By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

DEPUTY Prime Minister K Peter Turnquest, the minister of finance, said the passing of the Grand Bahama (Port Area) Extension of Tax Exemptions Bill 2017, will repeal and replace the Grand Bahama (Port Area) Investment Incentives Act 2016, which is counterproductive to the ease of doing business in Freeport.

Mr Turnquest was speaking at the Bahamas Association of Compliance Officers (BACO) 12th Annual Northern Conference in Grand Bahama.

The bill, which also revokes the Grand Bahama (Port Area) Investment Incentives Regulations 2016, will no longer require licensees of the Grand Bahama Port Authority to apply to the central government to receive any concessions.

The 2016 act was passed under the former PLP administration and was criticised as being bad for business. Before the May 2017 general election, the Free National Movement had promised to repeal and replace it.

“As the government of the Bahamas, we are honouring that commitment,” Mr Turnquest told BACO.

“The entire regime will be done away with when the new bill is passed,” he said.

“Our reason for repealing the act is very simply, it is counterproductive to the ease of doing business in Grand Bahama.

“We believe that Grand Bahama and Freeport need an opportunity to rebound, and this particular piece of legislation did not help us to create the kind of certainty to attract investors here for the long-term. The bill did not help spur investment in Grand Bahama. It did the exact opposite,” Mr Turnquest said.

He indicated that the business application process was viewed by many as introducing extra costs, bureaucracy and uncertainty into Freeport’s investment and business climate because the granting of incentives is at the government’s discretion – and is no longer an “absolute right” under the Hawksbill Creek Agreement.

“There was subjectivity in the process especially as it pertains to reporting requirements imposed on licensees, as well as the Investment Board reviews to ensure granted incentives were being properly used,” he added.

Mr Turnquest explained that the government is making changes because the process was unfair, and not conducive to a stable environment or making Freeport competitive.

He noted that members of the Grand Bahama Port Authority and its licensees complained that requirements under the 2016 Act created uncertainty, instead of fostering growth and stimulating the economy.

Mr Turnquest emphasised that in the new bill, all homeowners, within the port area, will be exempted from real property taxes.

He said “it is important to note this distinction from the 2016 legislative regime where exemptions, including real property tax exemptions, were limited to licensees of the Port Authority only.”

Mr Turnquest stated that the Grand Bahama Port Authority petitioned the government to broaden this exemption, as the uncertainty of real property tax exemption for all homeowners in the port area – especially that for non-Bahamian second homeowners – was of concern.

The deputy prime minister said the revitalisation of Grand Bahama’s stagnant, depressed economy is a priority for the FNM.

He said the FNM government will adopt new measures aimed at accelerating, broadening and sustaining economic development in Freeport and Grand Bahama.