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Monday, July 6, 2009

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Manufacturing: Only one year? By VERNON CLEMENT JONES ~ Guardian Business Editor ~ vernon@nasguard.com: The government will extend by one year tax exemptions for those manufacturers set to lose that concession during the roughest economy in years. "The government is minded to extend it for one year," Prime Minister Hubert Ingraham said from the floor of the House, at the same time tabling the requisite legislation. The move essentially extends wholesale duty exemptions on a host of inputs integral to the manufacturing process. That extension is only for a year and will not apply to manufacturers whose exemptions are due to expire sometime beyond 2009. Under the terms of a tax abatement program meant to encourage and support local industrial production, those operations win only a five-year duty-free window. That notwithstanding, said the PM Wednesday, there are manufacturers who've been receiving the benefits since the 1990s. The government is billing this most recent extension as a way of acknowledging the very difficult economic conditions most Bahamian businesses are grappling with. Ingraham also suggested the policy change may silence critics who charge the government hasn't done enough to support small business during that rough patch. It hasn't. "I'm a little disappointed that it's only for one year," Mark Turnquest, organizer of the recent small business summit, told Guardian Business Wednesday. "At minimum it should have been for five years and those for whom it expires next year should have also been eligible because this economy isn't going to be strengthened until the end of next year at the earliest." Turnquest is also calling for an increase in the scope of incentives offered Bahamian entrepreneurs looking to diversify the economy outside of tourism at the same time create skilled labor opportunities. "There has to be a more serious effort to support manufacturing," he said. Manufacturing as a sector is likely to face increased pressure outside of the recession, specifically, reciprocal trade pacts like the EPA with Europe and the agreement expected to replace the current Caribbean Basin Initiative with the United States. As a group they'll likely decrease the costs of imports to this market, further eroding any incentive to produce locally. Thursday, June 25, 2009