The government has announced a raft of exemptions from value-added tax (VAT) where disaster relief operations are carried out by charitable and non-profit organizations in the aftermath of Hurricane Joaquin, and Arawak Port Development (APD) President and CEO Mike Maura has also announced a relief plan which will see some shipments designated by the National Emergency Management Agency (NEMA) ship at no cost.

Efforts related to Hurricane Joaquin – which shot from a tropical depression to a Category 4 storm practically on top of The Bahamas and with shocking speed – have moved from surviving the storm to assessing the damage.

Minister of State for Investments and Pinewood MP Khaalis Rolle, who represents a flood-prone area himself, told Guardian Business that it is likely that tax breaks for individuals are likely to come soon. In connection with the VAT tax breaks for charitable donations, he cited the government’s response to massive flooding in May 2013, which caused some $13 million in damages; the government at the time reduced customs duties on building materials.

“And it’s only prudent and responsible for a government in a time like this to remove every financial barrier possible to allow people to rebuild their lives. Your home is the center of your life in most instances,” he said.

Given the newness of the situation, Rolle said it is difficult to determine how long the tax breaks would last or how much money the government would budget for relief efforts associated with this storm.

“We have to assess the situation and determine what would be prudent, what would be acceptable, what would be responsible. In the case of the last major system that resulted in flooding, the exemption was for about six months.”

The Ministry of Finance’s announcement referred specifically to relief operations carried out by charitable organizations. Rolle spoke to the likelihood that individuals would also be granted some relief.

“I’m sure that once we sit down and to a full assessment of what has taken place and what needs to be done to allow the rebuilding process to take place in a quick manner, that would probably be one of the considerations – reducing the tax burden, whether its value added tax or customs duty, for individuals importing goods.

“There’s precedent for this, and it’s customary that a government would do that. I don’t want to preempt any decisions, but certainly there is precedent, and that is one of the mechanisms that governments usually use to allow people to rebuild,” he said.

The Ministry Finance over the weekend advised that where disaster relief operations are carried out by charitable and non-profit organizations, provisions exist under the VAT Act for exemptions and refund of VAT expenses.

“Charities must register online and obtain a TIN – or tax identification number – from the VAT Department. They must ensure that the TIN is quoted on all of their local expense receipts. Most relief organizations have already received a TIN. Others are encouraged to register. In most cases, the process of getting a TIN takes less than 24 hours.

“All donations of relief supplies shipped from outside The Bahamas are eligible for exemptions of both the VAT and customs duties, once advance notice and documentation is given to the Ministry of Finance, or the request is sanctioned by NEMA.

“Where charities incur direct expenses on their relief operations, whether for supplies or charter operations, they can apply to the VAT Department for refunds. Refunds, however, cannot be provided to private individuals for goods donated to charities, whether purchased or used. However, where monies are donated, the relief organizations qualify for the VAT refund when they use these funds.

“To avoid being victims of fraudulent schemes, it is strongly recommended that persons making donations to relief organizations request proof that the organization has a tax identification number,” the ministry said.

And Maura released a statement saying the APD board and executives have decided “unanimously to help in the best way available to us through the facilities of Nassau Container Port”.

“Out of deep concern for the comfort and security of our brothers and sisters in the affected islands, APD will, for a specific period of time, facilitate the shipping of qualifying goods from Nassau or transshipping through NCP (Nassau Container Port) to those islands that have been most impacted by Joaquin. Members of the APD executive team are currently working out the specifics of our relief plan as regards duration of support and other details.

“It is imperative to ensure that this process be properly regulated for greatest benefit to those who have suffered loss. We are determined that our assistance will go to those who need it most. In this regard, we are counting on the National Emergency Management Agency (NEMA), the official management body in such crises, to play a pivotal role in the approval of qualifying cargo to qualifying consignees. All shipments under the APD Relief Plan will therefore be consigned to NEMA-designated consignees at no cost, provided the cargo is containerized and in gauge. Other cargo types may have a cost, but we intend to work to keep such costs as manageable as possible,” Maura said.

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