The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Marina operators are still voicing concern about The Bahamas’ prospects for the upcoming winter boating season, with one telling Tribune Business: “We’re not a better deal.”

Peter Maury, a former Association of The Bahamas Marinas (ABM) president, said this nation must “stop thinking we’re the only place on the planet” as he disclosed that boat slip reservations “aren’t what they were” prior to changes to the process of obtaining charter licences and entering the country.

Reiterating previous concerns that these procedures are too complex and bureaucratic, with incoming boats and yachts seeking “value for money”, he predicted that some marinas will be challenged to “make our budget” for the 2023-2024 winter season.

Mr Maury based this on the ever-increasing competition from rival destinations in the Caribbean and Central America, including the likes of Jamaica and Costa Rica, plus The Bahamas being a more costly destination for commodities such as fuel and groceries with its VAT and import-duty reliant tax system.

He also asserted that, unlike other jurisdictions, foreign yacht charters are not able to offset or ‘net off’ the VAT incurred on their in-country supplies purchases against the 10 percent levy paid to the Government on the charter fee.

Speaking after returning from the recent Fort Lauderdale Boat Show, as well as the Monaco Boat Show, Mr Maury said The Bahamas and its private sector “showed well” but expressed misgivings over whether this will outweigh all the negatives currently impacting the jurisdiction’s attraction for boat captains, charter firms and yacht brokers.

“The feedback is the same as always,” he told Tribune Business. “People want to come to The Bahamas but we have a very difficult and very complicated way for boats to enter the country, pay all the fees and everything else. It’s not easy; it’s very complicated no matter what people say.

“The Government always says they’re super rich and can pay the tax. But people want value for money whether they’re wealthy or not. They don’t want a complicated process. We had a good show, and a lot of Bahamian companies were there. But it doesn’t matter when we make it so difficult. It takes us down a few notches.

“As an Association, a group of companies, a Board, we’ve tried to mention to the Government they need to make this whole process better and nobody seems to be listening. We have the likes of Belize, Costa Rica, the Virgin Islands, even Jamaica getting into the yacht and marina programme now.”

Mr Maury reiterated previous voiced concerns that the process of obtaining a charter licence to operate in The Bahamas has been made more complex by the requirement to manually obtain a “commercial transire”, a shipping document normally used by cargo vessels in relation to duty payments, before vesses can get their cruising permit and pay associated fees to the Port Department.

Whereas previously they could obtain a cruising permit, apply to the Port Department for a charter licence, pay their 4 percent fee and start work, he added that they now have to obtain the transire from Customs and produce this to obtain the charter licence.

“This takes three to four weeks. Nobody will come here for a month and go through this process. It’s too difficult,” Mr Maury argued, adding that foreign charters now also have to obtain a Taxpayer Identification Number (TIN) to pay the 10 percent VAT now also due on the foreign charter fee.

“A lot of other countries have a much easier process for when you bring stuff in for boats. You’re allowed to bring it in duty-free and they spend their money in-country,” he added. “I don’t want to get myself in trouble. Our product is very expensive. Our fuel is more expensive, our groceries are more expensive because we have high duty rates and VAT.

“On competitiveness, we’re not even close. We charge VAT, we charge the 4 percent Port Department fee when other countries are at zero.” Mr Maury said that while the Government liked to compare The Bahamas to Europe when it came to boating industry taxes, the latter operated VAT differently than this nation when it came the sector.

He added that, in Europe, boats were able to offset or ‘net off’ a portion of the VAT payable on the charter fee against what they paid in taxes on fuel, groceries and other consumable supplies. This, the former ABM president added, incentivised charters, guests and crew to spend money in the destinations they visit, thereby boosting economic activity and employment.

But The Bahamas, Mr Maury said, was not doing it this way. While in Monaco, he said the president of the European Council of Yacht Professionals informed him that The Bahamas has “the highest tax rates not in the Caribbean but the world” when it comes to the yachting and boating sector.

“The market is definitely becoming more competitive,” the ex-ABM president said. “In my opinion, there’s going to be people looking for a better deal, and we’re not a better deal. If the Government can move at the speed with which they introduced these changes, we have a shot at salvaging our winter season. They need to go back to the way it was done before.”

Calling on the Government to eliminate the 4 percent Port Department fee, and keep the VAT while giving the ability for charters to deduct what is paid against their local spending, Mr Maury added: “The reservations aren’t what they were prior to the new set of rules coming in. I know that for a fact, and know that from other operators, not only me. Other marinas are seeing what we’re seeing.

“I wish some people in government would sit down and meet with the stakeholders. No matter what they think, we know what’s going on. We deal directly with the customers. There seems to be a disconnect hearing what we’re saying.”

As for the winter season’s prospects, Mr Maury said: “I think it’s going to be a challenge. It’s going to be a challenge for some of us to meet our budget in my opinion. Our fuel is a lot higher, our cost of goods is a lot higher. It’s going to be challenging because people are going to make decisions based on economics

“The show was good. There were a lot of boats. We have to be more proactive in getting them to come to The Bahamas and stop thinking we’re the only place in the planet.”

Marques Williams, the ABM’s current president, said in contrast that The Bahamas received a “very favourable” response at the Fort Lauderdale Boat Show and the main concern was improved communications and giving the industry time to adjust to tax and entry process changes.

“Everybody just wants clarity on it,” he told this newspaper. “The general feeling was, ‘hey we understand the VAT and Business Licence fee are going up’. It’s just the messaging and how things are being communicated to the industry. That was the main thing. We’ve got to make sure we get it out there, giving them time to adjust to the changes.

“We’re pretty much getting ready for the season. There’s a lot of tentative bookings, so we’re waiting to see how solid and how many of those pan out.”