The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The web shop industry yesterday mounted an astonishing personal attack on the Organisation for Responsible Governance's (ORG) principal for suggesting the sector face increased taxation.

The Bahamas Gaming Operators Association (BGOA), in a written statement, blasted Robert Myers' comments to Tribune Business as "disparaging", arguing that it "already pays more than its fair share" with a 21 percent tax burden.

"We consider the comments attributed to Mr Myers, principal of the Organisation for Responsible Governance (ORG), with respect to the domestic gaming industry, to be very disparaging," the Association said, suggesting his call for increased taxes on their one sector alone was "discriminatory".

"The domestic gaming industry already pays more than its fair share of taxes at 11 percent or 25 percent of EBITDA (earnings before interest, taxation, depreciation or amortisation), whichever is greater, coupled with millions in fees for its locations, franchises, hiring of Bahamians and 7.5 percent in VAT on all its procurement of products and services, without being able to claim.

"As an aggregate percentage of taxes and fees, the domestic gaming industry pays in excess of 21 percent. Like any other industry, we welcome paying our fair share of any potential tax increases, provided other sectors are asked to do likewise... We cannot be summarily singled out and other similar progressive sectors be left untouched," the Association continued.

"We do welcome a broad-based, consultative dialogue on the current macro-economic model of The Bahamas in general, and the creation of a more fair and equitable tax policy, relative all business sectors, particularly the domestic gaming industry."

Mr Myers told Tribune Business on Tuesday that the web shop industry's "exceptionally high margins" left it able to bear increased taxation in today's 2018-2019 Budget. He also accused the sector of having "gotten away with murder" when the Christie administration proceeded to ignore the results of a referendum/opinion poll and legalise it anyway.

The ORG principal said the proceeds from increased web shop taxation should be used exclusively to finance education reforms, arguing that the 'D-' grade average and poor public education system graduation rates were a key impediment to greater economic growth and productivity.

The Gaming Operators Association, while backing the notion of increased education investment, said it was already heavily donating to this area. And it questioned whether Mr Myers was aware that ORG, his own organisation, had spoken to its chief executive, Gershan Major, earlier this month to discuss such initiatives.

"Mr Myers touts educational advancement, which we support and continue to do so to the tone of hundreds of thousands of dollars, through the various licensees' foundations and the industry's corporate and social responsibility programmes, like the $500,000 endowment to the University of the Bahamas over the next 10 years, just to name one," the Association added.

"It may be instructive for Mr Myers to establish his own foundation and actually follow our real investment model in supporting education in the Bahamas, and leave the posturing alone."

Governments worldwide, though, frequently target activities such as gaming, and products such as alcohol and cigarettes, with heavy taxation. This is due to both their addictive nature, with persons prepared to pay no matter how prices go, and the desire to levy so-called 'sin taxes' on industries seen as having a potential negative social impact.

The UK government, for instance, concerned about the proliferation of gaming houses and betting shops there, has launched a review of the sector's regulatory framework. It is especially concerned about fixed odds betting terminals (FOBT), which are seen as contributing to gambling addiction problems because of the high frequency with which bets are made.

Dionisio D'Aguilar, the minister of tourism responsible for gaming, has previously suggested that the web shop industry should be subjected to increased taxation - drawing a similar barbed response from the sector.

Meanwhile, the Bahamas Gaming Operators Association's (BGOA) response did not confine itself to the substance of Mr Myers' remarks. It introduced race into the debate, and sought to discredit the ORG chief by recalling his 2014 resignation as Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman.

Mr Myers stepped down over a valuation dispute with Customs over a vehicle he imported from the US, which resulted in him paying a small civil fine. The then-Customs comptroller, Charles Turner, said at the time that the agency "had no quarrel" with Mr Myers, and many observers at the time felt he had been 'set-up' by political operatives connected with the then-Christie government who were unhappy at his advocacy on the private sector's behalf over VAT. He stepped down to ensure there was no distraction from this work.

However, referring to Mr Myers' comments, the Association said it considered "getting away with murder" to be the "select few" that "have been part of the merchant class [and] have been price makers, and the masses of Bahamians have been the price takers".

Besides attempting to conjure up images of the 'Bay Street Boys', the Association then described the call for increased taxes as "a colour tax on the industry".

"It cannot continue to be a matter of economic profiling," it said. "We cannot continue to experience punitive increase in taxes based on the same colonial paradigm that suggests young, black wealth should have a different standard than other colour forms of wealth in this country, especially when the current economic model suggests that there ought not to be such wealth even attempted, much less achieved. What is good for the goose must be good for the gander."