chancellor
07-29-08, - 05:28 PM
http://www.thenassauguardian.com/bixex/302027229970400.php (Nassau Guardian story)
By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com
A Guardian Business report has uncovered an emerging threat to an increasingly important segment of the country's tourism industry — the government's move to apply a 10 or 45 percent for each and every part visiting boaters import while in this country, even on equipment needed for emergency repairs.
Over the weekend, Prime Minister Hubert Ingraham moved to allay the concerns of those boaters and the local repair industry that in large part relies on them.
"If a boater needs a part in The Bahamas and they have to pay for it and bring it in, they can apply for a refund for that customs duty," he told Guardian Business Saturday. "What we didn't want to do is continue a system that allowed people to say, 'this is for a boat that is broken down in Abaco and it is really for a boat that I am selling'."
While he asserts those cruise permit holders can apply for the refunds at the very same customs counters they'll lay down their payments, that may not be enough to stem a loss of business for the mechanics making the repairs or the many more of us who'll serve those boaters in our tourism centers. Already, more and more of those sailors are setting course for other Caribbean waters.
For now, there are about 24,000 cruise permits in action and overwhelmingly held by Americans. Depending on the size of their boat, they'll have paid anywhere from $300 and up to sail into Bahamian waters and, if they elect, keep those vessels here for an entire year. Just holding that permit has traditionally been enough to block taxes on most parts. Under the current system, boaters can automatically re-apply for a second 12-month permit, although extending those privileges for a third year requires them to submit to an investigation to in part determine if they aren't in fact running the kind of clandestine business Ingraham is seeming to stamp out.
"I had a friend who was shocked this week when he was told he would have to pay $1,000 in tax for an emergency part," one permit holder, Jacques LaFrambroise told Guardian Business last week. "He didn't know whether it was true because of course he never had to pay taxes on that type of part before."
While most of the parts for the inner working of an engine will now be automatically taxed at 10 percent, the vast majority of marine parts will in fact attract a much heftier 45 percent. It's a daunting amount considering just how frequently boats break down, even those with only five or six years on them. The cost attached to often necessary parts can climb into the tens of thousands of dollars.
In fact, according to LaFrambroise, a Montrealer, who has been sailing Bahamian waters for more than six years, the word "boat" jokingly stands for 'better open another thousand.'
"This tax change may create apprehension in the minds of some tourist boaters, but it will be most felt by the Bahamian repair companies — as I walk around Nassau marinas it's mostly tourist boats I see so that's what (sustains) their business," said LaFrambroise.
He suggests that visitors will opt to use their insurance coverage to have their vessels towed to Florida in order to avoid paying our higher tax rates. The steeper the repair and part costs the more likely they are to follow through on that threat, said LaFrambroise. It may take only a few of those kinds of negative experiences to seriously impact this country's boating industry, given how tight-knit those mariners are.
Montrealer LaFrambroise is representative of the benefits that grapevine has had in growing the number of North Americans increasingly drawn to this destination. The Bahamas in now, in fact, in the middle of a marina boom.
The Ministry of Tourism director responsible for boating, Earl Miller, points to more than 100 new boating slips expected to be added to the national pool over the next year.
Most are attached to marinas, themselves, increasingly in demand as Florida berthing spots become all but impossible to anchor down. The Sunshine State has in fact declared a moratorium on new marinas.
The Bahamas, because of its proximity and its beauty, is seen as the second best option for those marine enthusiasts, generally well-heeled and contributing considerably more per stay than their pedestrian counterparts.
Only part of that iapplies to LaFrambroise for whom The Bahamas if very much his first choice.
"It will take a lot more than tax to keep me from loving The Bahamas," he said.
APART FROM MARINAS, WOULD THIS NOT BE BAD FOR PLACES LIKE BRADFORD MARINE IN FREEPORT THAT REPAIRS YATCHS AND IS CURRENTLY EXPENDING FOR BIGGER BUSINESS?
WHAT ABOUT THE GB SHIPYARD?
By VERNON CLEMENT JONES, Guardian Business Editor, vernon@nasguard.com
A Guardian Business report has uncovered an emerging threat to an increasingly important segment of the country's tourism industry — the government's move to apply a 10 or 45 percent for each and every part visiting boaters import while in this country, even on equipment needed for emergency repairs.
Over the weekend, Prime Minister Hubert Ingraham moved to allay the concerns of those boaters and the local repair industry that in large part relies on them.
"If a boater needs a part in The Bahamas and they have to pay for it and bring it in, they can apply for a refund for that customs duty," he told Guardian Business Saturday. "What we didn't want to do is continue a system that allowed people to say, 'this is for a boat that is broken down in Abaco and it is really for a boat that I am selling'."
While he asserts those cruise permit holders can apply for the refunds at the very same customs counters they'll lay down their payments, that may not be enough to stem a loss of business for the mechanics making the repairs or the many more of us who'll serve those boaters in our tourism centers. Already, more and more of those sailors are setting course for other Caribbean waters.
For now, there are about 24,000 cruise permits in action and overwhelmingly held by Americans. Depending on the size of their boat, they'll have paid anywhere from $300 and up to sail into Bahamian waters and, if they elect, keep those vessels here for an entire year. Just holding that permit has traditionally been enough to block taxes on most parts. Under the current system, boaters can automatically re-apply for a second 12-month permit, although extending those privileges for a third year requires them to submit to an investigation to in part determine if they aren't in fact running the kind of clandestine business Ingraham is seeming to stamp out.
"I had a friend who was shocked this week when he was told he would have to pay $1,000 in tax for an emergency part," one permit holder, Jacques LaFrambroise told Guardian Business last week. "He didn't know whether it was true because of course he never had to pay taxes on that type of part before."
While most of the parts for the inner working of an engine will now be automatically taxed at 10 percent, the vast majority of marine parts will in fact attract a much heftier 45 percent. It's a daunting amount considering just how frequently boats break down, even those with only five or six years on them. The cost attached to often necessary parts can climb into the tens of thousands of dollars.
In fact, according to LaFrambroise, a Montrealer, who has been sailing Bahamian waters for more than six years, the word "boat" jokingly stands for 'better open another thousand.'
"This tax change may create apprehension in the minds of some tourist boaters, but it will be most felt by the Bahamian repair companies — as I walk around Nassau marinas it's mostly tourist boats I see so that's what (sustains) their business," said LaFrambroise.
He suggests that visitors will opt to use their insurance coverage to have their vessels towed to Florida in order to avoid paying our higher tax rates. The steeper the repair and part costs the more likely they are to follow through on that threat, said LaFrambroise. It may take only a few of those kinds of negative experiences to seriously impact this country's boating industry, given how tight-knit those mariners are.
Montrealer LaFrambroise is representative of the benefits that grapevine has had in growing the number of North Americans increasingly drawn to this destination. The Bahamas in now, in fact, in the middle of a marina boom.
The Ministry of Tourism director responsible for boating, Earl Miller, points to more than 100 new boating slips expected to be added to the national pool over the next year.
Most are attached to marinas, themselves, increasingly in demand as Florida berthing spots become all but impossible to anchor down. The Sunshine State has in fact declared a moratorium on new marinas.
The Bahamas, because of its proximity and its beauty, is seen as the second best option for those marine enthusiasts, generally well-heeled and contributing considerably more per stay than their pedestrian counterparts.
Only part of that iapplies to LaFrambroise for whom The Bahamas if very much his first choice.
"It will take a lot more than tax to keep me from loving The Bahamas," he said.
APART FROM MARINAS, WOULD THIS NOT BE BAD FOR PLACES LIKE BRADFORD MARINE IN FREEPORT THAT REPAIRS YATCHS AND IS CURRENTLY EXPENDING FOR BIGGER BUSINESS?
WHAT ABOUT THE GB SHIPYARD?