Bahamasair discounts undermine local retail


Tribune Business Reporter

BAHAMASAIR has been accused of undermining local retailers through its 'shop in Florida' specials, with Customs facing an "almost impossible" task to prevent tax evasion and smuggling.

The Bahamas Federation of Retailers (BFR), in again calling for the Government to make local apparel, shoes and fashion retailers price competitive through duty elimination, argued that other corporate elements - especially the banks - were reinforcing the "entrenched cultural mentality" that shopping abroad is better.

"The Bahamas faces a unique predicament in retail based on its proximity to the US," the Federation said in a recent statement. "Unlike other Caribbean islands and destinations with more challenging logistics, the US is a mere 30-minute flight away, and shipping from online or a Florida based store is relatively cheap for the individual end consumer.

"Additionally, smuggling is rampant whether via a cargo vessel, private yacht, commercial or private airplane, or corrupt freight forwarders, as has been the case in recent times. Bahamasair, our national airline that uses millions of our tax dollars yearly, advertises 'shop in Florida' specials with discounted rates on the number of bags Bahamians can bring back.

"When those purchases in those bags are apparel, fashion accessories, shoes or other small and easily portable gift items, much of what is brought in from these 'shop in Florida' trips are claimed as 'personal effects' at the border and, understandably, it is almost impossible for Customs to police. In addition to the airline, Bahamian-based banks regularly advertise loans and credit cards for 'shopping abroad'. That is how entrenched this mentality is in our culture."

The Federation argued that the Bahamas' 'archaic' duty structure made it "impossible" for Bahamian apparel and fashion merchants to price at competitive levels, resulting in lost commerce and government taxes as Bahamians increasingly shopped online or abroad.

"In most cases, the Government then fails to collect the duty and VAT that otherwise would have been collected if they had shopped locally with Bahamian-owned and operated businesses that employ people locally and pay their taxes," the Federation added.

It argued that eliminating import duties for apparel, shoes and fashion accessories in the Bahamas "will not only improve the competitive ability of local Bahamian wholesalers and retailers, but will also have the long-term benefit of boosting domestic consumption, thus improving private sector employment as well as VAT revenue to the Government".

"The more money spent in the Bahamas on retail goods, the more money to go around in our economy, the more jobs created, more taxes generated, less government spending on social services, and the greater our GDP growth," the Federation said.

The BFR estimated that the Bahamian economy loses roughly $2 billion worth of business to online shopping and/or Florida, and a significant percentage of that amount goes completely untaxed by the Government due to smuggling by Bahamians and expatriate residents alike.

"The country is bleeding not just domestic business and the employment that business generates, but millions upon millions in tax revenue as well," the Federation warned. "The stark reality is that our archaic duty structure pushes local shelf prices beyond consumers' expected online and/or Florida prices, which can be accessed and compared at the push of a button on any smartphone.

"The problems facing the global retail sector are only exacerbated in the Bahamas where the high cost of doing business and high import duties further disadvantage local retailers. High Customs duties put undue pressure on the pricing structure, which burdens consumers with unnecessarily high prices.

"Additionally, the high import duties are extremely prohibitive to the retail sector's ability to bring in sufficient assortments without taking huge inventory risks. This again pushes people to shop abroad as they complain that choice is limited locally. Without these high import duties, local apparel and shoe retailers could charge a regular margin and thus mark-down and turn over inventory on the standard fashion cycle bringing in greater updated assortments. However, the current import duty rates make it impossible to price at competitive levels or carry a sufficient selection of merchandise."


DDK says...

The statement from The Bahamas Federation of Retailers is right on and we should challenge the current Government to comply with its very valid suggestions. As the global cost of goods is rising with no end in sight, abolition of the duties, combined with the cessation of illegible shops, particularly in the illegal shanty-towns, and the closure of "web" shops, is probably the ONLY chance legal commerce has of surviving in The Bahamas.

Posted 12 February 2018, 2:07 p.m. Suggest removal

observer2 says...

Please don't take away Bahamasair's discounted flights to Miami, cheap hotel and car deals, discounts on baggage and $300 twice a year duty exemption.

It is the only relief poor black Bahamian's get from the Bay Street Boy's cheap Chinese crap, over priced goods, lack of selection, broken down stores, bumpy roads, crime invested streets, VAT, over priced shipping cost with only one monopolistic port of entry (Arawak) overcharging everyone to benefit of the Baystreet/Government owners.

I just love Miami. Nice Mall's (instead of broken down Malls), helpful clerks in shops, Bahamian's are welcomed in these stores because they know we are spending $2 billion a year in Florida so we are treated well. After shopping all day we can go to nice hotels, restaurants and maybe a nice basket ball game. While visiting our child in really nice colleges and universities...compared to you know what. Then we can go to a nice hospital and get quality medical care unlike the hospital in Nassau that is overcrowded and you have to wait 18 hours to get served in Emergency.

Some currency exchange house even use to take Bahamian dollars at 75 cents on the dollar so you can buy your superior goods in the US.

We just love our new Bahamasair planes and luggage discounts. Please please don't take this away from us. Stop listening to the merchant class and leave use poor people alone.

Posted 12 February 2018, 3 p.m. Suggest removal

Gotoutintime says...

Observer, did the "Bay Street Boys really cause all the problems to which you refer---Perhaps you should do like I did and get the hell outa Dodge!

Posted 12 February 2018, 3:49 p.m. Suggest removal

hrysippus says...

has Nassau ever thrived as a city engaged in purely legal commerce? It was booming as pirate town, made people rich when the privateers came in to resell their captured cargoes. Merchants and Sea captains got rich running the blockade to keep the Confederates supplied during the American Civil War, Plenty Bahamian families got rich running rum and liquor during prohibition years, smuggling Chinese during this time as well, but we don't talk about that and who did it. How many houses were built in the 198o's on the back of a night-time run across the Gulf. Why did Robert the Vesco end up in Nassau, yep, tax evasion, and off=shore money laundering. Thousands of well paid citizens have worked in off shore banks which were designed to minimize the lawful taxes paid by corporations and wealthy individuals. Stafford Sands, KCMG, and Harold Christie, KCMG, built the foundation of the largest legal sources of wealth that the country still has today. Otherwise we too would be migrating in homemade sloops with sails made out of used PVC banners.

Posted 12 February 2018, 3:10 p.m. Suggest removal

DEDDIE says...

Stop marking up your items by 100 - 300 percent and then I will shop at home. I don't have a problem with a retailer making a reasonable profit. A gallon of milk in the US cost about $2.50. The same gallon cost $6.

Posted 12 February 2018, 3:17 p.m. Suggest removal

ashley14 says...

Absolutely I don't see how you guys make end meet at all with the high cost of living and unemployment being so high. It is the cause of the crime rate.

Posted 12 February 2018, 7:15 p.m. Suggest removal

TheMadHatter says...

It is time for the Bahamas to petition the USA to make us the 51st State. Puerto Rico and St. Thomas have both been offered the opportunity numerous times - and both have refused. Let their loss be our gain.

Of course, this idea will be opposed by those who believe we are "independent", and they will tell you this while they are holding a Big Mac in one hand and a Coca Cola in the other hand.

Posted 12 February 2018, 3:55 p.m. Suggest removal

TalRussell says...

Ma Comrades, resurrect the building of a bridge connecting Abaco and Grand Bahama - declaring the islands are returning back to England as full pledged colonies. God save da Queen!

Posted 12 February 2018, 4:46 p.m. Suggest removal

TheMadHatter says...

Doesn't make sense to return to British Rule - because Britain is now ruled by Muslims. If Trump gets ousted, then even USA will become ruled by Muslims (it's almost there now actually) - so my plan would be useless as well.

Posted 12 February 2018, 4:56 p.m. Suggest removal

Gotoutintime says...

She does not want any part of us!

Posted 12 February 2018, 7:34 p.m. Suggest removal

BONEFISH says...

High prices and poor selection of goods.Internet shopping and shopping trips aboard is how many families are surviving in this country

Posted 12 February 2018, 7:04 p.m. Suggest removal

sheeprunner12 says...

If anyone believes that losing $2Billion each year to the world in personal consumer shopping will benefit OUR country ......... think again!!!!!!!

Posted 12 February 2018, 7:19 p.m. Suggest removal

truetruebahamian says...

Internet shopping and home delivery has been affecting the brick and mortar shops to some degree in the U.S. - people complain that retail is suffering with all of the production costs (rent utilities wages taxes) but its popularity is only one sector. Most retail and walk in wholesale shops do well when applying changes to their business formula. There are no real downsides, just excuses and scrambling to find somewhere to point blame when too lazy to figure out how best to use trends to benefit the retail industry.

Posted 12 February 2018, 7:20 p.m. Suggest removal

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