A foreign dive operator’s offer to pay double the legal charter fee has been rejected by his top Bahamian counterparts, who argue that this sum pales against the “30 per cent or more of revenue” that they pay in taxes.

Captain W. Scott Smith, of the US-registered Dolphin Dream vessel, in a March 21, 2015, letter to the Ministry of Tourism pledged to “voluntarily” pay an 8 per cent charter tax to show he was serious about paying his ‘fair share’ in taxes to the Bahamas.

He expressed hope that this would “smooth things over” with the Bahamas Diving Association (BDA), which had previously demanded that the Government stop issuing charter permits to any rival foreign vessel.

However, the response by BDA president Neal Watson, seen by Tribune Business, suggests that Captain Smith has failed in this objective.

Reiterating the BDA’s call for Captain Smith and the Dolphin Dream to switch countries and establish operations in the Bahamas, Mr Watson said the taxes and fees paid by local dive operators equated to over 30 per cent of their revenues - “nowhere close to the 8 per cent you offered”.

The row between Captain Smith and Bahamian dive operators erupted after he copied to this newspaper a letter in which he blamed his decision not to renew his BDA membership on “inflammatory and insulting” statements by its leadership regarding foreign charter vessel operators.

Captain Smith said he and the Dolphin Dream paid all due taxes, more than $50,000 per year, to the Bahamian government, suggesting that all foreign dive vessels should not be tarred with the same brush.

Striking a much more conciliatory tone in his latest missive, Captain Smith said: “I understand the Bahamas Diving Association’s concerns, and I do believe they have valid points........

“I don’t have a problem with paying higher taxes. This is part of life. Taxes go up and governments need their money. I feel sorry for Bahamians that they have to pay the 7.5 VAT tax; this is a heavy hit for all.

“The problem, I think, is legislation takes time and new foreign charter vessel taxes and fee legislation will take time to enact. I know it’s coming and I know it would be more fair if I pay more taxes.”

Captain Smith then added: “I don’t want to be controversial or have problems; I just want to continue to do the same thing I have been doing since 1986.

“I have an offer, in hopes of smoothing things over with the BDA, and showing the Bahamas Government I’m serious about paying them revenue. I am willing to voluntarily double my current tax rate of 4 per cent and start paying 8 per cent charter tax, and after the Bahamas laws change I will pay whatever they tell me to pay.”

Captain Smith’s attempt at an ‘olive branch’ appears not to have been accepted by the BDA or its members.

In reply, Mr Watson wrote that Captain Smith and the Dolphin Dream had been BDA ‘non-voting members’, as the organisation’s Articles of Association limit voting members to Bahamas-based and licensed operators.

The BDA’s officers and directors last year “unanimously voted” to stop foreign operators from acquiring non-voting membership, and Mr Watson told Captain Smith: “I don’t think you quite grasp the issue.

“You are a citizen of another country, operating a business based in another country, with a vessel registered in another country that has a crew from another country, and feel you are entitled to operate your foreign-based business in the sovereign country of the Bahamas in direct competition with Bahamian businesses, without complying with the same laws and regulations that is required of a Bahamian citizen.”

Captain Smith would likely dispute that last assertion, but Mr Watson said research by an attorney hired by the BDA suggested the 1991 Foreign Charter Boat legislation did not allow foreigners - even with a charter boat permit - to compete with Bahamians in the provision of full service dive and snorkel businesses.

Questioning whether the Dolphin Dream’s crew had the necessary work permits to operate in the Bahamas, Mr Watson concluded: “As stated before, the Bahamas Diving Association would welcome your membership application should you decide to move your dive business to the Bahamas, establish a paying Bahamian-based business, register your boats in the Bahamas, pay duty on all your equipment, hire Bahamian boat captains and crew, properly license and pay all of the taxes and fees required by a Bahamian business.

“By the way, these expenses typically are in excess of 30 per cent or more of a company’s revenue in the Bahamas, nowhere close to 8 per cent you offered. “