By KHRISNA RUSSELL
Deputy Chief Reporter
DAYS after the Minnis administration agreed to halt new web shop taxes after gaming house operators sued the government, Finance Minister Peter Turnquest blamed the former Christie administration for issues the government now faces with the industry and their increased taxes.
Mr Turnquest insisted it was the Christie administration that spent recklessly and went against the overwhelming rejection from Bahamians to the legalisation of web shops.
This decision, he said yesterday, resulted in a handful of “handpicked favoured operators” to be granted licences without considering what that would mean for the industry and the country.
Bahamians voted against legalising numbers houses and creating a national lottery in 2013, but the following year the majority of Members of Parliament voted in favour of the Gaming Act, thus regulating web shops.
On Friday, the government agreed to halt a new sliding tax and the five percent stamp tax on web shop patrons. It came after gaming operators filed an application in the Supreme Court seeking judicial review of the taxes. Both are pending a court hearing on October 5. It is unclear how this development will affect government revenue projections.
“It was his administration’s reckless spending that put the country in the position where value added tax and other tax increases are necessary to begin correcting many of the disastrous programmes and policies that got us here and continues to pose risk to fiscal consolidation and stability of the public finances,” Mr Turnquest told The Tribune yesterday.
“It was his administration that went against the overwhelming wishes of and disrespected the vote of the Bahamian people with respect to gaming, and doubled down on that disrespect by choosing a handful of handpicked, favoured operators to be granted licences without considering what that would mean for the industry and the country.
“It was his administration that failed to put in place the safeguards and monitoring programmes to protect gamers as well as communities from the negative effects of the activity and it was his administration that failed to budget adequate financial resources to fill the gap in Family Island communities when these operators repatriate their profits to Nassau or elsewhere.”
Yesterday, Mr Davis blamed the government for not listening to the concerns of numbers bosses. He said the same could not be said for the treatment of Lyford Cay residents as the government agreed not to increase taxes for them, referring to a property tax issue.
In response the deputy prime minister said: “The government did not respond to Lyford Cay exclusively. As I have said over and repeatedly, this issue was first brought to my attention by a real estate agent in Abaco, where second home ownership is a significant part of the economy. Once it was raised, we quickly realised we had not contemplated that the residences that did not meet the six month requirement as per the amendment would automatically be considered commercial and thus not eligible for the real property tax cap which was not intended to be changed. You might recall that it was the previous administration that instituted this cap and thus their criticism rings hollow.”
On Friday morning, attorneys Wayne Munroe and Alfred Sears, representing several web shops, appeared before Supreme Court Justice Indra Charles where they sought an injunction to block the patron tax, which was to come into effect on Saturday. One of the applications also extended to the sliding scale, which came into force on July 1.
Speaking following the court appearance, Attorney General Carl Bethel said this issue had more to do with the process by which the tax is implemented.
“The court itself was unable to proceed with a full hearing and we (the Attorney General’s Office) were certainly not in a position having only been served late yesterday (Thursday) evening to intelligently oppose the application for leave to bring judicial review proceedings,” Mr Bethel told reporters. “We intend to oppose the application should it come to that.
“And so the court has set the fifth of October as the date for that hearing. In the meanwhile we have been urged to have further discussions with the applicants to see if we can narrow any areas of dispute and we’ll do so.
“No injunction has been issued, but out of respect for the court and the difficulty the court was in, that the court could not intelligently and in a fair judicious way have dealt with a matter on the basis of such urgency, we have agreed that there would be an undertaking that the tax wouldn’t be imposed pending the hearing on the fifth of October. That is a courtesy that we extended to colleagues opposite also to the courts so that the court is able to effectively perform its function, bearing in mind that it would be unwise to defend your right of way at your peril when the court is not comfortable and then the court will make a ruling that you may not be comfortable with rather than to have a ruling and rather than to have any injunction, we deemed it to be in the highest standards of judicial conduct and the conduct of council to grant an accommodation to allow the court to have the comfort of fully considering all of our arguments. So the court is able to make the best decision for the Bahamian people in these circumstance.”
He continued: “So we have agreed on a date to come back, pending that date, we’ve agreed that the tax would not be imposed so that the court would not feel any pressure in terms of reaching a fair verdict on these issues. The important issues are the policy and they ought to be properly ventilated.”
In the meantime, all parties have been urged to have further discussions to see if any of the disputes can be narrowed, Mr Bethel said.
“If we do not have an agreement that brings an end to the litigation then we will fight the litigation on its merits and seek to prevent the judicial review from being commenced by court order. If that should fail then the 23-26 (of October) are the dates adjourned for the fighting of the full judicial review application.”
Meanwhile, Mr Munroe has said because his clients are questioning the taxes, it is the right thing to have them set down.
He said: “To be clear the position of the Attorney Ggeneral is that we are wrong but a court would have to say whether he is right or we are right, but in the meantime it would not be fair to move on with things. The example is if you are supposed to hang and I say you shouldn’t hang but while you work you can’t go ahead and execute the person.”