By YOURI KEMP
Tribune Business Reporter
Bahamian gas station operators yesterday said they have received no answer from the government despite “crying out for assistance” on improved profit margins and a lower tax burden.
Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-chairman, and owner/operator of Esso’s East Street South and Soldier Road location, told Tribune Business that the current formula of taxing gas stations on their gross profits “doesn’t make any sense”.
He said: “We need to restructure the formula, and we need to sit down as business partners because we are basically partners with the government. We provide an essential good for the economy, so let’s sit down and find out what’s the best option for all and sundry so we can avoid any type of lay-offs.”
Petroleum dealers in the past have asked for up to a 50 percent margin increase to enable them to remain open after the COVID-19 restrictions end. The last time retail margins were increased was under the last Ingraham administration more than nine years ago, when the request for a 20 percent rise was met with a 15 percent hike.
The government currently earns nearly $2 out of every $5 gallon that is pumped. Wholesale margins are fixed at 33 cents per gallon while retailers get 54 cents, as both are price controlled. Yet petroleum dealers argue that these margins are unsustainable over the long term if the sector is to remain viable and grow.
Mr Bastian said: “Businesses are in this to make a profit, and if they are not making a profit then they are going to start to reduce their costs. National Insurance has gone up, VAT has been implemented, minimum wage has been implemented, as well as the cost of electricity has gone up despite us having some relief over the last two months.”
He added that gas station dealers want to switch to paying taxes on net profits as opposed to the Business Licence that is levied on the gross profit. “We have written to the government several times and we haven’t gotten any type of response from the government,” Mr Bastian said.