The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance’s top official and a senior airline executive yesterday clashed over fears that Customs overtime fees will undermine The Bahamas’ ambitions to attract airlift “outside of peak hours”.

Elaine Foster, United Airlines’ general manager for Nassau, questioned during a Bahamas Hotel and Tourism Association (BHTA) Board of Directors meeting why her carrier and others should schedule flights outside regular 9am-5pm hours if it costs them more in payments to government agencies.

Disclosing that she and other airline executives have been arguing this issue “back and forth” with Simon Wilson, the financial secretary, she warned that if The Bahamas “doesn’t take a deep look at what we’re doing we’ll tax ourselves out of the market”.

Mr Wilson, in response, argued that airlines must “must pay their fair share” when it comes to the cost of government services, and added: “I can’t fund a billion dollar corporation”. He said previous efforts to address the issue via incentives had not proven successful and the Government has “moved on”.

The clash occurred after Vernice Walkine, the Nassau Airport Development Company’s (NAD) president and chief executive, told the meeting earlier that the start of direct service from the US west coast to New Providence by Jet Blue and Alaska Airlines “excites us because they will be coming in at off-peak times for both arrivals and departures”.

With both airlines arriving after 6pm when they launch those routes this winter, Ms Walkine said it will enable NAD to achieve “what we’ve wanted to do for a while” in terms of spreading out carrier arrivals and departures rather than having them all concentrated in the traditional 11am to 2m peak timeframe.

Ms Foster, following up on this point, argued: “Why should I bring in an aircraft outside peak periods if I have to pay more in terms of overtime?” She also expressed surprise that a previous system, where additional departure taxes were included in passenger ticket prices, and overtime “goes away”, had expired.

Outlining the Government’s position, Mr Wilson responded: “I don’t think there’s any confusion here on that point. That programme which was put in place several years ago has expired. That chapter is closed. That was a failed attempt by the Government to provide incentives. It was not successful. We have to move on.

“You say: ‘Why should I pay overtime?’ You pay overtime to US Customs and Border Protection. So why should [Bahamian] taxpayers subsidise the operations of airlines? US Customs and Border Protection pay overtime in The Bahamas. Why should Bahamas Customs and Immigration subsidise their operations?”

Ms Foster replied: “I think you’re missing the point, Mr Wilson.” She carried on despite the financial secretary’s attempts to intervene, adding: “Let me make it clear. We want more airlift here. To be clear we don’t pay overtime to US Customs and Border Protection. Let me make it clear: We want more airlift, and are asking for more airlift outside that peak period so we don’t have bottlenecks inside US Customs and Border Protection.

“The Bahamas wants that, and we’ve been asking for that. But technically, you’re charging me more to do that. If we don’t take a deep look at what we’re doing, we’re going to tax ourselves out of the market.... If Customs is on a shift system it should not be a problem. They’re on a shift system now. If I bring in airlift at 5pm, I have to pay overtime when they are working a shift system. Explain that for me please.”

Mr Wilson replied bluntly: “You run a business that’s generating profits. We are not in business to subsidise foreign businesses. It was a bad idea when we did it, we corrected that bad idea and moved on from that. Airlines have to pay their fair share of what is the cost of that service. That’s our position.

“Those that don’t pay, like every other taxpayer, they have to face the consequences of non-payment.” Ms Foster said this “sounds like you’re threatening”, prompting an intervention by Robert Sands, the Bahamas Hotel and Tourism Association’s (BHTA) president, in a bid to calm the situation. However, Mr Wilson pressed on.

“I’m not threatening. This is the point which some in industry don’t seem to understand. Every taxpayer has an obligation to pay the taxes which have been assessed,” he added. “If they don’t pay the taxes that are assessed, they run the risk of action by the Government. That has to be clear. That’s not a threat. That’s the law.

“It’s best people familiarise themselves with the law as opposed to asking for special treatment. We cannot fund the country on special treatment. We cannot fund a billion dollar corporation. I have to pay and provide services for the entire country from the taxes we collect.”