EDITORIAL: Let businesses know of changes in good time

RECENTLY in this column, we talked about the ease of doing business – or lack thereof – in The Bahamas.

Those who trade in stocks and shares, or follow the ups and downs of the global markets, will be familiar with the truism that the market likes predictability. The same holds true at the local level.

So the shifts and zigzags that businesses face as they go about their day-to-day running are a frustration, but also a handbrake on the ability to plan future profitability.

Take, for example, the latest announcement that the government has made that it will start to levy VAT on private islands belonging to the cruise trade from March 1.

That 60-day deadline given to the cruise industry to implement VAT was described in yesterday’s Tribune by Michael Maura, the cruise port’s top executive, as seeming “unreasonable” and was “just not enough time”.

It is a fair point. Whether or not you feel the levy should be introduced, there certainly is a question of what the turnaround time could be expected for the industry to implement such a tax. But more than that, why the short notice? That industry operates with passengers who book many months, sometimes years in advance, we know that.

This move would be something long-term to bring financial returns over years and decades ahead. If we knew we were going to implement it from March, why not tell the cruise industry back in December, or September or earlier? Letting businesses know in advance allows them to plan accordingly. Sudden shifts sometimes need sudden corrections – and that can be as brutal as job cutbacks to deal with the unexpected costs.

Of course, there may not be much sympathy from the Bahamian public for the cruise industry, which is often seen as being outsiders despite the number of locals who derive their livelihoods from the industry.

So what about the boat owners who have found out that the government is busily U-turning on boat registration fees?

We are told that the government is going to have reduced fees for boat registration from March 1.

However, lots of people already paid the higher fees – and for those wanting to pay whatever the lower fees are, they want to know what it will be.

There is talk of refunds or credits for those who have already paid, so they ought to know what their financial situation is so that they know what to do with that money.

It seems those who already paid – the ideal people who have done what was asked from the off – might just get a credit to future payments rather than a refund. That seems like penalising the best-behaved taxpayers for government indecision.

Then there is the elephant in the room – the expected increase to NIB due to take effect from July 1.

Again, why do we not know the amount that will be, with the very sensible Peter Goudie, head of the labour division over at the Bahamas Chamber of Commerce and Employer’s Confederation, last week asking: “What’s the big secret?”

He said that there should be a minimum notice of six months, saying: “People have got to plan on this stuff. How can you budget?”

He’s right.

The cruise lines ought to get that same option to plan. The boat owners – especially the likes of fishermen and small businessmen – ought to get the option to plan. And every business up and down the land ought to get the option to plan.

A well-run economy does not need to spring surprises on people financially. Simply let people know in good time what the changes will be so they can adjust to it. Otherwise, businesses have to leave more in the pot unspent to cover any unexpected shocks. That’s money that could be working to benefit the economy all round rather than being held in reserve just because you do not know which way the government will jump.

Do we need money so urgently that we cannot give advance notice? Is that a warning bell for our economy?

Or can we just extend the courtesy to businesses and citizens to allow them to know what is coming?

Whatever the reason for this rollercoaster ride, it does not help to boost confidence that our economic plan is well-thought out.


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