Thursday, February 4, 2021
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The high-end Albany project received more than $23m in tax breaks during the 2017-2018 fiscal year as the government’s financial watchdog called for a “cost benefit analysis” on all such exemptions.
The Auditor General’s Office, in its audit of the government’s finances for that financial year, revealed that the south-west New Providence development received the third-largest customs duty and excise tax exemption as its incentive agreements enabled it to pay zero of what would normally have been due.
Albany, which caters to homeowners who are mostly high net worth millionaires and billionaires, was also shown to have “deferred” $29.498m in VAT, paying just $401,000 to the Public Treasury that fiscal year. The “deferral” does not mean that the $29.498m will not be paid; just that it has been delayed until the start of economic activity associated with this sum - something Baha Mar also enjoyed.
Nevertheless, the data and comments by the Auditor General’s Office will likely reignite debate about the extent and value of tax breaks/investment incentives that the Government grants to wealthy foreign developers especially at a time when the Government needs every cent it can get following the debt blow-out produced by Hurricane Dorian and COVID-19.
Albany has investors, including Lyford Cay-based billionaire Joe Lewis’ Tavistock Group, and world-renowned golfers Tiger Woods and Ernie Els, who are seen as having exceptionally deep pockets in addition to the wealth amassed by their homeowner clients.
Yet the Auditor General’s Office revealed that Albany received the third-largest Customs duty and Excise tax exemption that year behind Bahamas Power & Light (BPL), which enjoyed $216.77m worth of tax breaks on its fuel imports, and the $76.14m in exemptions granted under the Hotels Encouragement Act.
“The Albany project exemptions accounted for $23.05m or 6 percent of the $329.69m” in total duty and Excise tax revenues foregone in fiscal year 2017-2018 due to the Government’s incentive legislation and agreements with individual investors,” the Auditor General’s Office said.
Of $358.25m in VAT-able activity that was subject to these investment incentives, some $123.73m was collected with another $236.22m “deferred” and $389.93m “foregone” by the Government and Public Treasury.
“We noted that the $389.93m in revenue ‘foregone’ accounted for 52 percent of the $750.94m that would have been recognised except for the concessions and exemptions,” the report said of VAT.
“From the total $392.26m duty and Excise taxes levied, $2.75m revenue was collected and $389.94m exempted through concessions. The concessions have a direct impact, in the first instance, of reduction in the Government’s Customs revenue for duty and Excise taxes.....
“Notably, the $389.94m ‘foregone revenue’ impacts the overall recurrent revenue. A cost-benefit analysis is deemed appropriate in concessions, duty and taxes management with respect to the projects, investments, industries and policy governing the benefits to be derived,” the Auditor General’s Office continued.
“Big data analysis across the trade sectors to undergird the results would be beneficial for transparency, accountability and good governance. We recommend that for effective decision-making and continuous policy formulation, the application of big data analysis inclusive of cost benefits be fully used in trade sectors concession management to harness good governance.”
Comments
Dawes says...
Not sure you can blame Minnis on this one. It was whoever signed the initial agreement to give them all those breaks. Now if there are clauses that Albany should have done and didn't then yes blame Minnis as they should use that to say breech of contract and void the whole lot.
Posted 5 February 2021, 10:35 a.m. Suggest removal
tribanon says...
It was the very corrupt team of Ingraham & Watson who gave the billionaire Albany developer Joe Lewis whatever he wanted in the way of government approvals, ridiculously generous concessions and tax breaks of every kind, not only for Lewis's Tavistock development company but also the future residents of Albany.
Watson being the bandit that he is, was 'rewarded' in a very big way because Lewis was so enamoured by his extraordinary efforts on behalf of the Albany development.
Now keep in mind that the Albany development is an exclusive gated community that sits on hundreds of acres of land with considerable coastal frontage in the southwestern area of New Providence. This was land that should have been reserved for future Bahamian homeowners given the very limited amount of available land on New Providence even back then.
But Ingraham & Watson assured Bahamians that the Albany development would result in a big boost to our economy by way of significant additional taxes and fees flowing into the Public Treasury. Well, now we clearly see from the Auditor-General's recent report that a mere pittance has been and continues to be contributed by the Albany development to our crippled economy.
And now Minnis no doubt goes cup in hand to Lewis for 'top-up rewards' whenever general election time rolls around. Meanwhile our country's coffers remain bare and our national debt stands at an all time unsustainable high! Truly sickening.
Posted 5 February 2021, 1:18 p.m. Suggest removal
Emilio26 says...
Tribanon well it sounds like you're jealous all because nypu don't live in a gated community or on the beachfront property. Well if you want a vacant piece of beachfront land just simply buy one.
Posted 2 August 2021, 7:32 p.m. Suggest removal
ABOMINATION says...
Real property tax collection should be abolished forthwith. Firstly it is unconstitutional, just like in many other parts of the world. That is why, in some countries, Citizens are finally standing up. We should never again allow any Governments to dictate how we want our country managed. We the people hire them, and so we the people should grade them, just like in any other private/corporate business. Think about it, would you hire A CEO to run your country and let them run amuck with whatever he wants to do with your Company? Similarly, we the People hire the Government, but we should give them the Mandate or Vision we would like to see. Had we done that decades ago, The Bahamas would have been the envy of the world! Because then, we would have elected reputable, upstanding Individuals with values and morals, ethics, those with proven track record of successful businesses, whether local or International. It is time to rid ourselves of the 2 party systems, and stand strong together as citizens of this Country. start fresh. Fire both parties, IT IS TIME. Now about ALbany....unbelievable how arrogant some of these Foreigners are, and cheap too!...they do not pay for nothing! not even groceries, furniture do they pay duties on. ... The resort was given concessions when they were building, but its long finished. and these concessions should not have been passed to people who rent or even own or build homes..when Bahamians, struggling Bahamians, have to pay! This must stop. And do not think they do not brag about it! Also those Albany people would not think twice about buying some stupid painting for 50,000 dollars, or pay some foreigner to do work for them 200% more but than they would pay a local professional for the same services. Shameful. SOme of them come to this country, knowing its predominately black, and they are as racist as hell!. DO NOT COME TO THIS COUNTRY IF YOU HATE BLACK PEOPLE. Ask any of them if they have any black bahamian friends? go ahead ask? They think they are better, well I would rather live off our land, and eat from my garden, than watch some of these racists foreigners operate in this country. Truth is truth.. ALbany, Old Fort and all the other foreigners should pay the same tax the locals pay. PERIOD!
Posted 5 February 2021, 2:55 p.m. Suggest removal
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