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Web Shops Blast 'Disparaging' Call For Tax Increases

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."

Comments

Well_mudda_take_sic 2 years, 3 months ago

There is only one logical and politically sane option for Minnis and his other cabinet ministers when it comes to the racketeering and other illegal activities of the criminal enterprises run by the corrupt likes of Sebas Bastian and Craig Flowers: SHUT 'EM ALL DOWN AND CUT 'EM ALL OFF FROM OUR NATION'S BANKING SYSTEM. End of story.

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Porcupine 2 years, 3 months ago

Agreed. Now how do we make PM Minnis even address the issue. The people have no representation, while the rich have bought most every vote. Is there redress for this in the Bahamian constitution? Do we just write, or do we take to the streets demanding change? I have spent hours and hours writing on this issue in particular. Have they listened? It doesn't seem so. What about our democratic referendum on the issue? IGNORED! Now what?

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birdiestrachan 2 years, 3 months ago

Mr. Myers seems to be running the FNM Party. Web shops are owned by black people.

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Well_mudda_take_sic 2 years, 3 months ago

There you go again playing that tired old racism card. All you're doing is giving away your age. Younger Bahamians today (the under age 55 crowd) are not fooled by the evil ways in which elitist politicians manipulated our grand parents.

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BMW 2 years, 3 months ago

and they are laughing all the way to the bank with the money of black people. That way of thinking just don't cut it these days. Get your head out of the sand.

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birdiestrachan 2 years, 3 months ago

racism exist. you do not have to believe it. But it does not change the facts.

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DDK 2 years, 3 months ago

Obviously you believe it and promote it. For shame!

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ThisIsOurs 2 years, 3 months ago

What does "ONLINE gaming is exempt" mean?

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John 2 years, 3 months ago

We don't want to tax the foreign investors, we don't want to adequately tax the foreign visitors and gamblers, but we want to sock it (taxes) to Bahamians. Then we pretend to be shocked when they burden Bahamians down with additional taxes. and there is a budget deficit or additional borrowing is necessary..kml The Sebas/Island Luck train may be one that may soon wreck or run out of steam. #cashflow.

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Well_mudda_take_sic 2 years, 3 months ago

John, you and the member(s) of your family who are constantly singing to Sebas Bastian for your supper had better soon find a legal gravy train to get on instead. The illegal train you are currently on needs to be fully wrecked once and for all by a National Lottery that is not rigged like the spinning numbers games Bastian and Flowers use to royally rip off the more vulnerable in our society.

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birdiestrachan 2 years, 3 months ago

OBAN nor its foreign employees will pay VAT . What do the peoples time voters call that? The Bahamian workers who will earn less will have to pay. Where is the justice?

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sheeprunner12 2 years, 3 months ago

Webshops should not exist at all in The Bahamas ........... Period

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joeblow 2 years, 3 months ago

Numbers houses are the economic rapists of the Bahamas, an economic black-hole that only benefits a privileged few!

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pablojay 2 years, 3 months ago

This is addressed to "birdiestrachan", what would be your opinion of the web shops , which are financially decimating many island communities, have many Bahamians in worse shape than the crack epidemic and are raking in untold millions monthly, if they were owned by white people

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Gotoutintime 2 years, 3 months ago

Does anyone really believe that these dudes keep accurate records? I could crook-up a set of books so sorrowful it would make the tax people cry with pity for me!

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Well_mudda_take_sic 2 years, 3 months ago

They've got as many different sets of books for different purposes as my youngest daughter has pairs of shoes.....and my daughter really loves to buy shoes!

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The_Oracle 2 years, 3 months ago

With revenues exceeding $2bn (I will stand corrected if wrong) it would appear that the drain on the economy vs. VAT is doubled. (if their revenue projections are correct for 12%VAT) Funny who we want to castigate for our collective plight............ Notable also how their newfound legitimacy plays into their public presence and positioning. Tax 'em out of existence as far as I am concerned, have never and will never let them play with my money.

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Porcupine 2 years, 3 months ago

We (the people) agreed in voting that we don't want them. What should a people do? A robber is in your house late at night when you get home................... The government is no different.

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