NASSAU, BAHAMAS — The Bahamas Yacht Brokers Association (BYBA) is urging the government to address the impact of its Value Added Tax (VAT) policy on the yacht charter industry, arguing that based on its research, the tax on yacht charters is driving away a large percentage of international yacht business to other more affordable destinations.
The BYBA said in a statement that in light of the growing discussion and debate over newly introduced VAT charges on yacht charters in The Bahamas, it conducted extensive research among relevant Bahamian professionals to gauge the impact of these new taxes on businesses that service the yacht industry.
"Although the international yachting industry has exceeded previous pre-Covid growth predictions to become an $85-billion-dollar industry globally. Our research on the local market has found that the impact has been severe, driving a large percentage of international yacht business to other, more affordable destinations in the region," the BYBA said.
"The recently enacted VAT charge on yacht charters has been touted as a beneficial Bahamas policy as VAT is only charged on foreign-owned yachts. However, the reality is this VAT policy has affected our Bahamian professionals the most, as many professionals who clean, service, provision, or otherwise earn a living from charter yachts have seen a huge drop in business. Some may be forced to leave what was, until recently, a very lucrative industry for them."
The BYBA said that successive governments have had great opportunities in the past to improve, revamp, and restructure the entire yachting business.
It noted, however, that there have only been legislative changes that have affected the fee structure or the taxes to the industry – including the VAT taxes currently enforced on yacht charters booked out of the country.
"This tax was also only implemented to charter yachts and not to cruise ships or flight services which are also booked out of the country. A costly tax collection portal called DigieSoft was also recently introduced for yacht charter taxes and fees. The tax collection portal was funded and mobilized by the government but, to this date, has not materialized and is not in operation. This is yet another missed opportunity to implement an effective portal to assist the local yachting business community in creating efficiency," the BYBA stated.
It further noted that in European yacht destinations, for example, Greece, the yacht charter business is governed by several laws and mechanisms that support and prioritize all relevant stakeholders.
"The understanding is that true growth in a new, niche industry can only occur when the public and private stakeholders work together for the benefit of all. The Bahamas Yacht Brokers Association hereby calls upon the government to address the impact of its VAT policy on the yacht charter industry. We are hopeful that changes can be made that would make The Bahamas a competitive yachting destination once again," the BYBA said.
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