By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Eleuthera’s Chamber of Commerce president yesterday affirmed “our big ask” for tomorrow’s Budget is “full access” to available tax and other incentives, adding: “It will make a hell of a difference”.

Thomas Sands told Tribune Business that granting businesses whose primary location and “hub of operations” are in Eleuthera, and the wider Family Islands, the opportunity to properly tap into the Family Island Development Encouragement Act will make them more sustainable, cost competitive and better able to participate in major development projects.

With access to the Act’s incentives presently limited to individuals, as opposed to companies, he added that the latter’s struggles to access tax breaks and other savings is exacerbating the “seepage” of foreign direct investment (FDI) dollars outside of The Bahamas because Eleuthera and other Family Island-based businesses are often excluded from involvement by developers.

They rely on importing firms and talent from other Bahamian islands and outside The Bahamas, and Mr Sands argued that this is creating economic “voids” or gaps where local communities are “not fully empowered to maximise and access” the benefits from FDI inflows and are being left behind as a result.

“That’s our one ask; the Family Island Development Encouragement Act for businesses,” he told this newspaper of tomorrow’s Budget, adding that the benefits need to go beyond just Eleuthera to “the furthest extent of the Family Islands”.

“That’s our big ask,” Mr Sands reiterated. “It can make a hell of a difference if we can make it happen, primarily for businesses. The reality is, if we look at particular examples of where we have foreign direct investment, it’s questionable how impactful it really is in terms of the large communities and little communities.

“We see gaps in development where we have a lot of investment but Bahamians don’t seem fully empowered to maximise it and access it. It’s almost as if the heart of the community is getting left a little behind.”

Mr Sands said bringing in third-party service providers, such as contractors, from outside Family Island communities has the effect of “dissipating” FDI dollars back to their home base location and that of their employees. He added that, frequently, “the cost of living” escalates as a result of their presence while the “seepage” of the project’s investment impact is accelerated.

“What tends to happen is that only a certain percentage of the FDI comes into The Bahamas, stays and is retained, and if a group is coming in for a project, sub-contractors and so forth, they spend some of the money in the local community but the majority is sent back home and to where these entities are located,” the Eleuthera Chamber chief explained.

“It kind of disadvantages local businesses. [Outside developers and their contractors] can access duty exemptions to bring in brand new equipment under their contract [Heads of Agreement]. Local businesses don’t have access to that. They cannot compete. We are creating a number of gaps, we are creating economic voids in the long run.

“There’s a percentage of growth, direct employment, that brings benefits but, in The Bahamas, there’s an argument that we must retain as much of the FDI that enters the economy as we can. We must stop the seepage. It’s about empowering communities to absorb it and reinvest in their own communities.”

Mr Sands, and the Eleuthera Chamber, are arguing that full access to the Family Island Development Encouragement Act’s incentives would place the island’s businesses and those on other Family Islands on a more even playing field versus external rivals. They would be better able to attract the capital equipment, skills and talent, and other resources at a reduced cost/price that is attractive to developers.

“The benefit we hope is that we empower them to participate,” Mr Sands explained. “They could have equipment costs reduced, can supply services at the same cost and upgrade their business at the lowest cost and price point.... We’re equipping them to be competitive.” This, he added, could translate into the adoption of renewable energy and property repairs.

And, noting that as a tourism-based economy, Eleuthera and all Bahamian islands must offer service “comparable to what the customer is getting anywhere in the world”, Mr Sands added: “If we do not empower the community to deliver that service - landscaping, food and beverage; whatever it is - there’s going to be an economic void.

“And the end-user is going to say that the locals cannot perform the service; they will have to import it from elsewhere. The delivery from a tourism perspective, if a visitor walks out into the community, and the community is depressed and has not improved its product, we are deficient in delivering a tourism product that we promote as being better in The Bahamas.

“For the fisherman to compete, the car rental company to compete, all these pieces have to be raised to the same standard for product delivery. We’re trying to lower the price point for Bahamians to participate.”

Mr Sands said it would be “a huge achievement” if the incentives access sought by the Eleuthera Chamber, its members and all businesses in the Family Island “becomes a reality”. He and the Chamber set out their position, and request, in an April 3, 2025, letter to Prime Minister Philip Davis KC that was also copied to Chester Cooper, deputy prime minister, and Clay Sweeting, who looks after the Family Islands.

Describing it as “a vital lifeline” for Eleuthera’s private sector, Mr Sands wrote: “We firmly believe that ensuring a structured and inclusive path for the sustainable development of Eleuthera requires Eleuthera-based businesses to have full access to the Family Island Development Encouragement Act, as originally intended, to revitalise Family Island communities.

“After thorough review, we have determined that businesses in Eleuthera currently do not have access to the exemptions provided under the Family Island Development Encouragement Act. We respectfully request that access to these exemptions be granted as applied as followed.”

To ensure that only legitimate, bona fide businesses can access tax breaks and other incentives, Mr Sands said only “majority Bahamian-owned, established businesses” whose primary operations base is on Eleuthera would be eligible for the exemptions along with start-ups and expanding firms “primarily based” on the island.

He proposed that the exemptions would apply to building materials; plumbing and electrical supplies; furniture and appliances for use in business operations in Eleuthera, plus commercial vehicles, land-clearing machinery and related parts that companies may require.

IT hardware and software, solar panels, energy efficient solutions and related equipment would also qualify for incentives. International and local purchases would both be covered, but Mr Sands proposed that consumables, inventory and items for resale will not receive any incentives or exemptions.

He also called for “accelerated approvals at favourable rates for work permits where required, ensuring businesses can access the specialised skills and expertise necessary for growth when such expertise is unavailable locally”.

The Eleuthera Chamber chief proposed that, to access incentives, companies would need to provide proof of majority Bahamian ownership; their proper incorporation; evidence they were based on the island and that it is their primary base of operations; proof their investment is on the island; a valid Business Licence and a tax compliance certificate.

Asserting that this will ensure “a clear, transparent and accessible process”, Mr Sands wrote: “We believe that granting Eleuthera-based businesses access to these concessions will foster economic growth, improve local communities, enhance the tourism product, support generational business transitions, expand the tax base and increase the impact and retention of foreign direct capital investments in Eleuthera.”