NASSAU, BAHAMAS – Deputy Prime Minister K Peter Turnquest yesterday cautioned the Special Economic Recovery Zone (SERZ) for Hurricane Dorian tax relief is not a “universal tax holiday” or “free for all”.
Turnquest outlined the tax relief benefits now available to hurricane affected residents of Grand Bahama, Abaco and the surrounding cays as he tabled the Disaster Reconstruction Authority relief order in Parliament.
“It has been about two months since Dorian wreaked havoc on the Northern Bahamas, leaving residents displaced from their homes and their jobs, and bringing commerce to a virtual standstill,” Turnquest said.
“In the immediate aftermath of the storm, we made a commitment to help the people of Grand Bahama, the people of Sweetings Cay, Water Cay and Deep Water Cay, and the people of Great Abaco and the Abaco Cays to rebound from the devastating impact of Hurricane Dorian with the firm support of their Government.
He continued: “We declared the impacted islands to be special economic recovery zones, or SERZ areas, and moved swiftly and decisively to implement various Exigency Orders to provide immediate tax relief.
“These provisions facilitated a successful humanitarian relief effort that was mobilized by local and international stakeholders in government, civil society and the private sector. They helped to ensure the rapid flow of humanitarian aid into the islands and into the hands of the people most in need.”
Turnquest noted that unlike the previous tax relief measures, the SERZ Order, 2019 “delivers a more comprehensive package of tax breaks on the import and purchase of goods and its extends the timeline for people to benefit from the tax breaks to the end of the fiscal year, or June 30, 2020”.
He added: “It expands the list of items that are approved for tax waivers, and it adds new benefits, including a provision for the VAT-free purchase of all approved goods at the cash-register within the SERZ Zone.
“Indeed, the package of tax breaks will allow individuals to rebuild their homes and their lives more affordably and with greater speed.”
Commenting on the package of tax breaks, Turnquest said: “When you shop locally with businesses in Grand Bahama, Abaco or anywhere inside the Recovery Zone, you will pay no VAT and no Duty on all approved goods.
“When you import cargo directly into the Recovery Zone, you pay zero taxes. Again, for residents and businesses inside the Zone, cargo imported directly is tax-free. Although pre-approval is required for all of the import provisions, individuals who shop abroad and import their goods with accompanied or unaccompanied baggage, also have the benefit of tax-free import on approved items.
“That means at the sea port where the ferry docks in Grand Bahama and at the airport where direct flights land in Marsh Harbour or Treasure Cay.”
Turnquest explained the SERZ Order, 2019 also allows for tax relief from all business license fees, tax relief on real property tax for improved property; and tax relief on the sale of realty.
“If you buy a piece of property inside the Recovery Zone, VAT on the sale of that property will be discounted up to 50 per cent depending on the property value,” he said
“Additionally, we have included provisions that allow pre-approved individuals and businesses from the affected islands to purchase goods with the tax breaks from Nassau suppliers or other vendors outside of the Zone.”
Regarding approved items under the SERZ initiative, Turnquest said: “The expansive list includes building supplies, hardware supplies, household furniture, furnishings and appliances, beds and bedding material, air conditioning units, plumbing and electrical fixtures.
“The list also includes clothing, personal hygiene products, unprepared food, medical supplies, and cleaning supplies. It is true, not every single consumer product is on the list of approved items.
“Alcohol, Tobacco, Wines and Spirits are not included on the list. Neither are confectioneries including chocolates, candies and gum. Indeed, not every single product sold by specialty businesses will be covered under the Order, plus, services are not included under the order.
“However, the list is very expansive and was created to take care of the immediate and urgent needs of the people affected by the storm to rebuild their homes and restore normalcy to their lives.”
Turnquest said there is no pre-approval required for VAT-free point of sale purchases inside recovery zones.
“However, for all of the other tax breaks, there is a Consolidated Tax Relief Form that must be completed by individuals or businesses and submitted to the Ministry of Finance or Department of Inland Revenue for pre-approval,” he said.
“This form replaces all of the older forms, and is available online and at any DIR or Customs Office.”
Turnquest stressed the Government’s priority in the delivery of tax breaks is the people in storm-ravaged communities.
“We will and we must have sufficient controls in place to prevent abuse, and we will apply the full weight of the law against those who take advantage of the system to the determent of those actually in need,” he said.
“This is not a universal tax holiday and it is not a free for all. The package of tax breaks under the SERZ Order, 2019 are for the people of Grand Bahama, the people of Sweetings Cay, Water Cay and Deep Water Cay, and the people of Great Abaco and the Abaco Cays. “