“If you are looking at changing the tax base in Freeport, then comparing taxation and expenditure for the whole island is critical.” “They were mixing apples and oranges,” Mr Smith told Tribune Business. He argued that the Government’s tax earnings from, and spending in, Freeport needed to be ‘broken out’ and separate from the rest of Grand Bahama to show whether the city was a ‘profit generator’ or burden for the Public Treasury. Mr Smith, though, said McKinsey was mistaken to lump Freeport, a ‘tax-free zone’, together with the rest of Grand Bahama in calculating and assessing the city’s contribution to the Government’s coffers. ![]() “The Government likely runs a deficit of 3.9 per cent of GDP on Grand Bahama versus a national primary deficit of 2 per cent of GDP in 2012,” McKinsey said. This, combined with $28.2 million worth of subsidies, resulted in a ‘Grand Bahama deficit’ of $48.4 million. ![]() Taking figures from the Government’s 2013-2014 Budget year, McKinsey said $69.2 million in revenues were collected on Grand Bahama, which received $89.2 million in public spending. Seemingly justifying the Government’s desire to extract more tax revenue from Freeport, McKinsey estimated that it was running a near-$50 million annual deficit on Grand Bahama. Mr Smith, whose Judicial Review challenge to the committee’s consultation process forced the McKinsey report’s grudging ‘11th hour’ release, argued that the consultants had “mixed apples and oranges” in assessing Freeport’s impact on the Public Treasury. Mr Smith argued that such a trade-off would be “catastrophic” for Freeport and its 60,000 residents, as the failure to renew its real property, capital gains and income tax exemptions would undermine the city’s economic foundations.Ĭalling for the subsequent report by the Government-appointed Hawksbill Creek Agreement Review Committee to also be made public, the well-known QC warned the Christie administration it would both “terrify and scare away” investors by seeking to reclaim the Grand Bahama Port Authority’s (GBPA) quasi-governmental powers. Tribune Business exclusively revealed last week how McKinsey had warned the Christie administration that up to 1,100 jobs could be lost in Freeport if it were to ‘trade off’ employment for $80-$100 million in extra revenue generated by allowing those incentives to ‘sunset’. Mr Smith agreed, though, that the report should have “driven home” to the Government how badly Freeport’s economy would be impacted if it failed to renew the investment incentives due to expire in less than two weeks’ time. ![]() Tribune Business McKinsey report on Freeport’s economic future is flawed in its assessment of the city’s tax contribution and potential Business Licence fee earnings, an outspoken QC believes.įred Smith QC, the Callenders & Co attorney and partner, said the Government’s consultants had committed the fatal error of combining Freeport with the rest of Grand Bahama in evaluating the city’s impact on the Public Treasury.Īnd he described McKinsey’s forecast that the Government could earn almost $20 million from the imposition of Business Licence fees as “misconceived and irrelevant”, given that this ‘tax’ cannot apply to Freeport.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |