Tax concessions that will be offered through the Over-The-Hill Redevelopment Programme will only be made available for a period five years, according to the White Paper tabled by Prime Minister Dr. Hubert Minnis in Parliament earlier this week.
The term ‘empowerment zone’ will be the new term to reflect areas like the over-the-hill communities and will include other specified regions of the country that will be declared and designated – from time to time – because that region has fallen into economic hardship.
The rationale behind that time frame, according to the details outlined in the White Paper, is to ensure that permanent rights to tax exemptions are not established.
“Indeed, it is expected that after such a period, the zones should be reasonably, no longer be considered in economic hardship,” the White Paper read.
A major tenant of the initiative is to reduce the cost of property development in the zone to encourage new investment.
It is also the intention of the government to ensure that local businesses are able to benefit from the increase in economic activity, as a result of the tax exemption that include exemption from customs duties, real property and stamp taxes, as well as a business license fee waiver.
According to the White Paper, the inner-city tax-free zone is expected to include Bain and Grants Town, Centerville, St Barnabas and Englerston.
The White Paper explained, “Discussions with local merchants and the chamber of commerce will continue to determine the most cost-effective mechanism for Bahamian businesses.”
It also acknowledges that over-the-hill communities are some of the “poorest regions in the country”, as unemployment remains high and the typical household size is larger than the national average.