The upcoming Eleuthera Business Outlook will soon be addressing family island-specific value-added tax (VAT) queries, like where local businesses can find accounting services to prepare for VAT, whether developers who access concessions under the Hotels Encouragement Act will be subject to VAT and how tax liabilities arising from a "myriad" of family-owned businesses will be determined.
Taking place on April 24 at the Cape Eleuthera Resort and Marina, Higgs and Johnson partner Christel Sands-Feaste - along with a wide variety of speakers - will speak about the proposed tax, looking at topics ranging from tourism to entrepreneurship and farming.
The business-centered conference is being organized by The Counsellors Limited (TCL) in conjunction with the Eleuthera Chamber of Commerce (ECC), at a time when ECC President and realtor, Thomas Sands, said there are signs that the island, like a number of other family islands, is beginning to "emerge" from the protracted economic downturn.
Sands will speak at the event on the importance of local entrepreneurs being ready to capitalize on the spin-off opportunities that arise from larger developments, and the role of the government in incentivizing island business growth by providing a "level playing field" to both domestic and foreign developers in terms of tax concessions and incentives.
At a press conference held on Friday, Sands said he is hopeful about the island's prospects, particularly in light of significant activity in the vacation rental sector and a spike in interest in real estate purchases.
"Being in the real estate business, and I've been in the business for more than 20 years, you can see the signs of things to come, and it's very important to begin to plan when you see those signs. So the signs that we have as indicators are the vacation rental business.
"Over the last couple of years, that is an area that has been seen to find its growth. It's continued to subsidize the lack of hotel rooms in the island of Eleuthera, and through the Internet and the use of websites, like Homeaway.com and individuals who've been very creative in marketing, they have been able to essentially replace that lack of inventory. New vacation homes have been built over the last five years although we've been in the recession, and I think it has raised the standard of accommodation available.
"As of last year, we began to, in our personal business and in consultation with other realtors, to see some indication of new real estate interest. Of course that doesn't always turn into sales...but when you see the level of interest begin to be raised after no activity for years that's a good indicator."
Sands noted a number of recent larger-scale developments, in the form of the Cove Eleuthera Resort opening, which he described as "the first boutique high-end resort to open on the mainland of Eleuthera in probably 30 years," as a "step forward" and a confidence boost for the local economy. He argued that any successful large scale development in the family islands will also need local businesses to step in to provide auxiliary services.
Sands-Feaste said she hopes to use her presentation at the Business Outlook to provide practical examples to business operators in Eleuthera - whether they be vacation rental operators or 'mom and pop' shops - of some of the issues surrounding VAT, "so they are informed, they have the opportunity to ask questions, and they feel that they have some good insight into what is proposed at the moment."
"Some of the issues, with regard to VAT, are applicable not only to Eleuthera, but other family islands. For example, with developers who would qualify for Hotels Encouragement Act benefits, under the current regime they would be subject to VAT, so it impacts pricing. In the family islands, there are additional costs associated with development; it's more difficult to get there, the cost of labor is higher, the cost of fuel is higher, so it has a knock on inflationary effect.
Sands-Feaste said that with many family island business operators involved in, not one, but a variety of local businesses, they could be subject to conducting a "complex calculation" in order to determine their tax liability. Furthermore, with most accounting firms based in New Providence, and many local business operators not used to having to travel to the capital for business purposes, there is a "practical issue" to overcome as businesses seek to comply.
She added, "The timing of rendering invoices could be problematic. In the family islands, the businesses tend not to be, or a smaller proportion of businesses tend to send invoices on a monthly basis, most people sort of render an invoice as they provide services; so, again, the fact that VAT needs to be paid by the 21st of the following month will impact cash flow, which is more acute in the family islands for businesses, in terms of how invoicing will be done," said the attorney.
Completing the slate of speakers for the 2014 Eleuthera Business Outlook are: Prime Minister Perry Christie; Scott Gorsline, VP operations, Cape Eleuthera Resort and Marina; James Malcolm, VP & managing director, Sand Piper Inn and Destination Schooner Bay Ltd.; Juan Pulido, project manager at Cotton Bay Holding Ltd.; Angela Cleare, founder, ABC Tours & Consulting Co.; Christopher Maxey, founder and director, Cape Eleuthera Island School; Arinthia Komolafe, managing director, The Bahamas Development Bank and Edrin Symonette, farmer and entrepreneur.
Bahamian booking engine, BahamaGo.com will partner with The Counsellors for the event.
The Second Annual Eleuthera Business Outlook is open to the public, but requires registration. Those interested in attending are advised to contact the Eleuthera Chamber of Commerce or The Counsellors Limited.

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