By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Web shop operators are “uncomfortable” that they have to make a full financial disclosure on their businesses during the transition to regulation despite having no guarantee they will obtain a licence to continue operating.

Attorney Wayne Munroe, who represents several webshop operators, also described the higher tax rates and fees to be paid by web shop operators in comparison to hotel casinos as a “bitter pill to swallow”, but one they were prepared to make to secure their future.

“The Government is taking a shrewd approach. Firstly, to operate during the transitional period, you have to make full and frank disclosure under oath. Then you have to pay all your back Business License under declaration,” Mr Munroe said.

“The Government will be collecting all this money, getting all this information and hasn’t committed to anyone doing it to getting a license. That is a matter we are uncomfortable with. We made representations about it but they clearly weren’t accepted.”

Tourism Minister Obie Wilchcombe, who has responsibility for gaming, recently said the number of web shop licenses that will be issued is to be determined after a financial audit of the various operators has been conducted.

Mr Wilchcombe told Parliament last week that there will be a fixed number of web shop operator licenses, as well as web shop premises licenses. Licenses will be granted under a detailed criteria that will be outlined in a tender process the Government is poised to launch.

This will contain minimum requirements for the licensing of web shops, and be used as the platform to manage the application and licensing process.

The Gaming Bill, which was tabled last Wednesday, proposes that the holder of a gaming house license be subject to either an 11 per cent tax rate on their revenue, or 25 per cent of earnings before interest, taxes, depreciation and amortisation (EITDA)are deducted, depending on which is higher.

Mr Munroe said: “The fees, when you do a straight line comparison, are higher than the fees for the hotels for the same thing. It doesn’t take a rocket scientist to figure out that the Government is trying to demonstrate to the rating agencies and the IMF that this is a new source of revenue.

“My clients take a very simple view. It is discriminatory, we are not too happy with it, but we are Bahamians. It’s in our interest that the economy of the Bahamas does well.”

Mr Munroe added: “My clients are looking at this as a sacrifice that they have to put up with, being taxed at a higher rate of tax than the casinos, and they are going to put up with it and swallow the bitter pill with a long-term view that this helps turn the economy around.

“We are encouraged because the minister responsible for gaming is making it clear that the tax scheme is not written in stone. I understand the Government is trying to extract the maximum amount of money and information, but that has to be balanced against the ability for people to make sensible hiring commitments because web shep operations will look completely different.”

The Government also plans to make the taxation of web shops retroactive to July 1, 2014.