Some Freeport stakeholders have hit out at the government for allegedly proposing to a number of businesses impacted by newly-applied customs fees that they can apply to be made exempt from the increased tax burden under the Industries Encouragement Act.
Fred Smith, a part-owner of the Bahamian Brewery and Beverage Company, which was informed at a recent meeting with the Ministry of Finance last week that the government is set to diminish the "spread" between the tax burden it faces and that of its rival Commonwealth Brewery, said the government made the suggestion to other Freeport businesses at that time that they should seek to access the benefits of the Industries Encouragement Act if they wish to offset an increased tax burden.
"They said they could negotiate benefits under the Industries Encouragement Act with individual companies, but why change a working formula? They should respect the (Hawksbill Creek) agreement instead of creating more paper monsters. We don't need that, we just need government to respect the agreement."
Another Freeport licensee, who declined to be named, said the proposal would suggest the government "doesn't believe the Hawksbill Creek Agreement is worth the paper it is written on", indicating that the agreement alone does not provide the protection from taxation that it was originally intended to.
Licensees of the Freeport area, which is ostensibly under the administrative control of the Grand Bahama Port Authority rather than the central government, have been considering how to approach the government's decision to impose increased tax liabilities upon them in the form of a new customs fee, and environmental levies, in the 2013/2014 budget.
Dozens of business operators gathered at a recent meeting on the topic hosted by the Grand Bahama Chamber of Commerce to discuss their concerns, and it was agreed that they would have lawyers look into the legality of the government's move to impose further financial costs with a view to possible legal action as a group, which is said to be advancing.
Numerous major Freeport businesses, including Polymers International, and Sands beer maker the Bahamian Brewery and Beverage Company, have cancelled previously planned expansions.
Smith said yesterday that if the government continues with its plans to increase the duty Sands pays on each liquid gallon of beer it produces, while keeping its rival's duty the same, it will put the company out of business.
Meanwhile, another major Freeport industrial company was yesterday said to be likely to cancel or indefinitely postpone expansion plans as a result of the impact of the customs fees, although company representatives declined to comment up to press time.
Minister of State for Finance Michael Halkitis has refused to comment in recent weeks on matters relating to taxation and could not be reached for comment yesterday.
Halkitis has previously stated that the government views the new revenue measures as reasonable and necessary as it moves to minimize its deficits going forward.
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