Tag: Bahamian politics

Gaming in the Bahamas
Politics

Minister “comparing apples and potatoes”

Deputy Prime Minister and Minister of Finance, Peter Turnquest, has been misinformed regarding the technicalities of the gaming industry in The Bahamas. This was evident as the Minister, on Guardian Talk Radio’s Morning Blend, compared the Bahamian gaming market to other countries whose dynamics are vastly different.

According to the findings of an independent international gaming and tax expert, the proposed tax structure given by the current administration on the national gaming industry has vast implications on the Bahamian economy, most notably, threatening the livelihood of approximately 2,000-plus Bahamians employed within the industry. It will also likely expand the existing unregulated black market.

On Morning Blend, Minister Turnquest suggested that the proposed “tier system” tax structure is “well ahead” of similar taxes imposed in other countries. He then compared the proposed taxation to those imposed in Florida, the United Kingdom and other Caribbean countries.

“In the first tier most operators will only see a 20% tax rate,” he said, adding, “but, you look at Monaco (sic) that’s at 39%, plus a 35% flat gaming tax, plus 1.6% for special fund and 2.4% for government incentives. Then you have Florida. Florida has a 78% (in) gaming tax. Barbados costs 17.5% plus 25% in corporate income tax. The UK takes 78%. Jamaica takes 20% plus 5% tax in ticket sales, plus 20% on all lottery winnings over $150.”

We are confused by the Ministers’ examples given that the jurisdictions he has listed are not comparable to our own.

We are assuming the Minister will be referring to Macao when he said Monaco, as he has referenced this jurisdiction before. Macao’s gaming industry is comprised of land-based casinos and horse racing, while the Bahamian industry is comprised of online gaming. All gaming taxes collected in Macao are from land-based casino operations, similar to Atlantis or Baha-Mar.

Florida does not authorize, manage, or regulate any online gaming in the state; and in Barbados, online/interactive gaming companies do not exist. Our taxes are in line with the 15% tax rate for online gaming in the United Kingdom. None of these industries are the fourth largest employers in their jurisdiction. The Minister is comparing apples and potatoes.

While gaming operators are not opposed to being taxed, the Minister should seek a gaming and tax expert to ensure that the most informed decisions are made and everyday Bahamians don’t suffer due to misinformed calculations and wrongful comparisons.

How can the Minister express concern for the gaming culture in the Family Islands, claiming that revenue is “being sucked out of their community” and transferred to the capital, without sharing any empirical evidence? Why isn’t this same concern shared for the over 2,000 Bahamians employed by gaming operators nationwide?

If the government is going to make such fundamental structural changes to this or any other industry, then there is a legitimate expectation that they will use only empirical data from independent experts and that these changes are made through a proper consultative and collaborative process.

Politics

‘Unfair’ to tax webshops into losses

The Bahamas Government continues to show little to no concern for Bahamians’ livelihood and it continues to show signs that the new taxation structure is truly a guessing game with regards to the future of the gaming industry and the Bahamian economy, according to the Bahamas Gaming Operators Association (BGOA).

This was most evident in the recent comments of Marlon Johnson, the Financial Secretary, who spoke on Eye Witness News on Friday. Mr. Johnson seemed nonchalant and apathetic to the plight of gaming industry employees as he suggested that they, if laid off due to downsizing by gaming establishments, could simply apply to be maids at Baha-Mar resort.

“Well, the Government is always concerned when there’s a notion of job loss and the like, (but) fortunately this is a group of people moving into a growing economy where places like Bahamar are still looking for house keepers. You go online (and you’ll see) they’re still looking for space cleaners so the market can absorb the capacity,” Mr. Johnson said.

These “opportunities” as Mr. Johnson described them, may be best suited for the hundreds of other Bahamians currently unemployed or being forced to work 20-hour weeks at other resorts in New Providence and Paradise Island. As history has shown us, the hospitality industry in the Bahamas can be very fickle. The most opportune and wise decision would be to secure these jobs rather than have 2,000-plus unemployed Bahamians unless the Government no longer has an interest in maintaining jobs for a stable economy. If webshop employees prefer to work in the hospitality industry that should be their choice and not a last resort, per the advice of the Financial Secretary.

Furthermore, if the 2,000-plus Bahamians employed by the gaming industry were to lose their jobs due to an unavoidable downsizing there is no guarantee that they would be employed by Bahamar as housekeepers or employed at all. They, too, would have to compete with the hundreds of Bahamians already on Bahamar’s waiting list. Is this the remedy that the Bahamas Government is prescribing for the downfall of their new taxation law?

If the Bahamian economy was in fact growing, as Mr. Johnson suggested, then there would be no debate. In fact, there would be no VAT increase or no taxes at all. The Government is convinced that by raising taxes by up to 453% on gaming houses that the industry will survive and, in fact, remain “vibrant.” Once again, the Bahamas Government is spewing information without sharing any empirical data to support their claims and shows no sign of consulting with the BGOA.

Mr. Johnson’s comments only further poke holes into the Government’s miscalculated, misdirected taxation plans, making it more evident that this is an attack on the gaming industry to ensure its demise, which will only further hurt the economy that they seek to revive.