Prime Minister Philip Davis defended the removal of customs duty on pleasure vessels yesterday, including yachts, noting that it is all part and parcel of the big picture of growing the country’s blue economy.
The opposition criticized the government for adjusting the tax to duty free from ten percent, and questioned why the move was “being done in secret”, and why the government didn’t raise the matter during the recent budget exercise in Parliament.
Davis affirmed that the adjustment was not made in secret, adding he would investigate why it was omitted during the course of debate.
“I did speak in my communication about reducing taxes on yachts. We are intending to develop and build the yacht registry to permit them to be able to house themselves in The Bahamas. Housing in The Bahamas means more for marinas, housing in The Bahamas means more opportunities for Bahamians to be engaged more directly in that maritime industry. As you recall, one of our planks is to develop the blue economy,” Davis said during a press conference at Lynden Pindling International Airport upon his return from the Commonwealth Heads of Government Meeting in Rwanda.
“We have already entered into an arrangement with LJM Maritime Academy and the Ministry of Education to engage as many Bahamians who wish to be in the maritime industry, to be able to go there on scholarship, and we also have a commitment from the cruise industry and the yachting industry – once they’re able to have a home here – to engage any Bahamian who has a certification coming from LJM Maritime Academy.”
He continued, “This is all part and parcel of the big picture of growing our blue economy. Now, the question as to the omission during the course of the budget debate, we have to look at that to see how it fell through the crack and how best to resolve it, and I will do that now that I’m home. I will sit down with the minister of economic affairs, financial secretary, my permanent secretaries and the deputy prime minister and we will work out what has to be worked out to achieve what we think is necessary for the development of our blue economy.”
Although pleasure vessels will no longer attract ten percent duty, they are still subject to ten percent value-added tax (VAT).
Maritime stakeholders said while the reduced taxes will make The Bahamas’ boating and yachting industry more competitive, taxes remain higher than those in Florida, from where a significant number of boats entering The Bahamas sail.
Speaking to the further expansion of the blue economy, the prime minister said significant progress has been made regarding the mapping of the country’s carbon assets, which the government intends to place on trading markets within the next year to monetize.
“There’s a conference that is now going on for ocean states in Lisbon, Portugal, and we are being well represented there. The scientists that have been assisting us in mapping our carbon assets, in particular the blue grass, will be presenting their scientific paper for review, adoption and then move to the next stage for verification. All of those steps are now taking shape as we speak. Dr. Rochell Newbold, who has been working with me with respect to this specifically, is representing us along with several other technical people and they are making those presentations now,” Davis said.
“That is the next step in moving towards monetizing our credits, and we are hoping to have them traded on an exchange. We are having discussions on that but we don’t want to preempt what is going on with that, because we have a lot of interest being expressed and we don’t want to have any one-upmanship over the next by putting things in the public domain. But we are well on the way.”
The government is currently developing carbon credit secondary markets trading legislation with the Securities Commission of The Bahamas, which is expected to soon be debated alongside the recently tabled Climate Change and Carbon Market Initiatives Bill, 2022.
Carbon credit experts have estimated that The Bahamas could generate as much as $375 million from carbon credits per year.