THERE ARE NEW CHANGES THAT WILL AFFECT BAHAMAS BOATERS
The Bahamian Government presented its annual budget for the 2019/2020 fiscal year in June. There were several measures announced that will directly impact the boating industry and the tourism sector as a whole. Changes include the Value-Added Tax (VAT) on vacation rental properties, regulations for international yacht chartering, fee increases for cruising permits, and the introduction of an electronic payment platform to make boating in Bahamian waters more convenient
The relevant changes include the Value-Added Tax (VAT) on vacation rental properties, regulations for international yacht chartering, fee increases for cruising permits, and the
introduction of an electronic payment platform to make boating in Bahamian waters more convenient.
YACHT CHARTERING
Due to weaknesses in the government’s enforcement measures, the collection of yacht charter fees has historically been low in The Bahamas. As part of its new fiscal measures, however, the government plans to change this with a move to boost voluntary compliance and enforcement of existing laws related to foreign-flagged charter yachts which are currently required to pay a 4 percent fee when in Bahamian waters.
“We know that there are facilitators in the U.S. selling charters. Some of those charters are here and not declaring that they are actually doing charters from The Bahamas,” says K. Peter Turnquest, deputy prime minister and minister of finance. “There are others coming over from the U.S., particularly in Bimini where this is a problem. They come over
for a day fishing and whatever and don’t declare they are on a charter. We are missing all that revenue. The estimates could be anywhere from $20 million to $50 million.
“What we have built is a system to track marine traffic, and it is going to be able to tell us who has and has not paid. It is going to make it easier and more efficient for people to register. Hopefully, that will drive natural compliance and derive the kind of revenue we are seeking,” he adds. Turnquest also highlighted that one of the government’s overall revenue objectives is to enforce existing laws and close loopholes instead of adding new taxes and fees.
CRUISING PERMITS
Effective January 1, 2020, the government will be implementing an increase in cruising permit fees from $150 on boats up to 34 feet and $300 on boats 35 feet and longer. There are also plans to set rates based on size and length of stay ranging from $150 for three months to $4,000 per year. These rates will also go into effect at the start of the new year to allow a transition period for the boating industry. The government conducted enchmarking studies on similar fees in rival Caribbean jurisdictions before unveiling the new structure.
ONLINE PLATFORM
Just about everyone is now accustomed to buying products and services online. As this technology continues to not only advance, but become easier to use, governments are beginning to embrace e-commerce as the most efficient and effective way of doing business. The phased roll-out of a new online platform for the Bahamas Department of Customs, called Click2Clear, will introduce online payment for cruise permits and, eventually, yacht charter fees. Application by paper and cash-only payments have long been a source of challenges for government and those seeking to abide by the laws. When Click2Clear is fully implemented, it will bring added convenience to the boating community.
Along with these technology advancements will come a change in fees for yachting and chartering entities. Without question, the government’s enforcement measures have been challenging as evidenced by the collection of yacht charter fees which has historically been low in The Bahamas. In implementing new fiscal measures, the government plans to change its ability to collect fees in a move to boost voluntary compliance and enforcement of existing laws related to foreign-flagged charter yachts. Currently charter yachts which currently are required to pay a 4 percent fee when in Bahamian waters. This will also now include fishing charters that come from either the US or Bimini. “What we have built is a system to track marine traffic, and it is going to be able to tell us who has and has not paid. It is going to make it easier and more efficient for people to register. Hopefully, that will drive natural compliance and derive the kind of revenue we are seeking,” says K. Peter Turnquest, deputy prime minister and minister of finance. Some estimate that government is losing between $20-50 million in revenues on an annual basis. Turnquest also highlighted that one of the government’s overall revenue objectives is to enforce existing laws and close loopholes instead of adding new taxes and fees.
Click2Clear is also expected to improve the overall process of importing and exporting goods by increasing transparency and accountability. Its full-risk management portal will reduce the time for processing entries. Low-risk users benefit from automated system checks with only sample inspections, as opposed to 100 percent inspections. The system will integrate with other government agencies which allow for the seamless processing of custom-related permits from those agencies. Stay tuned for additional changes aimed to make doing business in The Bahamas even easier.