Thursday, November 8, 2018
By NATARIO McKENZIE
Tribune Business Reporter
Bahamian companies may have to look at cutting staff amid increased taxes and rising energy costs, a Chamber of Commerce executive yesterday asking: "How are we going to survive?"
Debbie Deal, chair of the Chamber's energy and environment committee, queried how businesses can survive escalating energy costs with the proposed Shell multi-fuel power plant some three-four years away.
"How are we going to survive the next two to three years?" she asked. "We have VAT that went up to 12 percent from 7.5 percent in July. They are talking about NHI (National Health Insurance) and this payroll tax; how are we going to survive? Businesses will have to start laying people off. That is how I see it."
Ms Deal added: "We have Christmas coming. Businesses generally hire more staff at Christmas, but if energy bills are going to be three times' more how are we going to end up, as a business community, dealing with that? It's not looking good right now."
Dr Hubert Minnis yesterday offered a slight reprieve to BPL's low income households yesterday, as he raised the VAT electricity bill exemption threshold from $200 to $300.
"Given the circumstances that have given rise to the temporary spike in the fuel surcharge component of consumer's electricity bills, the Government is mindful of the impact that this increase has on all Bahamians but especially on the poorest and most vulnerable," the prime minister told the House of Assembly yesterday.
"This situation is a legitimate issue for every Bahamian. However, there are a small few who are seeking to make political mischief out of a serious situation who know full well the set of circumstances that have built up over several decades and have led to this point, and who also know that this administration is the one putting in place the plan to address it.
"The Government in the 2018/2019 budget provision made allowance that would exempt Bahamians whose monthly bills were under $200 from the payment of VAT. This was and remains a deliberate policy initiative to assist Bahamians of modest means," continued Dr Minnis.
"This recent temporary spike in the fuel surcharge has unfortunately put a number of the qualifying customers over the $200 threshold. I today advise the House that the Government will be moving an amendment to the law to allow for a temporary increase in the VAT exempt threshold from $200 per month to $300 per month to the end of the fiscal year, that being June 2019.
"This will be made effective for December 2018 and will show up in the January billing cycle. The trends in the cost of the delivery of electricity will inform any decision to extend the increase in the exemption ceiling into the new fiscal year beginning July 2019."
Ms Deal said that given the current situation, "anything is a help right now", but she questioned what relief the business community could expect. "How will $100 extra help? It will not help businesses at all unless you are a very, very small business," she said.
"Who will help us in the interim? It's great for persons who have very low bills in the first place, but it's not going to help the business community."
Dr Minnis said that as result of fires at the Clifton Pier Power station, two generators were damaged, taking about 70 megawatts (MW) of production capacity off-line. This has resulted in Blue Hills power station being used to make up the shortfall, albeit with its more expensive fuel.
"Clifton utilises Bunker C, which is by far cheaper than what is utilised at Blue Hills, diesel, which is over $5 per gallon," Dr Minnis said. "I have requested the minster responsible for BPL and the BPL team to review and report back to Cabinet on the full range of options open to the Government to address this temporary spike in electricity bills, even as we execute the longer term strategy to reduce energy costs on The Bahamas.
"I wish to reassure the Bahamian public that we remain resolute in the need for the country to substantially reduce its energy costs and the undue burden it places on Bahamian citizens and the cost of doing business in The Bahamas. We will continue to explore a reduction of energy costs. We will make a substantial transition to solar and other renewable energy supplies."