By RASHAD ROLLE
Tribune Staff Reporter
DECLARING the Over-the-Hill programme noble and well-intentioned, Bahamas Institute of Chartered Accountants president Gowon Bowe said yesterday the verdict is out on whether its tax concessions component will prove “fit for purpose”.
Yesterday, The Tribune reported that not many residents in the Economic Empowerment Zone have sought to benefit from available concessions. In fact, only 17 have applied thus far. The concessions would allow them to bring in construction materials duty-free and be exempt from real property tax.
Mr Bowe said yesterday: “If you don’t have the resources to invest, concessions are not beneficial because you can only access them when you are actually being waived from costs you would normally incur when investing. So if I don’t have the capital to do the investment, the benefit of concessions doesn’t materialise.
“Look at a development like Baha Mar that got a lot of concessions. It had significant amount of capital coming in. Using that same example, say you’re trying to go into the inner-city, you still need persons with capital within that inner-city in order to take advantage of the concessions. The objective of stimulating economic activity in the area may not involve granting concessions but might involve activities to drive investment in the community that incentivises people outside the community to participate in the community.
“I understand the desire is not to allow persons who are already well off to take advantage of this programme but there has to be an element of not cutting your nose to spite your face for it to succeed.”
Government officials note the Over-the-Hill programme involves more than tax concessions, and aims to holistically transform the historically impoverished area.
Mr Bowe praised the government’s Small Business Development Centre programme, another one of the Minnis’s administration’s major initiatives, highlighting its structure and governance while noting it has attracted hundreds of interested applicants.
“The SBDC structure that is about ‘counseling’ small businesses is the key,” he said. “Funding is a challenge but most small businesses fail because they do not maintain proper accounting records, do budgets and business plans, have marketing strategies and the formal things that bigger business do. They don’t need the complexities of larger businesses but need the structure and formality.
“I believe the Bahamas Development Bank and Bahamas Venture Fund struggle with delinquencies because they promote the funding and not the mentoring. SBDC was set out to be an incubator and that is my optimism on its greater likelihood of success.”