By NEIL HARTNELL
Tribune Business Editor
The Government was yesterday urged to avoid a "rushed, emotional" Over-the-Hill revitalisation in favour of developing a "sustainable blueprint" that can be rolled-out across The Bahamas.
Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business it was critical to determine whether revitalisation will be driven by existing businesses in the area or through attracting new economic activity in from outside.
Raising questions over whether existing businesses and residents in the Bain Town, Grants Town and Centreville areas have the ability to access the Business Licence and real property tax breaks proposed, Mr Bowe also called on the Government to employ key performance indicators (KPIs) to measure the initiative's impact in real terms.
"It's important to determine how we're going about this; how we approach this," he told Tribune Business. "Is it a drive to bring new investment and opportunities into Over-the-Hill, so that we drive a migration from the malls and western district in terms of where commercial activity is?
"If that's the case, who's the target of the tax concessions? Is it to enhance the ability of the existing population to expand or bring new business in?"
Several observers, including the Government's political opponents, were expressing concern - even before the May 10 general election - that Dr Hubert Minnis's Economic Empowerment Zone plan for reviving Over-the-Hill could lead to a "gentrification" of the area.
The fear is that existing businesses and residents could be 'pushed out', and displaced, by an influx of outsiders - wealthier companies, property developers and individuals - who are better-placed to access the 'tax breaks' the Government is offering.
The Minnis administration is seeking to prevent this through the use of 'Trade Certificates' and an electronic 'E-Card' that will ensure the concessions can only be accessed by persons and businesses within the zone, thereby eliminating the potential for fraud and tax evasion.
Mr Bowe also expressed concern over whether existing businesses and residents "have the wherewithal to take advantage of these tax concessions being offered".
The Government's own 'White Paper' reveals that around two-thirds of businesses in the Bain Town and Grant's Town areas are retail in nature, indicating that a significant proportion are likely 'Mom and Pop' stores with turnover levels likely to mean Business Licence fee waivers have minimal impact.
Mr Bowe, meanwhile, said the Economic Empowerment Zone concept was typically used to attract new businesses into run-down and deprived communities, where their capital investment would "jump" start economic activity, create jobs and improve infrastructure, and result in a "trickle down" effect to existing residents.
He suggested that, based on the White Paper, the Over-the-Hill initiative as currently structured would benefit those with capital and the ability to access it, and not necessarily existing residents and companies.
The BICA president said he preferred a 'hybrid' solution, where companies from outside Over-the-Hill partnered with current businesses and residents to create new economic opportunities. This, he added, would prevent "tax arbitrage" and inject new capital, while those in the community needed to bring marketing and local knowledge to the table.
"What we don't want is a rushed revitalisation, tax concessions and tax plan because this ultimately should be the blueprint for all communities we want to be revived,'" Mr Bowe told Tribune Business.
"It has to be a sustainable initiative, where we can see the metrics and social benefits coming through so we can replicate it. If we're doing it for emotional reasons, responding primarily to the cries of those in these communities for something to happen, while it may it give us a warm feeling it will not be sustainable."