A leading attorney yesterday said that an order extending duty concessions for building materials in the Family Islands delivered "much needed relief" and could spur a surge of housing developments for several Family Islands previously excluded from the program.
Family Islands Development Encouragement Order, 2015, tabled during the opening of the budget debate earlier this week, extends the exemptions on customs duty and excise tax on building materials under the Family Islands Development Encouragement Act to Eleuthera, Abaco, Bimini, and Grand Bahama (excluding the port area).
Higgs & Johnson partner Christel Sands-Feaste told Guardian Business that while there was always the hope that the concessions under the act would be expanded to cover other equipment and infrastructural upgrades for Family Islands businesses, the current proposal is still a "positive step" for construction projects in the four islands.
"This is definitely a positive step that will certainly provide much-needed relief in those islands. This will certainly provide relief and will provide a mechanism whereby persons who wish to upgrade their infrastructure will be able to import the necessary materials duty free," she said.
The exemptions for building materials for islands covered by the act go beyond construction materials, covering electrical and mechanical materials for use in the construction of new buildings and also the rehabilitation, remodeling, or extension of new or existing buildings. The exemptions also cover any machinery imported for the use of land clearing for farming or construction purposes. The accompanying Family Islands Development Encouragement (Extension of Time) Order, 2015 extends the benefits of the encouragement act to June 30, 2016.
While the cost of doing business in the Family Islands remains high through value-added tax (VAT) and high shipping costs, Sands-Feaste argued that the possible extension of exemptions constituted a needed "leveling of the playing field" for taxes outside of New Providence.
Sands-Feaste noted that the exemptions could encourage hesitant business owners and homeowners to launch new developments in the effected islands. Sands-Feaste last week addressed the shortage of affordable housing on Eleuthera during last week's Eleuthera Business Outlook (EBO) and stressed the need for middle-income accommodations, particularly for young Bahamians drawn back to the Family Islands for work at large-scale developments.
With the heads of agreement signed for a $100 million Four Seasons development in South Eleuthera and Prime Minister Perry Christie's recent announcement of an approval in principle for a $94 million development on South Cat Cay near Bimini, Sands-Feaste said the encouragement act is well-timed to boost construction starts across the country.
"This goes a very long way and is a much, much needed tax relief, I believe, to really stimulate those communities in islands like Eleuthera and Abaco," said Sands-Feaste.
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