DPM: yachting costs are “unreasonably” low

• But wants to make Exuma the “nautical capital of the hemisphere”

• Pledges to fight against the regulation of vacation rentals and cars

• “Wild, Wild West” optimism at Exuma Cays comes to an end


Editor-in-chief of the Tribune

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The Deputy Prime Minister yesterday unveiled his ambitions to make Exuma “the yachting capital of the hemisphere” despite the fact that the taxes generated by the sector are “unreasonably” low.

Chester Cooper, also Minister of Tourism, Investment and Aviation, told the Exuma Business Outlook conference that the Bahamas was only “scratching the tip of the iceberg” when it comes to the economic impact of the high-end yachting industry and needed to “push it deeper”.

Yet speaking just before his appearance at the Fort Lauderdale Boat Show, one of the industry’s leading annual trade shows, he also suggested that the $ 300 cruise license and 4% yacht charter fee collected by the government were too low and that it was necessary to be more “equitable” with regard to its tax contribution to the Public Treasury.

Mr. Cooper expressed similar sentiments about vacation rentals, which he said must be “more closely monitored and regulated”, while also pledging to crack down on the “unfair” competition provided by rental companies. unlicensed cars and boats which he said were operated by foreigners.

And he expressed hope that the new vessels supplied to the Port and Fisheries Departments respectively will enable authorities to finally take control of what he has described as a “Wild, Wild West” in the Exuma Cays in terms of protection of the environment and natural resources. – something he has been complaining about for ten years before becoming a member of Parliament for Exuma.

“I want to tell you that the Davis / Cooper administration intends to take a closer look at vacation rentals, and to more closely monitor and regulate vacation rentals on Exuma Island and in across the country for that matter, “Cooper told the Outlook Conference.

“We plan to register and inspect vacation rental properties for the safety of our guests and the protection of the product and the destination.” He added that the Tourism Ministry tasked the Hotel Licensing Department to “build regulations for this and the framework” to facilitate it as quickly as possible.

Recognizing that tax-related issues require Cabinet decision, Cooper said, “I will recommend that VAT be charged on vacation rentals. Currently, hotels pay room taxes; vacation rentals don’t.

Implying that this was unfair, especially since many vacation rentals were owned by foreign foreign owners, who “we welcome and love” but only reside for a small part of the year, he added: “Many of them compete with hotels, sometimes with the benefit of public spending on marketing and infrastructure, and sometimes with concessions, but without paying much VAT to the treasury.

However, the situation Mr Cooper described was believed to have been addressed by the Minnis administration in the original 2021-2022 budget passed by the previous parliament in June. He was seeking to extract an additional $ 31 million a year from the vacation rental market by “leveling the playing field” on taxation.

The VAT law has been amended to make it clear to Airbnb and its competitors that taxes should be levied “on the full rental value”, rather than just the commission paid to their platforms. “We are changing the law to make it clear that all vacation home markets, such as Airbnb and VRBO, are required to pay VAT on rentals and commissions,” former Prime Minister Dr Hubert Minnis said.

Meanwhile, Mr. Cooper has also pledged to clean up car and boat rentals as part of his campaign to ensure that all taxpayers “give back to Caesar what is owed to Caesar.” He added: “We also plan to regulate activities like car rental and boat rental,” noting that these areas are meant to be reserved for Bahamian ownership only and “subject to strict licensing.”

“We must ensure that Exuma entrepreneurs do not face unfair and unlicensed competition,” said the deputy prime minister. “We hear this a lot and are going to do something about it. We welcome our friends from different countries, but fair is fair.

“Give back to Caesar what is owed to Caesar. We need our part to help build the roads, docks, bridges and airports we all complain about. Then, turning to the boating and yachting industry, Mr. Cooper added, “In a similar vein, we will also be looking to see how we can further leverage charters in the cruise industry that utilize our natural environments. for big profits, and we welcome them.

“But it’s just unacceptable that cruise licenses cost $ 300 and the charter fee is 4 percent of what the charter is going for. I’m renting … Pedro is renting his super yacht for $ 25,000 per day, and we only get a minimum of 4% and a cruise license fee of $ 300.

“He just so happens to have crossed our waters on his mega yacht to enjoy the Exuma Cays, to use our resources and our infrastructure. We welcome that, but there has to be fairness in my opinion. I do not speak only as Minister of Tourism, because we recognize the economic impact of their activities, but we must balance the approach we take as a country to ensure maximum economic benefits.

Mr. Cooper’s comments will likely be warmly welcomed by Bahamian tour and tour providers who have long advocated a level playing field in taxation with foreign yacht charters. The collection of permits and charter fees is also a long-standing issue, although the recent introduction of online payment portals is expected to have an impact on this issue.

The former Minnis administration also looked into this area, and Tribune Business records indicate it believed it could generate between $ 20 million and $ 50 million in additional revenue by fully collecting all cruise and charter license fees. of yacht due.

Cooper said yesterday that the Tourism Department has collected $ 43 million in charter fees for the 2021 schedule so far “on a bid basis”, as well as $ 1.7 million in license fees. cruise. With the value of the global boating and yachting industry set to rise from $ 22 billion in 2017 to $ 35 billion by 2026, he added that this was a market his ministry will pursue.

“There is great potential in the cruise and charter market,” said the Deputy Prime Minister. “We’re going to grow this business… We’re going to expand it because it’s a good deal and it has been recession-proof. Even during the pandemic, we still managed to attract many yachts and boats to the Bahamas.

“It’s a good target market for us. It is a high end market and I would like to make Exuma the yachting capital of the hemisphere. I hope we will tap this market more deeply and reap more benefits from this industry. I just think we are touching the tip of the iceberg.

Cooper, meanwhile, added that the Fisheries Department’s new vessel was “not just lip service” as he had actually seen it, while the Port Department’s was also underway. “I have often complained that the Exuma cays are the Wild, Wild West,” he added.

“And I have always advocated that we need a joint immigration, police, port service and fisheries enforcement unit to ensure that we balance economic growth with the protection of our resources and the protection of our environment. I’ve been complaining about it for ten years.

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