Near riot in The Bahamas over proposed tax increases

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Pictures by independent photo-journalist, G.R. Wilson

By Youri Kemp
Caribbean News Now associate editor
youri@caribbeannewsnow.com

NASSAU, Bahamas — A near riot broke out in the downtown area of Parliament Square in Nassau, the capital of The Bahamas, as hundreds of protestors gathered, tore down steel barricades separating them from security forces and the House of Parliament as they marched in protest against a proposed value added tax (VAT) hike from 7.5 percent to 12 percent, set to come into effect at the start of the new fiscal year on July 1, in addition to a proposal to tax gaming/lottery operators.

The protest, organised and led by local activist and former senator, Rodney Moncur, who is currently employed with one of the largest gaming operators in the country, Island Luck, as a talk-show host for the operator’s television station, Island Luck Television Studios, took to the streets a show in solidarity as protestors in town screamed chants of “Keep ya corned beef” — a jibe at the budget proposal’s trade off of lowered duties on corned beef and other canned items a part of a list of breadbasket items proposed to be exempted from duties and VAT.

The protest swelled as gaming house operator, Island Luck, owned by Sebastian Bastian, who is also the chairman of the Bahamas Gaming Operators Association, allowed his workers to attend the protest and had them take an involuntary day off from work to attend the rally.

Bastian stated that over 3,000 jobs are at stake if the proposed taxes on gaming houses take effect, putting in jeopardy the industry and thousands of lives of persons who have come to depend on the industry as a means for employment.

The gaming industry, which was projected to generate an estimated (US$700 million to $1 billion, was a primary target for the new tax proposals by the current Free National Movement (FNM) administration as they saw the industry as undertaxed and under-supervised by previous governments, first operating illegally as gaming and lottery houses before they were regulated and made legitimate in 2014.

The BGOA has also threatened the government with legal action if these proposals take into effect, citing the unfairness of the taxes versus other sectors that generate the same or more revenue annually.

Web shops, under the former Progressive Liberal Party (PLP) government’s proposals in 2014, currently pay either 11 percent tax on their gaming revenue or 25 percent of earnings, whichever is greater, plus an additional 2 percent cut of revenue to help fund social causes.

The new budget calls for a variable tax rate, starting at 20 percent on revenue up to BSD20 million (US$20 million), rising to 25 percent on revenue up to $40m and incrementally thereafter, while any operator lucky enough to generate revenue over $100 million will face a 50 percent tax rate.

Ministry for finance, Peter Turnquest, explained in his budget communication at the start of the budget debate that gaming houses that make revenues up to $20 million will be taxed at a rate of 20 percent; those that make between $20 million and $40 million will be taxed at a rate of 25 percent; those that make between $40 million and $60 million at a rate of 30 percent; those making between $60 million and $80 million at a rate of 35 percent; those making between $80 million and $100 million at a rate of 40 percent; and the gaming houses bringing in more than $100 million at 50 percent.

Also, customers will face a new 5 percent tax on their deposits. Conversely, the government isn’t advocating a similar customer tax at Bahamian casinos, which are accessible only by international tourists.

The protestors were also greeted by several members of parliament from both sides of the political divide.

Minister for transport, Frankie Campbell, who was warned by police officers not to approach the angry crowd, was heckled at the event as ethnic slurs were hurled at him as a result of his part-Haitian heritage (Campbell’s mother being of Haitian descent) and also had water thrown on his him during the protest by an assailant who was promptly arrested.

Other government ministers who attempted to meet protestors were also left in shock and disappointed at how vocal the protestors were at the proposed tax increases, and said that they wished to have more of a dialogue as to why these things must take place and it is for the best in the long term.

One video saw minister for national security, Marvin Dames, scurrying away from angry protestors and other videos saw minister for financial services, Brent Symonette, moving quickly into the House of Parliament before giving a brief wave to the protestors.

Members of the opposition PLP also came out and were greeted a bit more warmly than those on the government side, despite the fact that it was their previous administration that first introduced VAT at 7.5 percent after much wrangling and debate to get the finally implemented 7.5 percent down from their administration’s initial 17 percent and then 15 percent VAT proposals.

Ministry of finance officials, inclusive of Turnquest, said it was the former administration’s intention to move forward with the 15 percent had they won office and that his government sought to implement a more modest and workable 12 percent especially if his administration made the necessary cuts in expenditure and cut out the wasteful spending that was bleeding the country dry.

Former prime minister and immediate past minister for finance, Perry Christie, as well as his junior minister for finance, Michael Halkitis, went on record recently and categorically denied the statements that it was their administration’s intention immediately to raise the VAT to 15 percent or 17 percent for this 2018-2019 fiscal year.

With the budget debate continuing to the July 1 deadline for the 2018-2019 fiscal year, sources within the ministry have told Caribbean News Now that the new rates are set and it would be extremely difficult for the government to adjust these new rates and tax-hike proposals prior to the deadline.

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13 COMMENTS

  1. Compare the difference between cowards and non-cowards when you compare the people with Vincentians who stand for anything and everything, even VAT on salt.

    • Absolutely foolish. Every expert will tell you that a low rate of VAT with zero exemptions is best. That is why the IMF described the Bahamas’ original roll out of VAT as the best and most productive in the region and one of the best they had seen in the world. Along come these idiots, without any consultation, against all the advice of economists and showing no empirical data to support them, create a bunch of exemptions and raise the tax to a point it may actually reverse the present growth in the economy.

  2. Organization in Defence of Democracy (ODD), are the ones to blame for the ousting of the NDP in 2001. G.T, you guys are hoping for a reoccurrence, sorry it’s not going to happen. ULP saw an opportunity and took advantage of the situation. Meet us at the polls in 2020 if we live.

  3. I suppose there is a reason for Vincentians to be frightened. The police in SVG are brutal and brutalise the citizens. They beat up people taken to the police barracks and would not hesitate to shoot people on the street if the fat boss man told them.

    Violence against protesters is well known in SVG as are trumped up charges, they are a dirty police force led by a dirty government with dirty leaders.

    The police confiscate anything on the street, banners, even cooking pots and food used by protesters.

    Saint Vincent main island is the most denied of human rights, the people are simply frightened. Not just of the police violence but they know if they are identified as protesters both they and their family will almost certainly lose any government job the may have. Even down to roadside verge cleaning it has been recorded that if a worker is not a member of the ruling Unity Labour Party they cannot have a part time job, and if they protest as well it’s goodnight nurse.

  4. Well, they are gonna BITE the hand that feeds them. Us U.S visitors are already getting ripped off over there too with the 7.5 VAT. Raising it to 12 is gonna keep a lot of people from returning to the Bahamas. It’s too expensive. Turks and Caicos here we come!

    • If price competition were a major factor, the Bahamas would not be in the tourism business. BTW, we have just had monthly increases of tourists of 18 and 20 percent for the last three months, by far the leading growth destination in the Caribbean region, largely because of the opening of Baha Mar – whose nightly rates are $400 and up. I agree that the VAT rise is a bad idea, but do not agree that it will stunt tourism.

  5. I do agree that the VAT. increase is very harsh and high at this time on the working public who is at a disadvantage of being left behind the prosperity curve because of substandard wages being paid, It is not in the best interest of the government at this time to extract more from less, the suppliers are not paying more for their goods, the buying consumer is engine that moves the country forward or backwards.
    The proposed increase for tax on the profits of the gambling houses in the Bahamas much too low, the sliding scale of taxesion is appropriate but the $ amounts should be lower to have a more immediate effect on the revenues being generated by the gaming houses.
    The revenue that is taken in by the government pales in comparison to what it would cost to treat individuals that have become addicted.

    • Although I am not aware of any ‘substandard wages’ being paid in the Bahamas (even among the thousands of immigrants that the country attracts with its wages) I agree that this move should have been preceded by a rise in the minimum wage, as was done by the previous government when it rolled out VAT. Very few workers in the Bahamas are paid the minimum wage (US$ 210 weekly), so it would effect very few employers, as the large employers will tell you. But it would have the effect of pushing up the wage chain in line with the rise in prices.

    • It’s great that you are willing Observer to agree and uphold the goings on attributed to dirty SVG police, dirty ULP leaders and supporters and all the dirty human rights breaches committed in SVG.

      It shows that you Observer are dirty as well, thanks for the confirmation.

  6. What exactly is a near riot. That part is a lie. Bahamians are peaceful…we don’t have riots or near riots….please change that statement because it is misleading to the out side world. Smt

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