Friday, August 5, 2022
By YOURI KEMP
Tribune Business Reporter
The Prime Minister’s hint that the Government is mulling lower taxation for gas station operators was yesterday branded the “right approach” even though margin increases may not be considered.
Vasco Bastian, the Bahamas Petroleum Dealers Association’s (BPDA) vice-president, told Tribune Business: “I think that approach and suggestion put forward by the Prime Minister is the right approach. It’s definitely a long-term fix and solution.
“It will bring instant relief to the dealers and instant relief to the motoring public. So that is exactly the economic model that the Prime Minister and the Ministry of Finance is going to use, it is the right approach to use. It brings the whole operation into the 21st century.”
It is not precisely clear, though, exactly what kind of tax relief the Government is eyeing. Mr Davis, speaking at the weekly Prime Minister’s Office media briefing, said: “We are now considering what we’re going to do with retail gas stations, seeking to reduce some of their taxes on VAT, to be able to pass that on to consumers at the pump. That is something in the works that can work.”
The Prime Minister’s comments appeared to suggest relief will be forthcoming on the 10 percent VAT levied on every gallon of gas or diesel being sold. However, as this tax is ultimately borne by the consumer, it would benefit motorists rather than the gas station operators unless the Government was to make gasoline/diesel zero-rated by also removing VAT on the fuel inventories they purchase from Shell, Esso and Rubis.
Mr Davis on the timing of any tax relief, how much taxes will reduce by or for how long. Petroleum dealers had sought up to a 50 percent margin increase, which would have moved this from 54 cents to 81 cents per gallon of gasoline if granted, as their main form of relief.
However, Michael Halkitis, minister of economic affairs, said a margin increase is “off the table” given the impact it would have on hard-pressed consumers already grappling with soaring fuel prices and overall inflation. Mr Bastian, though said of the margin rise: “I don’t think it is necessarily sidelined. It’s right there. Let’s see how this tax reduction suggested by the Government plays out before we do anything else. This is a two-in-one deal, so let’s see how this plays out first.”
Gasoline prices in Nassau stand at $6.89 at Rubis; $6.66 at Esso; $6.97 at Shell; and $6.92 at AutoServ. Mr Davis, meanwhile, reiterated that the Government has also been speaking to the shipping companies in a bid to reduce container-related costs involved in transporting goods to The Bahamas.
“We were successful in negotiating the reduction of transportation of goods from the Far East by at least 40 per cent. That’s in train now,” the Prime Minister said.
“We’re now working on containers coming from Florida, and I’m confident that we’ll be able to have some reduction in respect to that. It’s just the logistics that’s going to be worked out in that regard, but we are working assiduously to avoid further burdening of people as a result of these, what I call external shocks, which we have very little control over.”