By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Economic Recovery Committee's co-chair yesterday said the proposed work/study visa was "never intended to be a needle mover" that would replace lost multi-billion tourism earnings.
Marlon Johnson, who is also the Ministry of Finance's acting financial secretary, told Tribune Business that the visa plan was put forward as an advance recommendation because it was "time sensitive" given the need to put enabling infrastructure in place prior to The Bahamas' borders re-opening to international commercial travel.
Speaking after Rupert Pinder, an economist who lectures at the University of The Bahamas, told a webinar earlier this week that the work/study visa's projected impact was likely to pale when set against $1bn-$2bn in lost tourism earnings, Mr Johnson retorted: "We're not inclined to get into public debate on the merits of any particular recommendation.
"That recommendation was put forward because it is time sensitive, and we wanted the Government to review it so that if it was accepted the enabling infrastructure could be put in place for the substantial re-opening of the tourism sector.
"It wasn't put there by any means to jump start the tourism sector or as a replacement for lost income," he continued. "It was accelerated because of the time sensitivities with it. That's what the group responsible for the implementation is seeking to do: Get it sorted so by the time we get to a full re-opening of the economy it will be in place.
"It was not intended to be a needle mover. A good start would be if we were able to get 1,000 applicants spending $30,000 each. That would be a $30m boost for the economy. It's a nice value-added, and if it proves to be a successful programme then obviously it's something the Government could elect to keep in place to provide longer says for persons who want to come in."
Mr Johnson said the Immigration Department, and the Ministry of Financial Services, Trade and Industry and Immigration, were the primary agencies charged with implementing the necessary infrastructure and digital systems to make the application process work and deliver on The Bahamas' promises.
"It will be a fully online process," he added, saying reports suggested everything "will be launched in time for the full opening of the tourism sector". The Ministry of Tourism will be involved in marketing and promoting the work/study visa, with one spin-off goal being to "showcase" the Family Islands and show The Bahamas is more than just Nassau.
Another objective is to encourage those who obtain the year-long work/study visa to put down more permanent roots in The Bahamas, especially if they establish or seek to bring with them operating businesses. The University of The Bahamas is also involved in providing work facilities for students at overseas colleges and universities who wish to study from here.
"We're at arm's length," Mr Johnson said, "but we know anecdotally that once we pushed the visa out into the social media space, and the Ministry of Tourism started to talk to their folks, there's been some interest generated. We feel confident this will bear some fruit. We feel that once the marketing starts in earnest we will gain good traction."
The Bahamas’ Extended Stay Visa Programme is targeted at persons wishing to work or study from this nation for a year as part of wider COVID-19 economic recovery strategy. It represents an extension of The Bahamas’ existing annual residency permit, with the aim being to make the application and approval process much simpler, quicker and efficient.
Foreign workers and students who qualify for the permit will NOT be allowed to participate in the domestic economy as a condition of its granting. Students must be registered with, and studying online, at a foreign university, while workers must be employed - and paid by - an overseas company.
Such restrictions are designed to reassure Bahamians that local jobs will be protected, especially with an unemployment rate approaching 50 percent due to COVID-19. The visa is effectively aiming to attract a different type of visitor, with the hope that ultimately these persons - and their employers - re-domicile to The Bahamas permanently rather than just providing a short-term post-COVID boost.
However, Mr Pinder this week argued that the planned visa will come nowhere near to compensating for the "huge economic hit" delivered by the pandemic.
"When I look at it in the context of the Economic Recovery Committee, where I have a challenge with that is we're going to lose roughly between $1.7bn and $2bn in tourism receipts because of the COVID-19 pandemic. That's a huge hit with respect to the economy," he argued.
"This work visa, with respect to the preliminary numbers put up, with 1,000 people spending $30,000 each for $30m, that is not a needle mover in terms of what we're dealing with in disruption to the economy. It's not a needle mover.
"For me, the short to medium-term is how we re-open the economy in a safe and responsible manner. Diversification is medium to long-term. The problem I have with the work visa is this is not a needle mover with respect to then share of the economy we've lost to lockdowns and the pandemic. It's not a needle mover in terms of where we're at, and what sort of revenue we need to make up for."
Comments
Jim 3 years, 7 months ago
Americans are still taking Bahamian positions at some some marina resorts, work permit or not, (Bimini), grossly unfair to Bahamians. Apparently depends on politics and money.
C2B 3 years, 7 months ago
I am eagerly awaiting this program and will be among the first to apply. As a former Bahamian resident, the opportunity to move my software company to a more tax beneficial environment as beautiful as The Bahamas, is very attractive. Barbados is too isolated, lacks the constant airlift to the US, and is in the process of shedding it's ties to the British Commonwealth; which most investors see as a stable legal environment. Unlike Americans, Canadians and Brits pay no taxes on income earned abroad and I encourage the Committee to include them in their target marketing. These people are not looking to pay no taxes; just less taxes. A 5% capital gains tax and 2% on overall income would be nothing to people like me, accustomed to paying 50%+ effective tax rates. So with respect to Mr. Pinder, I encourage him to do a complete analysis and remember not to make perfection the enemy of positive action. For what it's worth, I will spend multiples of the 30k per year being bantered about in these articles. I would like to tell you that I will immediately employ Bahamian programmers, but this may require training and development on my part and this will take me time. What I can tell you is this; I will give more than I take and if you meet us in the middle, tech entrepreneurs can be part of the solution.
trueBahamian 3 years, 7 months ago
This is interesting. I assume you arevawarebifnchallenges with BPL. I'm not sure if the internet capabilities here are on par with what you are used to. Nut, the cost would be much higher than in first world locations.
Although, you my be excited about this opportunity, are there hoards of others who are? Let's think for a second, the tax opportunities have always been on the table. If this was such a grand idea, would we need to whisper in the ear of the world to show up here? Think about it, we have lots of foreign investors in this country. Tax breaks by itself won't result in businesses coming here. You are looking at this point in isolation. From a business perspective, you don't open a business for one or two customers unless they are extremely large. So, unless you're one of the big silicon valley size companies, you can't put a dent in the process.
To clarify, I'm not writing as an attack to you, it's just that if we look at the picture at the macro level, the government really didn't do anything here.
C2B 3 years, 7 months ago
Yes I am keenly aware of the issues with the Island infrastructure and all it's shortcomings. I would not install a mission critical server system or data storage facility. Last business I sold cost me 7 figures in tax; erasing any cost advantage I may have enjoyed in one fell swoop. Although the tax advantages have always been there, the digital economy has advanced markedly and what used to be in the realm of bankers, is readily available to all. trueBahamian, I have been on Zoom, Teams, and facetime with my clients since January and it seems they are ok with that. This is the big macro change and the time is now for people like me to act. The Bahamas needs to communicate this to all because it's competitors have been doing this all along. If you study the "Irish Miracle", it was really just a massive tax reduction by an EU economy that attracted Apple, among others. GE has a taxation dept with 900 people in it looking for domiciles to reduce overall taxes. What I am telling you is that in a market for low tax domiciles and The Bahamas can be more a winner in this arena. If data is the new currency, then tech companies are the new bankers. And we don't argue about the benefit of the international banking system for The Bahamas. Do not underestimate the changes this pandemic has brought to the global economy; they are profound. No one is starting a business; I am moving my existing business. To be clear, I am going to sell and market my product from a Bahamian base with my development team remaining where they are. My clients are all large multinationals with billion dollar brands and they were playing this game before it was cool. The Bahamas is a small economy so big picture and macro level are really in the eye of the beholder. In my lifetime I saw Atlantis change the trajectory of the economy as will Bahamar (hopefully). The government is trying something and should be commended as all I usually hear is that they do nothing.
thps 3 years, 7 months ago
Have you considered the existing Commercial Enterprises Act if you wanted to move here?
www.lawyerlex.com/work-and-resident-p...
www.delaneypartners.com/2018/03/fast-...
C2B 3 years, 7 months ago
I will study it. The last time I considered opening in Nassau, there were many reports and paperwork to file, waiting periods, foreign ownership restrictions, many consultants to hire. It all seemed onerous. It's the pandemic that had cleared the final hurdles for me because my clients are willing to accept remitting payments and maybe even visitingThe Bahamas in a business trip. Thank you for the advice.
trueBahamian 3 years, 7 months ago
Well, like the old saying goes "time will tell". It just seems illogical that we have a great big idea here when we have a.public education system that's I'm the toilet.
To.huild a strong natio. You have to provide your people with the tools to compete in the global environment. It's interesting you touched on the banking industry. If you are up to speed the offshore sector is a fraction nbn of what it used to be. In years to come, it will be just shadows.
Keep.in mind this is the same country that has a very low ranking in the ease of doing business. The last ranking I saw, we were behind the West Bank. There are a lot of foreign investors complaining about the state of affairs here. The issues here are not fairytales. A lot of things need to be fixed. I love my country and I hate to see that we're not reaching our true potential. It's an intellectual graveyard.
ThisIsOurs 3 years, 7 months ago
"with my development team remaining where they are."
I don't see how this held with hiring Bahamians...it's basically a paper company
trueBahamian 3 years, 7 months ago
So, the long and short of Mr. Johnson's article here is that the Economic Recovery Committee didn't bring anything to the table.
So, once again we have a bunch of useless people sitting around the table wasting taxpayer money. Mr. JZohnsom is a complete idiot. He presented this idea as some great thing a couple of months ago. Now, he backpedaled when it's pointed out that he is a giant dumbass.
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