NASSAU, BAHAMAS — Abaco Chamber of Commerce President Ken Hutton said yesterday the island remains in a “holding pattern” due to the COVID-19 pandemic, as he described the extension of the island’s Special Economic Recovery Zone (SERZ) status as “critical” to its economic recovery.
“We are in a holding pattern right now due to the COVID situation,” said Hutton.
While noting that the island’s second home market is a key component to its economy, Hutton said there is currently not much post-Dorian reconstruction underway in that segment.
“There’s not a lot of reconstruction going on as it relates to that right now,” Hutton said.
“As soon as the border opens up I think we are going to seek a real spike in economic activity here.
“That’s why we’ve been pushing for an extension of the Special Economic Recovery Zone concessions.
“That’s critical because people need to be able to rebuild. The expiration of those concessions are our biggest concern right now because people need to be able to build.
“That is needed when you talk about building materials, appliances, furniture and home goods.”
While addressing a Bahamas Institute of Chartered Accountants conference on Monday, Deputy Prime Minister and Minister of Finance K Peter Turnquest noted that the building materials exemptions have been extended through June of 2021.
The SERZ Order also provides a tax waiver on the import of vehicles to replace those that were lost or damaged.
The waiver runs through December 31.
“We will look at it again when we start to prepare the budget to see where we are on Grand Bahama and Abaco in terms of rebuilding and whether there is a need for an extension,” Turnquest said.
“We are not going to announce an extension beyond June of next year at this stage, but we will look at it.
“We have an obligation to the entire Bahamas and we have to be careful that we do not set ourselves up for a long-term challenge,” said Turnquest.
The government implemented the Economic Recovery Zone on Abaco and Grand Bahama in late 2019 following the devastation of Hurricane Dorian.
Value-added tax, import duty and Excise Tax has been eliminated on construction materials and all other physical goods sold and brought into the zones.
Discounts have also been provided on real property tax and other real estate-related taxes provided certain conditions are met.