Cooper: Special economic recovery zones should be fully VAT free
The Nassau Guardian
December 16, 2019 Paige McCartney
Progressive Liberal Party (PLP) Deputy Leader Chester Cooper has called for value-added tax (VAT) to be removed from cooked food in the special economic recovery zones (SERZ).
The government recently reversed its position on removing VAT from prepared food at the cash register in the areas impacted.
Cooper said Grand Bahama and Abaco, which fall under the SERZ, should be fully VAT free.
“VAT needs to be removed on services and prepared food. Either the zone is fully VAT exempt or it’s not. I don’t understand this parsing over details on it,” Cooper said while addressing the National Progressive Institute on Grand Bahama last week.
Last month, the government announced the main tax benefits of the SERZ, which include the tax-free importation of goods directly into the recovery zones and VAT-free purchases of goods inside the recovery zone including water, fruit and vegetables and other unprepared and prepared food, including food sold at restaurants.
These and other tax breaks are in effect until June 30, 2020.
More than three months after Hurricane Dorian wiped out parts of eastern Grand Bahama, many residents remain unable to rebuild or restore electricity to their properties, therefore leaving many unable to cook at home.
Cooper also said that the funds the government has allocated for recovery and the reconstruction of homes and businesses on Grand Bahama and Abaco simply are not enough and the time frame is not long enough for homes and businesses to rebuild.
“First, the $10 million isn’t enough. It’s not enough for Grand Bahama, it’s not enough for Abaco and it’s certainly not enough for both islands. Reports are that there have been about 400 homes just on Grand Bahama that have been destroyed, wiped out. Most had little to no insurance. If you throw the entire $10 million at just the houses that have been destroyed, not the thousands that have been critically damaged, then you’re looking at about $25,000 per home.
“It just isn’t enough,” he said.
“Should people have insured their homes? Yes. Was Grand Bahama’s economy in a state where people could afford to build their homes and fully insure them? No.
“My suggestion would have been to start at $50-$75 million.
“Well, they say, ‘Where are you going to find this money, Chester?’ The same place you found the money to buy the Grand Lucayan. The same place you found the money for the lump sum payment and the increase in minimum wage you’re talking about. Government finances are about priorities. Is your priority to get people back in their homes and restart the economic engine? Or is your priority a pretty set of books that ratings agencies can applaud?”