investment.

He urged the Government to “democratise” gambling by establishing a National Lottery separate from the web shop industry - an initiative that Mr D’Aguilar last week told Tribune Business was “front and centre” in his thinking.

“We are going in the opposite direction to where we should be going,” Mr Bowe told Tribune Business in an interview yesterday. “Only a few people are making money, it’s destroyed the banking system and if we let the system go on with banks pulling out of all the islands.....

“I live in Exuma, and can tell you there are people concerned about whether they will stay if the banks pull out. The web shops have been taking the juice out of the banking system in terms of deposits, and everything goes through them.”

Mr Bowe said his own business would suffer if commercial banks exited Exuma, as they have done on other Family Islands, given that half his business comes through credit cards.

Warning that foreign and Bahamian investors would not undertake projects on islands with no commercial bank presence, he added: “Why should I, as an investor, want to come if I can’t pay my own people by bank transfer or cheque. I have to pay cash, and am at risk of getting robbed.”

Mr Bowe argued that the Government’s best strategy for controlling the web shop industry’s growth was to effectively ‘take it on at its own game’ by starting a National Lottery, as the turnover generated by the sector showed both could survive.

“I would democratise it, sell it [the National Lottery] at ‘Mom and Pop’ stores and gas stations,” he explained. “We could use the money for sport. It would not leave the system and end up in one set of hands. At the moment, we are just creating mini-oligarchs.”

Echoing those concerned about the negative aspects of web shop gaming, Mr Bowe said its impact was visible throughout the island.

“The web shops are everywhere, even in Exuma,” he told Tribune Business. “I’m afraid. This is a dire situation we have now. There are people who come up to me and want me to give them money as they’ve already spent the grocery money.

“It has me scared. All I need is someone to hold me up for money. The young boys don’t want to work. If you take a picture of the web shops in Exuma, you will see they’re open on Sunday. It’s amazing; everyone goes to the web shops before they have breakfast at around 6am.”

Mr Bowe also accused web shops of effectively preying on lower income Bahamians, and their desire to “live the dream”. He explained: “Our national grade average is a ‘D-’. The lower the level of education, the more people believe in the superficial and that they can win something.

“If you look at Nassau, the web shops are all over Over-the-Hill, where you have people.”

Comments

TalRussell 4 years ago

Comrades! Remember this important point. Wasn't KP, the PM's very first cabinet appointment?
Now I thinks I does get it. Dionisio, only got's elevated to cabinet, not due any special liking PM Minnis, might have for him, but it was the forces of KP, who used his influence with the PM, to move Dionisio on up to look after what has done been determined is to be done with the Numbers Licenses. Am I right?

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birdiestrachan 4 years ago

The web shop men. Their only sin is the colour of their skins. Watch the new immigration act $250,000. and they own the place.

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Sickened 4 years ago

You saying black people don't want to see other black people become successful?

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Well_mudda_take_sic 4 years ago

Repost: The corrupt racketeering thug Sebas Bastian of Island Luck has given cushy appointments to many shamelessly greedy former senior regulators for the purpose of "buying" influence in the regulatory bodies responsible for issuing permits and licenses to one or more of his de facto criminal enterprises. Scumbag Bastian, through hirings, the giving of directorships and granting of lucrative consultancy arrangements, has now retained the services of all of the following soul-less former senior regulators who unconscionably have peddled and continue to pedal their influence with unscrupulous regulators and politicians on Bastian's behalf:

  • Julian Francis - former governor of the Central Bank
  • Hilliary Deveaux - former head of the Securities Commission
  • Alfred Sears - former Attorney General and Minister of Education
  • Terah Rahming - until very recently chairman of the Gaming Board

And it should be noted that Bastian has retained Ed Fields as a director of BMG, the holding company for his various investment, construction, real estate and other operating enterprises that include an insurance company. And it just so happens the spouse of Ed Fields is none other than Michele Fields-Turnquest who is the Insurance Commissioner responsible for licensing and overseeing the activities of insurers. No doubt there are many other similar very unseemly relationships that low-life Bastian has effectively "bought" for the purpose of getting his way in every and any thing he chooses to do in order to grow his money laundering and other illegal activities. The same is no doubt true of Craig Flowers who controls the Flowers chain of wen shops. Something must be done to stop all of this nonsense!

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Sickened 4 years ago

Web shops and their owners are the scourge of our nation. Between them and the gangs we may be beyond salvation!

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John 4 years ago

Its like black and white...oops. The (white and foreign) casinos get taxed 5%. the Bahamians ( lil black boys from over the hill) gets taxed 13% plus some. A strange reason for crime wouldn't you say?

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Well_mudda_take_sic 4 years ago

To @John: Knowing that your bread is somehow being buttered by one or more of the corrupt racketeering numbers bosses, like Sebas Bastian or Craig Flowers, gives your voice absolutely no credibility whatsoever on anything to do with these sleazy low-life thugs and their de facto criminal enterprises engaged in money laundering and other illegal activities in the eyes of not only the vast majority of Bahamians but also the global financial community.

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JohnDoe 4 years ago

Similarly your irrational insistence on calling these guys criminal without any credible evidence also points to your bread being buttered undoubtedly by forces who believe 1% of the population should continue to control 90% of the wealth in this country.

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JohnDoe 4 years ago

By the way please explain how they are engaging in money laundering?

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Just_My_Say 4 years ago

Let me say from the outset that I don't support gabbling but I respect the wishes of those who do as we live in a free society. I am not in support of depressing the success of any Bahamian (white or black) doing business in The Bahamas but I have a major concern with web shops in The Bahamas. Here is why: 1. Casinos vs Web shop gaming: Gaming at Atlantis and other hotel casinos, vs our we shops is like night and day. Our web shops suck money from poor Bahamians while these casinos target foreign monies from tourist. Compare a daily take-in of $1,000,000 by our web shop owners vs $100,000,000 per day by Atlantis. The web shops sucks $1,000,000 hard cash from 1000s of poor Bahamians and a few benefits. In the case of Atlantis, the cash intake from 1000s of tourists has a different impact with tax paid but little to no negative impact on the economy.
2. Taxes on Web shops vs Casinos like Atlantis: My view is that the taxes levied on the web shops must take into consideration the moral, social, complex physiological issues that results from sucking hard earned monies from poor Bahamians. In addition, it should also consider the impact on the local economy - especially on local businesses that have lost business due to the diversion of cash to the web shops 3. Proliferation of Web Shops in The Bahamas: If you ever visited Las Vegas, slot machines are everywhere (airport, restaurants, stores etc. The only good thing about gaming in Las Vegas is that there is an escape. Whether you drove to Las Vegas from one of the other 40 states, or flew from The Bahamas, once you have finished your trip or get broke you can leave. Compare gaming in Las Vegas verse The Bahamas. There is no escape. Web shops are everywhere- some within walking distance from homes, schools and. What is really disheartening is that with the allowance of the proliferation of web shops in the family island the government has in effect converted the entire Bahamas into a "Las Vegas" but with no escape. Gaming should not be allowed in the family islands at this time and the government should seek to minimize and control the proliferation of gaming. 4. Gaming is a Decease: Gaming is now legal in the Bahamas - to late. But appropriate taxes are in order. We must also recognize web shop gabbling in The Bahamas for what it is. It is a dangerous decease, a dangerous spirit. Like smoking cigarettes, taking drugs or drinking alcohol, the government, and local businesses must join in, to create education campaigns targeting gabbling specifically. We need posters at the roundabouts, and keep spots through the entire Bahamas, educating Bahamians, like in the case of smoking and drinking, that gabbling is dangerous for your family and health. we need television, radio, newspaper and social media promotions and advertising to educate Bahamians on how to gabble with caution or not at all.

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