By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

ABACO and East Grand Bahama have been declared special economic recovery zones, Prime Minister Dr Hubert Minnis announced yesterday, as he outlined several tax exemptions, waivers and concessions for residents seeking to rebuild life in the aftermath of deadly Hurricane Dorian.

These areas are to be designated as such for an initial period of three years, Dr Minnis said.

His tent city plan for storm victims also will be completed within three to four weeks, with Dr Minnis telling The Tribune the nation will have to “pray to God” that the initiative is not disrupted by another serious storm.

The cities are a part of a newly developed housing plan to relocate evacuees now living in emergency shelters in New Providence and Grand Bahama.

The economic recovery zone plan will feature duty-free purchases of all materials, fixtures, furniture, vehicles and equipment for all business and residential construction and rehabilitation efforts. The provision will be extended for domestic purchases.

Further, the government is waiving business licence and real property tax fees within the zones. This applies to eligible properties that are reconstructed, restored or otherwise are inhabitable by October 2020.

Dr Minnis said he plans to return to Grand Bahama on Wednesday to view recovery efforts. At that time, a heads of agreement for a new cruise port on the island will be signed with Carnival Corporation. He said it was more vital than ever to continue economic development particularly in Grand Bahama.

“For the communities of East Grand Bahama, Abaco, and the surrounding cays to get back to their former levels of social and economic vitality, it will be critical for the government to move with determination and haste to establish the right environment needed to restore commerce in the affected areas,” Dr Minnis said during a press conference at the Office of the Prime Minister.

“Once commerce recommences, displaced residents can move back home with jobs and with economic opportunities. These communities must be restored to the economic and social vibrancy they enjoyed before Hurricane Dorian.

“We must do all that we can to ensure that this happens as soon as possible.

“Accordingly, to facilitate the required social and economic recovery on the islands impacted by Dorian, I am pleased to announce that East Grand Bahama, Abaco, and the Abaco Cays, will be designated as special economic recovery zones for an initial period of three years.

“This designation – modelled after what is already in place for the Over-the-Hill initiative – will enable the communities impacted by Hurricane Dorian to benefit from a broad range of tax breaks and incentives.

“They will also benefit from other means of support that will restore the various economies, and indeed, over time, make these economies more vibrant.”

The government will also extend a VAT credit of up to 50 percent on the sale of real property.

However, the concession is only provided that such a sale will be immediately followed by material construction on or enhancement to the property. To maintain the credit, the qualifying activity must commence within 75 days of the close of the sale and has to be followed through to scheduled completion. Otherwise the full VAT becomes payable.

Another measure to support recovery and rebuilding in the zones is the establishment of $10m loan guarantee and equity financing programme.

Dr Minnis said this will allow qualifying Bahamian small and medium sized businesses to secure up to $500,000 in financing to fund the restoration of businesses, or the creation of new businesses.

Asked how the government would fund this initiative, Dr Minnis said: “When there are disasters like this and emergencies, governments must make decisions as to how to move and prioritise matters moving forward.

“We will reprioritise what our commitments are and ensure that those two economic engines are restarted.”

Other concessions include the establishment of a business assistance one-stop-shop on both islands along with the extension of the provisional business licence programme to all businesses.

The latter measure will have limited exceptions within the zones to allow for qualifying businesses to get started with their businesses within two business days of completed application.

The centre will house representatives of the Small Business Development Centre, Ministry of Finance, Bahamas Investment Authority, Department of Inland Revenue, Department of Environmental Health and building permits units of the various agencies.

This centre will be equipped and empowered to ensure that all existing and new businesses will be able to work through any regulatory requirements within five working days, Dr Minnis said.

For the duty-free purchases of commercial items and construction materials, Dr Minnis said government was taking steps to ensure that Bahamian wholesalers and distributors benefit from these provisions so that those who want to access the concessions will be able to buy locally.

Those with approved projects in the special zones also will be able to buy their goods in New Providence and elsewhere – through participating vendors – and be able to obtain duty-free prices.

Noting that the aim of this exercise was to facilitate and encourage economic activity and development, Dr Minnis said it is foreign land holders in the Family Islands who are subject to Real Property Tax will only qualify for this exemption if their developed properties are up to standard, or if they are taking the steps to repair and refurbish their premises to get them back to standard.

Properties that are not repaired or refurbished will not benefit from this concession. Undeveloped properties will not benefit from this concession.

“The government wants the business communities in the affected islands to know that we will support them in the most direct of ways to get them up and running again. The government recognises though, that it must make it as easy as possible for Grand Bahamians and Abaconians to both get back in business and to access these financial facilities.

“To minimise the possibilities for abuse – businesses and individuals accessing the duty-free concessions for businesses or individual construction projects will be required to have their projects registered. These projects will be subject to monitoring and verification.

“However, the government will ensure that the business licensing and the project monitoring processes will be as nimble and as efficient as possible.

“With limited exemptions for potentially hazardous undertakings, all businesses within the zone will receive a provisional business licence on application – even as the formal licensing process continues.

“This will allow people to begin operating immediately,” Dr Minnis said.