The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE deputy prime minister yesterday pledged that Dorian-devastated Bahamians who “need help will get help” amid ongoing concerns that the mechanisms to provide continued access to tax breaks are not fully in place.

Chester Cooper reaffirmed to the House of Assembly that the Davis administration had brought the previous “umbrella” Special Economic Recovery Zone (SERZ) order and associated concessions to an end in a bid to “plug financial loopholes” that were allegedly being exploited by wealthy foreign homeowners and tax evaders.

However, Myles Laroda, his Cabinet colleague and minister of state in the Prime Minister’s Office, was later forced to clarify when and where application forms for Dorian-related tax breaks and other concessions are available following questioning from the Opposition’s east Grand Bahama MP, Kwasi Thompson.

The latter told the House of Assembly he had visited the Ministry of Grand Bahama on Tuesday to see if the necessary forms were available as promised, only to be told they had yet to be approved by the Ministry of Finance. Mr Thompson also complained that “there are no criteria, there are no parameters” on the type of tax breaks that could be obtained, and what supporting documents were required to access them.

Mr Laroda, addressing these concerns when the House resumed its afternoon sitting, said the relevant application forms were “now available” at the Ministry of Grand Bahama’s customer service desk and could also be accessed at the administrator’s office in High Rock from today.

He added that they “will also be available” at the Prime Minister’s Office in Abaco, but said he would have to consult Cabinet colleagues to determine if vehicles are still included among the products that can be imported VAT and duty-free with the necessary government approvals.

The row over the Government’s decision not to extend the “blanket” SERZ order beyond its December 1 expiry was sparked by Opposition leader Michael Pintard during his contribution to the debate on the Disaster Risk Management Bill. This prompted Mr Cooper to hit back: “Again the member is seeking once more to earn cheap political points in misleading the House.

“Yes, the SERZ Order ended, but it was made very clear that persons suffering as a result of Dorian can make applications and get assistance. The Government sought to plug financial loopholes..... I say for the record that any citizen in Grand Bahama, any citizen in Abaco, who has been disadvantaged with their property can still make an application to the Ministry of Grand Bahama, can still make an application to the Prime Minister’s Office in Abaco, and get relief.

“We will not provide relief to foreigners building second homes. We will not provide relief for persons who, for example, have insurance. We will ensure the Government’s revenues are collected, so that people in need will be supported, and we can build schools, roads and seawalls, but persons needing help will get help.”

He was backed by John Pinder, the central and south Abaco MP, who acknowledged that it “may have taken three years” for his constituents to “get back on their feet”. Encouraging those still in need of Dorian-related tax breaks to speed up and lower their rebuilding costs to apply as needed, he promised that their “case will be heard”.

However, the parliamentary secretary in the Ministry of Tourism, Investments and Aviation also argued that the previous “blanket” SERZ was being abused by those who did not need the tax breaks benefit and others who were exploiting the concessions for tax evasion and other illicit purposes.

“I saw investment houses,” Mr Pinder said. “There were owners of second homes building second and third homes, building homes twice as big. I’ve seen Bahamians with materials from Grand Bahama and Abaco, and sending them throughout the cays. It’s not what that Act was supposed to be. It was supposed to assist the rebuilding from the biggest natural disaster in our modern history.”

The Government indicated more than two months ago that it was seeking to move away from the “blanket” tax exemptions, granted in September 2019 in Dorian’s immediate aftermath, to a process where concessions will have to be applied for and approved on a case-by-case basis.

Michael Halkitis, minister of economic affairs, first signalled the Government’s new direction at the Abaco Business Outlook conference when he asserted that the present wide-ranging concessions regime was “not optimal” and cannot “go on for ever”, hinting it may switch to a framework where tax breaks were granted on a case-by-case application basis.

The Davis administration feels the existing SERZ is giving away too much revenue in tax breaks. It reimposed VAT on construction services earlier this year, with the Ministry of Finance stating at the time that concessions were being granted to wealthy second homeowners who did not need them to rebuild properties that were fully insured to their replacement value. Essentially, the view was such homeowners were getting VAT and duty-relief twice.

Ministry of Finance officials also subsequently said the SERZ and related tax breaks were being abused for tax evasion and other illicit purposes, with vehicles and other expensive items imported using the VAT and duty exemptions turning up at Potter’s Cay in Nassau and other locations outside the Dorian hit areas.

Mr Pinder’s comments prompted Mr Thompson to intervene and question whether the necessary mechanisms were in place to apply for Dorian-related tax breaks post-December 1. “I went to the Ministry of Grand Bahama at 1pm yesterday,” he said. “I went in there. I asked: ‘Are there any forms?’ The answer was no. The Ministry of Finance had not approved any forms. That was the answer provided to me.

“What was also said was if I had an already-stamped form, bring that stamped form and send a letter in.” The east Grand Bahama MP said the application forms, and process for accessing the concessions, was not in place contrary to the representations by Mr Cooper and Mr Pinder.

The deputy prime minister retorted that he had been assured that morning by Michael Halkitis, minister of economic affairs, that “the matter is in hand”. However, Mr Thompson stuck to his position, saying: “There are no forms. There are no criteria. There are no parameters on what can be asked for. For example, can cars be asked for? Building materials? Can we ask for any assistance for duty-free? There are no parameters, no system in place.”

Mr Laroda initially indicated that, given three years have passed since Hurricane Dorian, residents in Grand Bahama and Abaco have had sufficient time to apply for tax breaks. “Even if you didn’t have the money, the forms or applications for assistance should not take three years,” he added, asking: “Should we print 10,000 forms?”

The minister’s approach seemed to have altered, though, by the time the House of Assembly’s afternoon session started. Effectively admitting that the application forms had not been available when Mr Thompson called, Mr Laroda said 20 submissions for Dorian relief were stamped yesterday by the Ministry of Finance and will be sent back to the applicants tomorrow. Requests submitted now were likely to receive approval by early January.