Web shops set for court battleGovt unmoved in tax hike plan
Attorney Wayne Munroe said yesterday he has been instructed by the Bahamas Gaming Operators Association (BGOA) to take the government to court over its proposed sliding scale tax for the industry.
Attorney Alfred Sears wrote to Deputy Prime Minister and Minister of Finance Peter Turnquest on May 31 on behalf of the BGOA requesting a meeting to discuss the tax and warned that if he declined to respond in seven days the group would seek legal action.
That deadline was on Friday.
Munroe said, “We had extended a deadline for the government to engage. We have not had a positive response so we have to proceed and we are settling the documents to go to court.
“We have been instructed to do it. Our instructions haven’t changed.
“When people start to refer to serious businessmen as numbers boys, whereas you wouldn’t refer to casino owners in Vegas, Atlantic City or here in The Bahamas like that, that shows the attitude.
“When the financial secretary is of the view that if web shop jobs are lost, people can go be maids, that is a failure to understand the nature of the industry.”
Munroe was referencing a recent comment made by Marlon Johnson, the financial secretary, who said on Friday that while the government is concerned about possible job losses in the industry, the fortunate thing is that Baha Mar is still looking for housekeepers and space cleaners.
Amid the social media backlash over the weekend, Johnson apologized, but also said his remark was misinterpreted.
Nearly 3,000 people are employed by gaming houses.
Asked what he hopes to achieve in court, Munroe said, “We hope to show the increase in tax is illegal,basically. We are still formulating.
“Our clients have been very understanding with the government. I don’t know how much longer that understanding will be.”
The government announced that gaming house activities will be taxed “through the introduction of a sliding scale of rates applied to taxable revenue”.
Gaming house revenues up to $20 million will be taxed at a rate of 20 percent; between $20 million and $40 million will be taxed at a rate of 25 percent; between $40 million and $60 million at a rate of 30 percent; between $60 million and $80 million at a rate of 35 percent; $80 million and $100 million at a rate of 40 percent; and more than $100 million at 50 percent.
The government has also proposed taxing gaming patrons through a five percent stamp tax applied on deposits and any non-online games or digital sales.
The BGOA called the tax increases for gaming operators “unconstitutional, discriminatory, irrational and inequitable”.
FML Group of Companies CEO Craig Flowers called the tax rise a “death warrant”.
He said many web shops may have to close their doors and warned that operators may be forced back underground.
But Turnquest said the increase has to do with “equity”.