Family Islands urge: ‘tax web shops to the hilt’

Thursday, June 14, 2018

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Family Island businessmen yesterday urged the government to “tax the web shop industry to the hilt” because it has left many communities “in shambles”.

Roderick Simms, chairman of the Chamber of Commerce’s Family Island division, told Tribune Business that Acklins did not want its previous web shop to re-open given the impact it allegedly had on the community’s health.

Mr Simms said residents had informed him that “normal healthy eating habits” had returned to Acklins once the web shop closed, as many islanders had been forced on to a diet of Ramen noodles and soup due to their excessive spending on gaming.

And Mario Cartwright, a Long Island Chamber of Commerce director, estimated that between $150,000 to $200,000 per month was being sucked out of Long Island’s economy by the web shops - a sum he described as “huge” for a 3,000-strong community.

Both men backed the Government’s move to impose tax rate hikes of up to 355 per cent on the sector due to its economic and social impact, especially in the Family Islands, and to rectify the redistribution of wealth from the many into the hands of a few.

“From my point of view the taxation is warranted because the gaming industry has left the Family Islands in shambles,” Mr Simms told Tribune Business. “It has sucked money out of the economy that, one time ago, would have circulated in it.

“It has left families in shambles. Mothers who are addicted are gambling the lot, and sending their children to school with little or no lunch and having to lean on others in the community to fill the void left by their gambling addiction. I’ve seen it on all the islands; every island, every single island. It’s widespread.”

Mr Simms, a regular traveller around the Family Islands in his Chamber role, added: “I was in Acklins recently and they don’t want any web shop there. There was one there, and they’re not interested in it coming back.

“One of the interesting conversations was, when the web shop was there, people were eating Ramen noodles and soup because they were gambling the lot. Now the web shop is not there, normal healthy eating habits have resumed.

“They don’t want a web shop in Acklins. They’re not interested. It’s devastating communities.”

Mr Simms welcomed the Bahamas Gaming Operators Association’s (BGOA) recently-launched education and anti-addiction initiatives, which are intended to supplement those of individual operators, but suggested this had come far too late for many Bahamians grappling with such problems.

He added that many in Nassau were likely unaware of the web shop industry’s effects on the Family Islands, and said: “One time the money used to circulate in these economies, and now it’s leaving. It’s having a devastating impact on these islands.”

The Chamber executive added that, just like alcohol and smoking, gambling is considered a ‘sin’ industry and is heavily taxed in almost every jurisdiction in the world.

Given the burden its activities were imposing on the Public Treasury and the Government’s social security budget, Mr Simms said the Minnis administration was justified in seeking such a jump in the web shops’ tax contribution.

“Hopefully this helps to alleviate some of the burden the Government has had to assume because of people’s gambling addictions,” he explained. “The burden has fallen on social security and the like.

“The Government has had to effectively pick up the tab because of the gaming industry. It is now moving the chairs around and saying: You’re leaving us with a bill, now you pick it up. It’s falling on us as taxpayers.

“If you, the web shops, don’t want to address the chronic gambling issue we’ll step in and do it. You’ve had more than enough time.”

Mr Simms said the web shop industry was sucking money away from other businesses and the productive sectors in what were already-challenged Family Island economies, producing what he described as a “ripple effect” that was depressing commerce and depopulating communities as persons headed to Nassau for work.

“This is a first-hand account,” he told Tribune Business of the problems. “It’s not someone telling me a story. Everywhere I go people are speaking out against it.

“Hopefully the Government and web shop operators come to an amicable solution where all parties are happy, and we are able to address gambling addiction meaningfully and in earnest.”

Mr Simms, though, argued that the Government should have opted for a National Lottery rather than legalise the web shops in 2014. “Neil, I can tell you this,” he said. “What was allowed to have happened should never have happened.

“It should have been a National Lottery. Who allowed them [the web shops] to get away with murder should never have happened. It should have been a National Lottery.”

Mr Cartwright, too, backed a National Lottery as preferable to the current structure where “only a few benefit from the tremendous wealth” generated by the web shop industry.

“I fully support higher taxes on the web shop industry,” he told Tribune Business. “Tax them to the hilt. No one knows the exact impact on Long Island. Some say $500,000 island every month, but I don’t think the economy is that large.

“I think it’s probably $150,000 to $200,000, and that is still a lot of money for an island with a population of only 3,000 people. It’s not good for Long Island. Gambling is like being addicted to drugs. People pay it before they make allowances for the necessities in life, like food and clothing.”

Mr Cartwright said the web shop industry’s rapid Family Island expansion had coincided with the closure of commercial bank branches - events he believed were connected. Royal Bank of Canada’s (RBC) closure this week leaves Long Island with just a Scotiabank facility that is open two days per week.

“It’s horrible for Long Island,” he told Tribune Business. “It sends the wrong message to businesses and investors. It’s not healthy for our economy at all, and it’s very sad that in 2018 we’re going backwards in time it seems.”

The present tax structure requires web shop operators to pay 11 per cent on taxable revenue or 25 per cent of EBITDA (earnings before interest, taxation, depreciation or amortisation), whichever is greater, plus a 2 per cent contribution to community causes - equating to 13 per cent of gross gaming revenues.

However, under the Government’s proposed new ‘sliding scale’, web shops will pay:

Up to $20 million in revenue, a rate of 20 per cent.
Between $20 million and $40 million, a rate of 25 per cent.
Between $40 million and $60 million, a rate of 30 per cent.
Between $60 million and $80 million, a rate of 35 per cent.
Between $80 million and $100 million, a rate of 40 per cent.
Over $100 million, a rate of 50 per cent.

And, in a nasty twist as far as web shop operators are concerned, the Government has also imposed new taxation on gamblers themselves rather than the sector. Patrons, from July 1, will have to pay a 5 per cent Stamp Tax on both their web shop deposits and non-online games/digital sales.

Comments

PastorTroy says...

- QUESTION: How about the devastation brought on by alcohol, cigarettes, sugar, high fructose corn syrup, sodas and sugary drinks, the pharmaceutical pill popping industry, the list goes on and on, BLACK PEOPLE NEED TO STOP HATING ON OTHER BLACK PEOPLE SUCCESS! Massa will not move you out of the fields and into the house for a crab mentality, now, I's free now! Get over it, it's call CAPITALISM, we all have to swim through this sea of crap together, just like the same tons of foreign crap we import from the USA and around the world on a daily basis that LITERALLY LEGALLY KILL OURSELVES AND OTHERS (see some above). Don't blame the 'Number Bosses' blame the Government who legalized it!! It's not personal, it business brother, use that energy in a positive manner for YOU to create something that directly competes AGAINST the number houses, and if you have created something, teach others how to make money. It's exasperating to hear people (Haters) using the Government to get rid of other people's success, business is simply supply and demand, where there is no demand, how can a business survive? Many 'snake-oil sellers' have been getting rich peddling the doctrine of slavery from before independence they have is so good, our privy counsel people dem (former colonizers) had it enshrined in our constitution and the nation is worse off spiritually than on July 10th,1973! Stop trying to fool and control our people with poverty ideologies just to buy that pined striped suit, at the least if they buy a number ticket, they know if they win or lose; with some popular legalize rackets they have to die first to know if they win or lost, after that first lost if they're ignorant to stop by the number man and buy another ticket before nigh service, that's on them! these are not kids, these are grown a$$ adults. It's all personal responsibility, even the 'good book' pride itself on our creator giving us mortal humans, made in HIS (definitely not a her) likeness a choice. It's DINO'S mentality like this what keeps our nation stagnant in this globalized economy; corned beef?? yall better learn French and start filling out them applications for these housekeeping positions.

Posted 14 June 2018, 3:45 p.m. Suggest removal

Porcupine says...

It is unquestionably devasating our Family Islands. The web shops should be shut down.
Start a national lottery where the money goes back into the community it came from.

Posted 14 June 2018, 4:02 p.m. Suggest removal

birdiestrachan says...

Did it ever occur to these people these FNM people that the people do not have
to buy numbers/ if they were to stop buying numbers the web shops will go out
of business. People can sell anything, people do not have to buy, they exercise
their free will. They are grown ups.

you all problem is that the web shop owners are black. Now if they were the Brents
of this country it would be all right.. Liquor has no tax. because doc them have shares
in the liquor business and they are looking forward to their dividends.

Posted 14 June 2018, 4:13 p.m. Suggest removal

sheeprunner12 says...

Even better ......... Close the webshops completely

Posted 14 June 2018, 4:43 p.m. Suggest removal

John says...

When BTC brought cell phones to the islands it also sucked MILLION$ out the Bahamian economy. BTC was on everything. But once people got used to cell phones many switched back to bubblers. Some got rid of their phones completely because 'dey don't call no one and dey dont wan't no one calling dem." Once persons get used to the web shops, they will be just like any other business in the community. In fact many will no longer be able to make a profit (especially with the new tax regime), so they will close shop and move away.

Posted 14 June 2018, 5:43 p.m. Suggest removal

pablojay says...

This is my response to "Pastor Troy" It is so sad to see a fellow black man think like the way you
do. Firstly , if the web shops were owned by white people , you would be screaming for the
government to close them down for what they are doing to poor black Bahamians.Secondly , all
the evidence is there, showing the massive negative effect that they are having throughout the
Bahamas,but it is okay because a handful of our brothers are making good to the detriment of
countless thousands of our brothers and sisters. Thirdly, you can only drink and eat so much,but
you can gamble all day and night , at home or work, with your money for groceries,utility bills,
children's school fees,mortgage or rent,child support money,tithes,credit cards and any other
financial commitment .But then again,just like black Americans,we only complain when the
white man kills us.

Posted 14 June 2018, 6:04 p.m. Suggest removal

Firstly: you are incorrect, I would feel the same, maybe because of our demographics and the way it (legal gambling in Our Bahamas) was implemented, even worse, I've lived many years in a predominantly white country, I do not naively gravitate towards 'whiteness' I love and promote blackness and black empowerment of all age, color hue & genders. Secondly: It's call capitalism, and it's legal, just like the liquor industry wrecking havoc on black, poor and indigenous people since moonshine was illegal now it's legal. Thirdly: Gambling all day and night is an ignorant irresponsible choice, not a requirement to live, on the other hand, eating lots of leafy greens and avoiding commercial meat and drinking lots of (water) is a requirement to live a more healthy life for a long time. I think you need to read my post again, especially the first five sentences and the part about importing crap from the USA and other foreign countries. Gambling is not a requirement to live! Stop giving them your hard earned money and the number boys will go out of business. No demand, no supply, however I understand the psychologic effect of trying to win money, but fool me once shame on you, fool me twice shame on me. We should have a national lottery IMHO, with proceeds going towards better education on all levels IN THE BAHAMAS, the liquor industry should be heavily taxed just like the number boys and revenue go towards our healthcare and hospitals and furthering science and research IN THE BAHAMAS, rather than drinking your liver away and paying THOUSANDS of BAHAMIAN DOLLARS to hospitals in Miami to get well. This is not a 'clap back'. I wish you peace.

Posted 14 June 2018, 6:56 p.m. Suggest removal

Sorry Pastoroy,
I agree with Pablojay.
Oppression is oppression.
The numbers house owners, of any color, are oppressing Bahamians.
If a business owner is green and has wings, I don't mind, so long as they are not oppressing people.

Posted 14 June 2018, 8 p.m. Suggest removal

I agree my brother/sister opression is oppression. see my response below.

Posted 15 June 2018, 10:27 a.m. Suggest removal

thompson68 says...

That is so true

Posted 14 June 2018, 11:23 p.m. Suggest removal

AMEEENNN!!!

Posted 14 June 2018, 11:22 p.m. Suggest removal

By the way,
Thanks Mr. Simms for taking the high road and speaking the truth.
We have a long way to go in this country, but without the truth tellers we'll stay right where we are.
To the delight of the dinosaurs.

Posted 14 June 2018, 8:02 p.m. Suggest removal

IMHO, here is my observational unbridled truth: The number boys, the liquor industry, the pharmaceutical industry, the banking industry, Lawyers in politics etc. they're all taking advantage of peoples’ ignorance and desperation, (Google free market capitalism) but they are all made legal and regulated by the elected Government OF the people, BY the people of THE COMMONWEALTH OF THE BAHAMAS. (Google capitalism definition/history) I sympathize with those being taken advantage of, however, these businesses are not mandated by our Government to be used on a daily or hourly basis, these businesses offer a legal product to the marketplace, we have free will to either walk into that establishment and be a patron or keep moving along. The Bahamas is not a daycare, we are part of a globalized economy and we’re small potatoes. We must teach our people that the choices we make on a daily basis determine our success or our failure. If a homophobic adult pastor walks into a gay bar have a few drinks, got drunk start ‘making out’ with the patrons and someone decides to snap some pictures of it upload it to social media all the 'fun' they're having, then come Sunday morning their church is empty and now he/she can’t pay their bills whose fault is it? the bar? the patrons? the fun? the persons who snapped the pictures and upload it, oh, it’s the devil’s liquor? Noooo! It’s the pastor's deliberate actions. Coincidentally many people who gamble are AGAINST gambling theoretically, but gamble anyway, it’s the hypocrisy and the 'gall' they have of not taking personal responsibility for their actions. But if they win??? THANK YOU, JESUS! if they lost, this is the devil close it down! (((IT'S CALLED GAMBLING FOR A REASON))) Gambling has been going on in the Bahamas for decades, we live RIGHT NEXT TO FLORIDA! Ever heard of the Florida Lotto? Gambling in The Bahamas should have NEVER been legalized for private individuals, but instead, it should have been a national lotto that directly uplifts and give back to the same community it profits from, but the backward, regressive, uneducated, predatory religious gangsters counsel would ‘pelt dem with fire and brimstone’, but don't blame the capitalist for taking advantage of a money-making void in the marketplace (AKA your hard earn money), that's the job of a capitalist no matter their race, creed or nationality.

Posted 15 June 2018, 10:25 a.m. Suggest removal

Cont'd. Look at the pills commercials on television, ever listen to the legally stated side effects? some include death, suicidal thoughts AND PEOPLE STILL TAKE THEM!!! Die and their family still try to sue! Why? because they are legal? NO! people are too comfortable and entitled and like to blame others rather than taking personal responsibility for their own actions! We’ve become too comfortable and always looking for that quick fix, I will admit our anemic decades-old educational system heavily contributes to mass poverty in our nation. We live in an information age, get off the computer scrolling on Facebook minding other people’s business and take care of your own, EDUCATE YOURSELVES! YouTube is FREE! Some have been going to church since they were born 7 days a week plus twice on Sundays and still gambling! What if it was mandated to go to school 7 days a week plus twice on Sundays? That government would be voted out! ALL OF THEM! This is the Government's fault for making gambling for an unfamiliar mass legal in the first place, most of the current/former Government officials are BOTH profiting FROM the ‘demise’ of the social fabric of our Bahama land; they profit from liquor, gambling, pharmaceuticals, predatory banking, some (most are/was a lawyer) even DIRECTLY profit from ILLEGAL DRUGS and CRIME!. This is why crime won’t get any better, YALL BETTER WAKE UP! What needs to happen is the Government now should become the number boys competition, create a better product for the marketplace and watch them (the number boys) shut their doors one by one, but there is an obvious conflict of interest, and this may never happen. Keep hoping and praying, ever heard of the NRA? Marjory Stoneman? Columbine? Etc, I rest my case. I love and wish all my Brothers and Sister PEACE.

Posted 15 June 2018, 10:26 a.m. Suggest removal