06132023 BUSINESS

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Realtors voice fears on tax ‘inconsistency’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

REALTORS yesterday voiced concern over “the optics” and “inconsistency” of tax policy as the Government moves to adjust the VAT paid on real estate sales to ensure foreign buyers pay a 10 percent rate across-the-board.

The VAT (Amendment) Bill 2023, which accompanies the 2023-2024 Budget, contains another previously-undisclosed tweak that is consistent with the Davis administration’s stated policy of placing the burden of increased taxes

• VAT rising to 10% on foreign buys below $1m

• Concern about ‘optics’ of two different tax rates

almost entirely on nonBahamians via the likes of raised cruise passenger departure taxes and marina docking levies.

The legislation, which is due to be passed into law after the Budget debate ends and take effect from

July 1, 2023, quietly amends the VAT Act’s Third Schedule to ensure that “every deed of conveyance, assignment or transfer of real property to a foreign person” attracts a 10 percent VAT rate.

Given that all property purchases of $1m or more already attract 10 percent VAT on the acquisition price, only transactions involving foreign buyers for less than this amount will be impacted. The Davis administration, besides targeting a higher VAT rate on real estate purchases by foreigners worth less than $1m, has also hit the same segment with the 25 percent ($30,000) increase in the annual real property tax cap from $120,000 to $150,000.

• Gov’t targeting over $300m from property sales SEE

However, the VAT adjustment, which the Bill’s “objects and reasons” confirms was “inserted to

Atlantis will ‘certainly’ submit more Royal Caribbean queries

By NEIL HARTNELL Tribune Business Editor

A SENIOR Atlantis executive yesterday said Royal Caribbean has “addressed some of our concerns” about the impact its project will have on Paradise Island’s coastline but the mega resort will “certainly” be submitting more questions.

Vaughn Roberts, Atlantis’ senior vice-president of government affairs and special projects, told Tribune Business that the cruise giant’s $100m Royal Beach Club development is “clearly taking shape” after taking several of the issues raised by the resort and other observers into account.

Describing last week’s second public consultation as “just a step in the process” that Royal Caribbean has to follow to obtain the necessary environmental approvals, he declined to comment when asked by this newspaper if the cruise line had adequately satisfied all Atlantis’ concerns

• Cruise line 'addresses some concerns' on PI coastline

• 'Unfair' to release updated EIA two days before meet

• Environment advocate: 'Ball now in court' of cruise line

with respect to the beach destination it plans to develop on western Paradise Island in the vicinity of Colonial Beach.

Mr Roberts said Royal Caribbean still appeared to be “working through their plans, and working through the details of what they want to do”,

so elements of the proposed Royal Beach Club remain unclear to both the cruise line and those pressing for answers on key environmental and socioeconomic issues raised by the project.

Atlantis has been especially vocal with its concerns to the clear irritation of the Davis administration, which has approved the Royal Beach Club in principle provided it satisfies all environmental concerns. Mr Roberts noted that Royal Caribbean is now “sharing more information” as to its intentions and plan details with the Bahamian public, which will aid betterinformed public feedback and questions.

“Clearly they’re sharing more information, clearly the project is taking shape having considered some of the concerns we have raised,” Mr Roberts told Tribune Business. “Obviously we have continued to follow it very closely. I think their revised plan

SEE PAGE B5

Protest pressure builds on North Andros banking woe

By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net

THE MP for North Andros and the Berry Islands yesterday issued a “plea” for intervention to resolve his constituency’s banking crisis with pensioners now forced to fly to Nassau to access funds and

conduct financial services business.

Leonardo Lightbourne, addressing the House of Assembly during the 20232024 Budget debate, said:

“I would like to plead on behalf of the people of North Andros and the Berry Islands for an intervention and the presence of a local bank. An ATM (automatic teller) machine

cannot meet the needs of the people. The North and Central Andros community needs a physical presence desperately.

“This is indeed a pressing issue that must be looked into urgently. Additionally, this is important to economic building and attracting investments in these islands. The people

have suffered long enough and we need a bank now.”

Mr Lightbourne said the absence of a physical bank branch in his constituency has forced some pensioners to travel to Nassau to conduct transactions, slicing their fixed income in half.

Residents also frequently spend hours commuting to

SEE PAGE B5

Minister confirms civil service pension reform

By FAY SIMMONS Tribune Business Reporter jsimmons@tribunemedia.net

PIA GLOVER-ROLLE

A CABINET minister yesterday confirmed that draft legislation for a new civil service pension plan will son be presented to the public sector unions

to obtain their views and feedback.

Pia Glover-Rolle, minister of state for the public service, told the House of Assembly during the 2023-2024 Budget debate: “The Government, led by the Ministry of Finance, is exploring ways that a contributory pension plan

provide a rate of 10 percent where there is a transfer of real property to a nonBahamian”, comes just a year after the Government changed the rates for all purchasers - Bahamian and foreign - for deals valued at less than $1m by inserting a so-called ‘sliding scale’.

While all purchases worth $100,000 or less remained attracted 2.5 percent VAT on the purchase price, the Davis administration in the 2022-2023 Budget lowered the rate on transactions worth between $100,000 and $300,000 from 10 percent to just 4 percent. Similarly,

Total shutdown: Just 1% of firms able to survive Dorian-type blow

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BAHAMIAN businesses have warned that commerce on islands hit by future Dorian-type natural disasters will almost completely shutdown with this nation forecast to be the worst-impacted of major Caribbean territories.

The Inter-American Development Bank (IDB), in its latest Caribbean quarterly bulletin, revealed that just 1 percent of Bahamian business owners believe they will be able to “remain open for business” if they cannot access their customer markets, primary physical location and basic utility services following a natural disaster such as a major hurricane.

Together with Barbados, The Bahamas ranked joint bottom among major Caribbean nations in terms

of the proportion of businesses able to continue operating during and after such an event. The finding further exposes the need to enhance private sector resiliency, and that of key infrastructure such as electricity and communications, given that rival territories appear more confident about their ability to bounce back from major storms.

Some 5 percent of Jamaican businesses, and 10 percent of those in Trinidad & Tobago, voiced confidence about their ability to keep operating during and in the immediate aftermath of natural disasters, while for Guyana and Suriname the percentages were 23 percent and 10 percent, respectively.

“The last five years have been challenging for Bahamian businesses,” the IDB report said, with deft

can be feasibly introduced. The draft legislation will soon be presented to public sector unions for feedback.”

She explained that the benefits under the new pension plan, a defined contribution scheme that

SEE PAGE B5

ROYAL CARIBBEAN’S ROYAL BEACH CLUB

DAVID MORLEY MIKE LIGHTBOURN

BAMSI FORGING DEEPER PARTNERSHIP WITH SHEDD

BAHAMAS Agriculture & Marine Science Institute (BAMSI) officials met with their counterparts from the Shedd Aquarium, a Chicago-based non-profit, for a two-day meeting in Grand Bahama to discuss their growing partnership.

The tie-up is focused on providing broader opportunities for Bahamian students focused on marine science, and issues related to conservation and marine life studies. Dr Raveenia Roberts-Hanna, BAMSI’s executive director, who was in Freeport to meet with Shedd, said the Institute’s students are already

benefiting from the collaboration through internships and research opportunities with the US research team. She described the relationship between the two organisations as a strategic partnership, with BAMSI students able to take advantage of the relationship through greater exposure to global research initiatives.

“I look forward to a long working relationship with them, and it’s really important for BAMSI because, yes, our training is country specific, but this type of exposure really gives our students that global

perspective,” Dr RobertsHanna said. While in Grand Bahama, the Shedd team also met

with representatives from the University of the Bahamas and toured several marine-focused facilities.

REPRESENTING BAMSI were Dr Raveenia Roberts-Hanna, its executive director, and Sherese Cunningham, registrar.

The delegation visited The Bahamas on an 80-foot research vessel, the R/V Coral Reef II. The vessel allows researchers to explore remote parts of the archipelago over extended periods of time.

Shedd Aquarium, which focuses on environmental, education and animal care issues, has been conducting extensive research in The Bahamas for some 30 years, investing significant resources into examining sharks, conch, lobster, grouper, iguanas and coral.

BFSB and top executive receive leading honours

THE Bahamas Financial Services Board (BFSB) and its chief executive have both been honoured by an international investment publication.

The BFSB and Dr Tanya McCartney, who also serves as its executive director, received the 'Best regional finance centre' and 'Chief executive of the year' awards frrom International Investor. International Investor is an online and printed publication providing information and news on topics such as world markets, industry analysis, breaking trends, investing opportunities

and high-level executive interviews.

Dr McCartney, in a statement following receipt of the awards, said: “The Bahamas has always sought to provide superior financial products and services, and a world class client experience. It has proven itself to be nimble and responsive to global changes – always mindful of the need to adhere to international standards with respect to compliance, cooperation and transparency.

"This is complemented by the fact that The Bahamas is not only somewhere that offers bespoke private wealth management, but is also a beautiful place to live

It is now developing deeper collaborations with faculty from BAMSI and the University of The Bahamas. Part of their mission is to spark compassion, curiosity and conservation for the aquatic world. To help sustain healthy ecosystems, Shedd staff biologists conduct research, including in The Bahamas, to understand and mitigate the impacts of serious threats to culturally and commercially important species.

DR TANYA MCCARTNEY

and work in. We see this as a winning formula for the jurisdiction as we strive to enhance our competitive advantage.”

International Investor’s award winners are nominated by industry experts using a wide range of criteria and multiple research platforms. The criteria include leadership, innovation, proof of development, digital transformation, tax regulations, banking system, financial system stability and accessibility to international markets.

Former landfill names new operations chief

THE New Providence Ecology Park (NPEP) has named Terence Lord as its new landfill operations manager with responsibility for further driving improvements in the former landfill’s waste reduction and environmental protection.

In his new role, Mr Lord will oversee daily operations at the former landfill site located off Tonique Williams Highway. With a background in waste management, he has managed large-scale projects while

ensuring compliance with environmental regulations, the US Environmental Protection Agency (EPA) and local environmental agencies.

In his previous positions at waste management facilities, New Providence Ecology Park said Mr Lord held responsibility for budget development, administration and staff management while ensuring optimal efficiency and environmental sustainability.

N O T I C E

DrakeDirect Limited

NOTICE IS HEREBY GIVEN as follows:

(a) DrakeDirect Limited is in dissolution under the provisions of the International Business Companies Act, 2000.

(b) The dissolution of the said Company commenced on the 9th June, 2023 when its Articles of Dissolution were submitted to and registered by the Registrar General.

(c) The Liquidator of the said Company is Jonell Rolle.

Dated the 12th day of June, 2023.

H&J CORPORATE SERVICES LTD.

Registered Agent for the above-named Company

“I am truly impressed with the progression of the New Providence Ecology Park and its unwavering commitment to championing sustainable waste management in our country,” said Mr Lord. “It is an honour for me to join the New Providence Ecology Park team and be a part of this remarkable organisation. The dedication and passion exhibited by the team are commendable, and I am excited to contribute my expertise in furthering our environmental protection efforts.”

Besides his experience with the Bahamian waste management ecosystem, Mr Lord is certified to manage and operate landfills in Alabama and Florida. He has received training from the Florida Landfill Operations Training and the Alabama Department of Environmental Management.

Felix Stubbs, New Providence Ecology Park’s chairman, said: “We are delighted to have Terence Lord on board, and his appointment reflects the organisation’s dedication to continuously empowering Bahamians to lead the charge in improving waste management practices and protecting the environment.

“I am confident that under Lord’s management, the New Providence Ecology Park team will flourish and enable the organisation to remain at the forefront of sustainable waste management initiatives contributing to a greener future.”

New Providence Ecology Park describes itself as a 160-acre landfill that is aiming to move The Bahamas to more sustainable, environmentally-friendly waste management practices.

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EXUMA BUSINESSES STRUGGLE WITH ‘CRAZY’ FLOODING’S IMPACT

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

EXUMA businesses yesterday said they are struggling with the loss of commerce and impact from “crazy” flooding that has cut-off the northern part of the island although airlift has not been affected.

Kim Thompson, owner of Thompson’s Car Rental, told Tribune Business it has not been renting vehicles because some roads are impassable. She added that “people won’t respect your vehicle” and will drive through the flood waters without regard.

“We’re open right now because some of the roads are passable, but we’re still telling people to be careful with the parts of the roads that are flooded. I just know some people will attempt to drive through the roads that are flooded,” she added.

Ms Thompson normally rents 120 cars on a daily basis and gets most of her business from tourists. “It’s

not true that the airport is down. The airport was never closed. We were getting flights every day,” Ms Thompson said.

“I heard people reporting that flights had stopped, but I worked all day on Sunday and I know we had Silver Airways twice, we got American Airlines twice. We had Bahamasair morning and evening, and we also had Western Air in the morning and the evening. So the airport being closed was not true.”

Alfred Williams, general manager of Eva’s Place, said it is “crazy” in Exuma right now but the business opened yesterday morning. Unsure how long the company will remain open because the rain had started again, he said: “Some streets are still flooded and people can’t get past, and they can’t get to work and people just can’t get out. This may go on like this for the rest of the day.

“I live in Farmer’s Hill and they had to cut the trench out from the pond to the sea because it was overflooded so they could

run the water off into the canal under the Farmer’s Hill bridge straight out to the ocean, or else we would have been stuck for days on that side.”

The north-western part of Exuma, from Sandals Emerald Bay resort heading north, suffered the most

from the weekend flooding but there was little structural damage aside from that caused by the water. “I just made it out to come to work from home just to check things out, and it’s still flooded through the corners. People’s homes and cars are still under

water. The water is still across the road. If you are in big dump truck you can get by, but if you are in car then no,” Mr Williams added.

Marco Forbes, owner of Houseman on the Bay, just four miles south of Sandals Emerald Bay, said his

Ministry uses AI for pot hole detection

By YOURI KEMP Tribune Business Reporter ykemp@tribunemedia.net

THE Ministry of Works

yesterday said it is employing artificial intelligence (AI) to predict where pot holes will form on The Bahamas’ road networks as the country moves into rainy season.

Damian Francis, its deputy director, speaking at a press conference yesterday revealed that AI is being employed in the ministry’s road rehabilitation programme to not only

organise traffic flows but to better predict the likelihood of pot holes forming on multiple roadways. There are 12 zones, each with their own assigned contractor, that the Ministry of Works is focusing on in New Providence with regard to filling potholes.

“The issue that we have in New Providence is the existing roadways are in a very poor condition in a number of areas, and that is resulting in potholes developing in a very short period of time, specifically when it’s the rainy season.” Mr Francis said. “We also have

a paving programme which will address a lot of these areas.

“We’re also looking at other AI-based software, and another one is monitoring our road maintenance management system for New Providence and the Family Islands, which is collecting data, assessing the data. Basically we install a camera on our vehicles, we videotape the existing roadway. The data that’s picked up cracks in the roadway tells you how soon we’re going to start exhibiting pot holes,and then also picks up road markings, signage

and a lot of data that we can utilise to maintain the road network.

The benefit of the AIbased programme is reduced detection and repair time. “It may take someone on a mile of road about two to three days to do a proper assessment. In 30 minutes, we can drive that roadway, pick up the data, have the data recorded and go back to have a look at it, assess it and determine what we need to do next,” Mr Francis said.

Alfred Sears KC, minister of works and utilities, said the Ministry of Works has undertaken a “comprehensive programme” to deal with road rehabilitation ahead of the International Road Federation (IRF) conference that starts today at Atlantis, Paradise Island.

“This conference will bring together some of the most distinguished transportation experts, decision makers and professionals from around the world to delve into critical issues and

restaurant had not been impacted at all. “There were certain areas that had been impacted like up to Farmer’s Hill and Sandals, where they had to run some of the water off into a canal from the lake into the bay, so that helped out a lot with Farmer’s Hill,” he said.

“There are certain areas where there is low lying water where it isn’t so bad, but I would say it is more of the north and north-west areas that were impacted the most, like Rolleville was flooded pretty badly. Also, it’s where you were seeing cars underwater. But our restaurant wasn’t affected at all because we sit up pretty high, so we weren’t affected at all.” Tourist flows from Sandals to Houseman may be affected because of the flooded roads. Mr Forbes added: “I’m not expecting too many people coming in from the nothern part of the island at all because it was pretty flooded up there.”

explore innovative solutions in the field of road infrastructure,” he said.

“Their collective expertise, diverse perspectives and vast experience will provide invaluable insights and drive collaborative efforts towards developing a safe, inclusive and resilient transport system in the Caribbean. As an organisation with strong presence in the Caribbean since 2012, the International Road Federation has continuously demonstrated its commitment to addressing the region’s diverse needs and challenges.”

FLOODING IN EXUMA

TOTAL SHUTDOWN: JUST 1% OF FIRMS ABLE TO SURVIVE DORIAN-TYPE BLOW

understatement. “Hurricane Dorian struck in 2019, leaving physical damage worth approximately 18 percent of GDP, of which 91 percent was borne by the private sector. A few months later, Bahamian borders were shut for almost two years because of the COVID-19 pandemic, which contracted real GDP in 2020 by 23.8 percent....

“Not surprisingly, 100 percent of Bahamian firms in 2020 were concerned that their business operations would be disrupted by a natural or humancaused national disaster, as reported in responses to the Innovation, Firm Performance and Gender (IFPG) Survey conducted by Compete Caribbean in 2020.

“This very high level of concern was echoed by other Caribbean countries that depended on tourism or were occasionally affected by hurricanes, while countries such as Guyana and Suriname,

which are neither servicesoriented nor typically affected by hurricanes, showed sharply lower levels of such concern (both at 70 percent).”

And, when it came to the ability of Bahamian companies to remain open in the aftermath of a future Dorian-type event, the IDB survey said 99 percent of respondents revealed they would be unable to do so.

“The Bahamian business owners believed that they would not be able to remain operational if, during a natural disaster, they were to lose access to their markets, basic utilities or place of business,” the IDB report said.

To address the situation, it added that “substantial investments by both the private and public sectors in physical and digital infrastructure” will be required in The Bahamas. Noting that “if the private sector is the engine of the economy, then infrastructure is the highway on which those engines need to run”,

the report added that this nation’s utilities are already challenged even in the best of times.

“In The Bahamas in 2019, more than four out of five businesses reported power outages, while more than three out of five reported disruptions in Internet service. Across the Caribbean, regardless of level of development and exposure to hurricanes, disruptions to Internet service and electricity are the norm,” the IDB report added.

“However, in The Bahamas, unlike its peers, mobile service has proved to be the most reliable and resilient for businesses. Mobile telecommunications is relatively less dependent on fixed, connected infrastructure, which contributes to its reliability during natural disasters.

“On the other hand, the unreliability of energy and telecommunications in The Bahamas broadly suggests a need for improvement.

According to IDB calculations, based on income per

capita in The Bahamas, energy, telecommunications and digital adoption were ranked as key development gaps in need of further investment.” The report said the Compete Caribbean survey found that, unlike its regional competitors, large firms in The Bahamas were more likely than smaller enterprises to reject payment for goods and services by credit card. Some 56 percent of large business respondents said they accepted credit cards, compared to 73 percent of smaller businesses. And, while 7 percent of small businesses at that time accepted digital or mobile money payments, no large firms did.

It was suggested that the continued reliance on cash was one factor why adoption of the Sand Dollar, the Central Bank-backed digital version of the Bahamian dollar, has been relatively slow up to this point. “Unlike peers across the region, Bahamian large

firms were more likely than their smaller counterparts to refuse credit card payments, both in person and remotely,” the IDN report said.

“Even before the rollout of the Sand Dollar in 2022, the level of resistance to payment methods outside of cash was high and may partly explain the slow uptake of Sand Dollars by citizens and firms.....

During a hurricane, when power service is intermittent and access to cash from banks and automated banking machines is restricted, mobile phones may offer an opportunity for business continuity across the islands, and for muchneeded financial services for residents in underbanked Family Islands. Mobile phones can provide not only communication, but also be leveraged for means of payment.”

Warning that The Bahamas will struggle to hit its economic growth targets without improved infrastructure, the report

concluded: “Both the COVID-19 pandemic as well as the rising threat of natural disasters mean that businesses must find new ways to maintain continuity while increasing productivity.

“New technologies such as mobile money offer new opportunities, especially within the e-commerce space, for both businesses and residents across the sparsely populated Family Islands. Yet investment in traditional infrastructure is also needed, particularly for the provision of power.

“That infrastructure is still overwhelmingly dependent on aging infrastructure that is prone to outages. If the private sector is the engine of the economy, then infrastructure is the highway on which those engines need to run. Without it, it will be more difficult for the Bahamian economy to reach its goal of sustainable growth and development.”

N O T I C E THE GREENHAVEN LAND COMPANY

LTD.

Pursuant to the Provisions of Section 138 (8) of the International Business Companies Act 2000 notice is hereby given that the above-named Company has been dissolved and struck off the Register pursuant to a Certificate of Dissolution issued by the Registrar General on the 11th day of May, 2023.

Jonell Rolle Liquidator of THE GREENHAVEN LAND COMPANY LTD.

N O T I C E ZUCCI HOLDINGS LTD.

Pursuant to the Provisions of Section 138 (8) of the International Business Companies Act 2000 notice is hereby given that the above-named Company has been dissolved and struck off the Register pursuant to a Certificate of Dissolution issued by the Registrar General on the 11th day of May, 2023.

Jonell Rolle Liquidator of ZUCCI HOLDINGS LTD.

ATLANTIS WILL ‘CERTAINLY’ SUBMIT MORE ROYAL CARIBBEAN QUERIES

addresses some of the concerns we had with regard to the coastline; what they intended to do with the coastline.

“To the extent they continue to consult the public, and share more information, that is always helpful.... I think it seems like their is more to share than what we saw them communicate last Thursday. The process of consultation with the Department of Environmental Planning and Protection (DEPP) is the public has 21 days to submit further questions, and I think they will share a lot more good information.

“I imagine Atlantis will submit more questions and others will as well,” Mr Roberts added. “They’re putting out more detail as to what the project involves, putting it out in the public domain. We continue to follow the process, and I’m certain we’re going to submit questions, because we have more of them, in this 21-day period and see what happens from there.

“I think they’re [Royal Caribbean] still working through their plan and working through the details of what they want to do, so things are not quite clear to us and not quite clear to them either. It’s just a step in the process.” Atlantis has hired Eric Carey, the former Bahamas National Trust (BNT) executive director, to assess the cruise line’s Environmental Management Plan (EMP) and related documents when they are released for public comment.

The Paradise Island mega resort has previously raised multiple environmental misgivings over Royal Caribbean’s project, including the likelihood that solid, and potentially other forms of waste, will have to be removed from the site by boat on a daily basis. The cruise line has addressed these concerns by stating that most waste, both solid and liquid (wastewater), would be treated and recycled on-site.

“Our environmental concerns are around a couple of key things,” Mr Roberts

previously told this newspaper. “We think any expansion of the shoreline, the beach, putting any structures or jetties there, has the potential to change the beaches of Paradise Island.

To the extent the coastline of Paradise Island is changed, there’s economic implications for Atlantis, Four Seasons (the Ocean Club), and everyone else who benefits from the beautiful natural beaches.”

Rashema Ingraham, executive director of Waterkeepers Bahamas, yesterday told Tribune Business that “the ball is now in the court” of Royal Caribbean to show it takes its environmental, social and governance (ESG) responsibilities by addressing the “gaps” identified by advocates at last Thursday’s consultation and previously. She said it was “unfortunate” that the public consultation had only focused on environmental issues and failed to touch socio-economic concerns such as the impact the Royal Beach Club will have on Bay Street merchants and

other cruise-dependent Bahamian-owned businesses by taking an average 2,750 passengers per day over to Paradise Island.

Royal Caribbean has argued that the increase in cruise passengers to Nassau, with it set to increase its own visitor numbers from 1m per year pre-COVID to 2.5m by 2027, will mean there are more than enough tourists to go around for all. Ms Ingraham, though, said social and economic factors related to the project are “contributors to, as well as dependents of”, the environmental factors.

“That is one of the gaps that is clearly absent from the entire discussion related to the public consultation,” she added. “It was very unfortunate we didn’t get to discuss those things because there were people who had come to discuss those things.”

Praising the DEPP for “the flow of the consultation”, Ms Ingraham also argued that it was “unfair” for Royal Caribbean to release a supplemental Environmental Impact

PROTEST PRESSURE BUILDS ON NORTH ANDROS BANKING WOE

FROM PAGE B1

the ATM only for it to be out of service.

He added: “The constituents on pensions have to travel to Nassau because there are no banks. What they are actually receiving in their monthly pension is less than half [of what they are entitled to] because they have to purchase plane tickets, find accommodations, transportation etc.

“There is no physical presence of a bank in North or Central Andros, so residents have to drive more than an hour only to find out that ATM is not operational in some cases, which is a major inconvenience and disruption not only for the residents, but a major disruption for commerce.”

The North Andros Chamber of Commerce hosted a Town Hall meeting last week to discuss options for solving the area’s banking woes. Donna Pickstock, North Andros chief councillor, told Tribune Business: “I know that banking as we know it, the brick and mortar banking, the face-to-face is quickly becoming obsolete and online banking is the way the world is going now.

“All transactions are transitioning to being done online. But we need a bank here in North Andros, if only once or twice a week, because we still have businesses here and the elderly who want or need that in-person banking. It’s a challenge to the businesses

MINISTER CONFIRMS CIVIL SERVICE PENSION REFORM

FROM PAGE B1

will require new civil service hires to contribute a portion of their income to fund their own retirement, will be improved compared to the existing pay-as-yougo provisions. Existing civil servants will still be entitled to benefits under their existing pensions and National Insurance Board (NIB) payments. However, if they opt in to the new plan they will be eligible for those benefits as well.

Ms Glover-Rolle said:

“Ideally, the way this will work is that the benefits will be larger, on average, than those experienced under the existing plan, and will also be proportionate to the amount the public servant contributes.

“The more you contribute, the more you will receive. Existing public servants will still be entitled to their current pension plan, as well as NIB. They will be able to opt in to this plan so that when they retire they will receive

NIB benefits, the existing pension plan benefits, as well as the expanded benefits from the contributory pension plan.”

Ms Glover-Rolle added new public servants will be brought on under the new pension plan, which is designed to be portable. She said: “New public servants will be streamlined into the contributory pension plan, which will provide better benefits in a financially sustainable way for the beneficiary, as well as the Government.

“The plan is also intended to be portable. This means that if someone starts their career with the Government but then decides to explore private sector opportunities, they can take the plan with them and even begin to contribute more so that they can receive more benefits upon retirement.”

Simon Wilson, the Ministry of Finance’s financial secretary, previously voiced optimism to Tribune Business that legislation to

here. I think over the past few months revenue has declined.”

Ms Pickstock added that the current ATM is old and there are challenges obtaining the parts to repair it. She called for at least an additional ATM machine to service the residents of North and Central Andros.

“We only have one ATM machine here and I think that is becoming obsolete; they have difficulties finding parts for it,” she said.

“They need to put more ATMs in North Andros, at least two, because we also have persons from Central Andros coming here to do their banking.”

Reverend Raymond Neilly said the lack of access to banking facilities

reform public service pensions - including moving all new civil service hires to a defined contribution scheme, where they will contribute to their own retirement savings - could be ready for presentation to Cabinet by September this year.

A new line item in the Ministry of Finance’s 20232024 Budget is a $10m allocation for “employee pension contributions”, and the financial secretary confirmed this sum is to cover the Government’s share of payments on behalf of new hires as well as public sector workers “normally not covered” by a government pension such as weekly workers and local government staff.

“If we get the legislation passed this year, we will be in a position to start the defined contribution plan. That will be for new entrants,” Mr Wilson added. “It’s [the legislation] almost completed.

“We have to do some consultation with the public service unions. It’s more so for new entrants, and persons normally not vested in a government pension plan. We have a number of government employees not participating; weekly

Assessment (EIA) containing coastline, noise and other studies just two days prior to last week’s public consultation as it meant attendees had little to no time to study the documents and see if concerns raised from the 2021 meeting were incorporated in the plans.

“I believe all environmental advocates did what they need to do in terms of presenting the gaps in the project. It was a matter of us presenting the gaps, and the DEPP now having the EIA modified to address them in a sustainable way so that everybody is supportive of the amendments,” the Waterkeepers Bahamas executive director said.

“One of the things I wasn’t satisfied with is that I read their EIA and report from the previous consultation, and two days before this consultation they released a supplemental EIA, which was unfair. We need to track any changes so that we know where our concerns have been addressed.”

Ms Ingraham said she personally raised concerns about turtle nesting sites,

is impacting the business community and parishioners’ ability to pay offerings. He added that as a senior citizen he has to endure standing in line for hours, sometimes with the machine going out of service, before he can conduct a transaction.

He said: “The ATM is up now, and then by tomorrow it’s down, and it’s the only banking facility that we have - an ATM that is not functioning properly, sometimes for a week. We can’t access our funds at all. We have money in the bank but we cannot access our funds.

“It’s impacting the business places, it’s impacting the offerings in the churches, its impacting our children going to school and

workers, school Boards, livery services, worker for local government who are not normally pensionable.

“You have quite a few persons not normally pensionable. It’s a challenge.. persons who work for 20, 25 and 30 years and get nothing when they leave. We have to get it finalised, drafted and consulted, and then it will be in a position to go to Cabinet hopefully by September this year. Hopefully.”

The Government has long had its woes with unfunded civil service pension liabilities, which previous research by the KPMG accounting firm suggested would likely have reached $2bn by this stage without any reforms. Civil servants presently contribute nothing to their retirement, which are being funded by Bahamian taxpayers at the sum of $134.744m in the 2023-2024 Budget.

The IMF, in its Article IV report in 2018, agreed that the current system - where civil servants contribute nothing to funding their retirement - is “unsustainable”. And it called five years ago for “decisive measures.... to reduce debt”, singling out public sector pensions and health as two areas deserving close attention.

and how increased use of western Paradise Island by Royal Caribbean’s passengers could impact the breakwater protecting Nassau’s harbour from storm surges and high wave energy.

“I’m hoping that Bahamians are beginning to understand and appreciate that this is a process,” she added of the DEPP consultation. “It’s not this ‘for and against’ a project. It’s a process of trying to create a project that has limited impact on the environment.

“I would like for there, after Royal Caribbean would have looked at some of the questions and comments submitted to them, to be another consultation process for them to show where they have adopted those recommendations for filling in the gaps. It really depends on how they look at this second round of suggestions and how they address these to see if they are really serious about ESG and environmental impact. The ball is in their court.”

I, for example, am a senior citizen and I have stood in the line at the ATM.. one day for two-and-a-half hours and it went down.”

Reverend Neilly called for the Government to assist in resolving these issues, and warned that residents will protest if no action is taken.

He said: “We are saying here in North Andros that it’s supposed to be one Bahamas, that we are one nation, and why should we because of our population have to suffer in this kind of way? We believe that the same way the Government subsidises Bahamasair to fly to certain islands because of their small population, we believe that we are entitled to proper banking facilities; modern banking facilities on North Andros just like other parts of The Bahamas.

“The civil servants’ pension system is unsustainable,” the Fund warned. “Government employees draw pensions at retirement without contributing to the system while employed.

Staff analysis in the 2016 Article IV Staff report noted that accrued government pension liabilities totaled $1.5bn in 2012, and would rise to $3.7bn by 2030 as the population ages.”

The IMF called for reforms that involve “moving to a contributory regime in the near term, and to a defined-contribution scheme in the mediumterm”. This would require civil servants to contribute a portion of their salary to funding their retirement, rather than having this financed 100 per cent by the taxpayer through the Budget as is done currently.

Ms Glover Rolle, meanwhile, yesterday also revealed that a public service audit is nearing completion and that the digitisation of the public service will lower turnaround times.

She said: “A public service-wide audit is nearing completion, which will inform major recruitment and training efforts, as well

“We are standing together as a people saying that government must help us. That is what the Government is there to do. Yes, we can try our best to solve our problems, but surely the elected officials are to make their presence known and they are to hear the cries of the people, and not just to hear their cries but to respond to our cries and let us know what are you going to do about our banking situation “

“And we want concrete answers. What is going to happen to us in North Andros? To whom do we appeal if we cannot appeal to those elected to represent us? It is critical here, and otherwise there is going to be a massive protest from the people of North Andros.”

as human resources policies moving forward.

“Digitisation efforts were initiated this year, and we are now moving full speed ahead with the digitisation of hundreds of thousands of files within the Ministry. When we are done, estimates indicate we should expect a significant boost in efficiency as we automate workflows and digitise files for quick and secure access. The end result will be faster processes for every area of public service.”

She added that this process will include a human resource management system that will ensure greater accountability.

Ms Glover-Rolle said:

“Another phase of our digitisation efforts is the introduction of a human resources management information system that is being led by the Ministry of Finance, in tandem with the Ministry of Public Service. This system will allow for greater accountability.

“This system will allow for ease of access for employees accessing their files and human resource matters. Most importantly, this will allow for authentication and verification of employees across the public service.”

for deals valued between $300,000 and $500,000, the rate was dropped to 6 percent; for purchases between $500,000 and $700,000 to 8 percent; and those between $700,000 and $1m have been taxed at 9 percent.

The latest reforms take the benefits of those lower VAT rates away from foreign buyers of Bahamian real estate including, it would appear, permanent residents. While realtors conceded that expatriate buyers are unlikely to be involved in real estate transactions worth less than $500,000, several suggested that the change - together with other Budget amendments - gives the impression of two tax systems or policies, namely one for Bahamians and the other for foreigners.

John Christie, HG Christie’s president and managing broker, told Tribune Business he was most concerned about the lack of consistency in the Government’s tax policies as it relates to real estate given that these now

seem to be adjusted every 12 months.

“The Government should be consistent. It’s not good because things have been moving quite well,” he said. “Stability is the most important thing, rather than bouncing around with constant changes in taxation. It’s not a good look really. It’s just the fact there’s inconsistency.

“The Government is just inconsistent in what they’re doing. I was surprised when the put it in in the first place [the sliding scale of VAT rates] and now they’re pulling it back for foreigners. The market has been very good with the low rates as people are buying. It is what it is. I would have preferred it stay the way it was, as we were making quite a bit of money. Government policy has usually been consistent for many years, and now it’s just bouncing around.”

Mr Christie praised the Government for at least keeping the lower VAT rates and ‘sliding scale’ in place for Bahamian real estate purchasers. The Government has leaned heavily on

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the post-COVID surge in real estate sales to revive, and drive, its revenues with the some $153m collected from VAT levied on such transactions during the first nine months of the 20222023 fiscal year.

It is forecasting that VAT from real estate sales will increase further to $237m for the full 2023-2024 fiscal year, with Tribune Business calculations suggesting this sum translates into around $2.68bn in sales activity based on the various rates. Income from this source is forecast to increase further to more than $297m in the 2024-2025 fiscal year, before breaking through the $300m mark with $319m in revenue the following year.

David Morley, Morley Realty’s principal, told Tribune Business that his main concern with the 10 percent VAT rate imposed on all foreign real estate purchases is “the optics” of seemingly creating two different tax systems - one for Bahamians, and the other for expatriates - given the economy’s continued reliance on foreign direct investment (FDI).

“It would only affect non-Bahamians looking to acquire property under $1m,” Mr Morley acknowledged. “It affects them on the VAT on the transfer. For those people buying properties valued at $500,000 or above, the rate will only be 2 percentage points higher. Financially I don’t think it’s a game changer, but where I have difficulty with it is the principal of it.

“All these changes on taxation as it relates to real estate are effectively slamming the foreign investor. You don’t have new taxes for Bahamians; you only have new taxes for foreigners. I find that to be a little harsh personally, but I don’t know what they do in other countries. Again: What is fair?

“I don’t like it as a general principle that we’ll slam it to international persons on all accounts. Is it going to have repercussions? I hope not. The perception of how it looks is that there’s two tax systems - one for Bahamians, one for foreigners. I don’t feel that’s fair.”

Noting that the Government was striving to

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generate increased tax reve-

nue, Mr Morley said foreign real estate buyers and owners are being hit with increased VAT on purchases below $1m as well as a raised real property tax cap. He added that the message being sent by The Bahamas was that, while it wants foreign investors, those persons have to “pay a premium” for the privilege of coming here.

“If I was a foreigner I would turn around and say: ‘Fine. You want me to pay a premium? What services are you going to guarantee me so I get them in a timely fashion?’ If I’m going to pay a higher premium, I expect better service’. The ease of doing business has been an issue in this country for the last five to seven years. I don’t particularly like the optics,” he said.

Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, warned that the change might “kill a few sales” and voiced hope that the Government will honour all sales in process involving foreign buyers and properties valued at less than $1m at the existing VAT rates.

“I’m hoping that any transactions presently under contract they’ll honour and apply everything at the old rate,” he added. “For sales over $1m, nothing has changed but not all are over $1m. There’s a lot of issues.

The transactions we have under way, I assume the Government will honour them at the present rate.

“We’re going to have to decide how to list properties for sale because the VAT is different depending on whether you’re selling to a Bahamian or a foreigner under $1m. It’s going to be massive confusion. Again, whose going to pay at the end of the day? The buyer pays all the expenses, but what percentage of the transaction are they going to charge the Bahamian and the foreigner? If the VAT is split 50/50, the Bahamian will object because he has to pay a higher rate.

“It just causes more confusion and upsets a lot of people, which I think we’re pretty good at doing. When we do an appraisal, we will need to know if the buyer is a foreigner and, if they are, they have to be told the rate is 10 percent. It’s just something we have to decide internally.”

Both Mr Lightbourn and Mr Morley conceded that two different rates - one for Bahamians, another for foreigners - was applied many decades ago under the Immovable Properties Act when the latter had to pay double the rate of local citizens.

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