Chamber chief hits back at govt’s explanation; says everyone will be impacted, not just high-end properties
NASSAU, BAHAMAS — The Abaco community was said yesterday to have been shocked and completely caught off guard by the government’s decision to remove the zero-rating on construction services.
Abaco Chamber of Commerce President Ken Hutton told the Bahamas Business Outlook yesterday that the island was taken aback by the decision.
Many homes are still in a state of disrepair; a lot of people don’t have the money and that 10 percent is a huge hit.
– Abaco Chamber of Commerce President Ken Hutton
He later told Eyewitness News: “This came as an absolute shock. The explanation that this affects only a few high-end people is not sure. It affects everyone trying to rebuild here.
“Many homes are still in a state of disrepair; a lot of people don’t have the money and that 10 percent is a huge hit.
“We were given assurances that they would be included with the extension of the SERZ (special economic recovery zone) and it was not.
“They just issued the notice. There was no input or consultation on this.
“It’s not just the Chamber [of Commerce] that is upset about it, it’s the entire community. Everyone was totally caught off guard.”
The government, in a statement on Wednesday, sought to address concerns over the extension of the SERZ order in Hurricane Dorian-ravaged communities.
“We are aware that some concerns have arisen over the extension of the SERZ order in relation to Abaco, the Abaco Cays, Grand Bahamas Island, Sweetings Cay, Deep Water Cay and Water Cay, in particular as it relates to the zero-rating on construction services,” the statement read.
The removal of the zero-rating on construction services is expected to impact a minority of cases, mostly high-end properties.
– The Ministry of Finance
“VAT (value-added tax) and duty exemptions have been extended to December 1, 2022, for household furniture, furnishings and appliances, hardware supplies, building materials, electrical fixtures and materials, plumbing fixtures and materials.
“It should be noted that the vast majority of persons in the impacted areas, in repairing their property, will purchase materials and employ labor to effect the repairs.
“With the extension of [the] SERZ order, those persons will not be affected because building materials will remain tax-free and VAT is not charged on labor in these circumstances.
“The removal of the zero-rating on construction services is expected to impact a minority of cases, mostly high-end properties.”
The statement added: “The Ministry of Finance will continue to process applications for relief under the SERZ on a case-by-case basis and consider any application for special consideration on its merits.”