A critical step in the development of Freeport was the execution of a Waiver of Exclusivity Agreement with Freeport Harbour Company Ltd., which will allow for expansion of cruise traffic to Grand Bahama, prime minister Perry Christie told the audience at the 19th Annual Grand Bahama Business Outlook (GBBO) at the Grand Lucayan Resort on Thursday, March 9.
“As a result we shall shortly conclude a Heads of Agreement with Carnival for a major cruise port in East Grand Bahama, which will benefit all of Grand Bahama, including Freeport,” he said.
Christie revealed that the new port will take two years to build and within that time frame, “we shall also work assiduously with stakeholders, cruise lines and the public to improve and enhance both the cruise ship port amenities, attractions and cruise visitor experiences in Freeport, as well as to significantly increase the number of cruise ships calling at Freeport.
“It was against this background that my government introduced and Parliament passed the Grand Bahama (Port Area) Investment Incentives Act on 4th May, 2016.
“This legislation creates a new framework for development – one that allows us to compete for global investments, and introduces a new framework of transparency and accountability commensurate with the incentives awarded,” he said.
He added that consistent with international best practices, the legislation will enable licensees of the Grand Bahama Port Authority by application to receive exemptions for a period of 20 years.
“As a result, this legislation is the product of an extensive review, the first of its kind in 60 years, representing the collective work of a bipartisan Review Committee, and a Cabinet subcommittee, supported by a technical team and consultants and including over a year’s worth of input from stakeholders, businesses, and civil society on Grand Bahama Island.”
The legislation is based on the idea that tax concessions, when used properly, can be an inducement to encourage private sector investment and/or employment in sectors that offer the greatest long-term potential for Grand Bahama.
Accordingly, the legislation creates a new framework that will replace and modernize the current approach for tax concessions in Freeport, said the prime minister.
He noted that it is consistent with global best practices, and reflects the government’s commitment to partnering with the Grand Bahama Port Authority to reduce excessive red tape that is impeding investment. It is imperative that we increase the overall ease of doing business in Freeport.
Under the legislation, the same tax concessions that expired last May will be granted by the Government for a period of up to 20 years to existing licensees of the GBPA on an individual basis, subject to meeting development commitments and under a framework that would provide for the maintaining of performance through periodic reviews every two years.
The same framework will apply to new licensees once they submit and obtain approval of their development plans.
“The goal of this new framework is to help this and any future government monitor and evaluate the job creation and economic outcomes that are produced by the economic incentives provided. These requirements will be implemented sensibly, with significant input from Freeport stakeholders,” he said.
Christie said that the legislation also aligns the application of real property tax on large parcels of undeveloped land with the policies in place in the rest of The Bahamas.
Under the legislation, undeveloped land held by non-Bahamians owning more than five acres will be subject to real property tax – as is the case across the country. At the same time, owners of these sizable parcels of land will have ample opportunities to seek relief from any tax liability, provided that they develop the land.
“This policy is sensible and pro-growth, as it creates meaningful incentives for development. It also ensures that we no longer grant millions of dollars in tax relief to land holders who are not investing for the development of Grand Bahama,” he said.
Applications from licensees to avail themselves of these concessions under the Grand Bahama (Port Area) Investment Incentives Act 2016 are being received at the Ministry for Grand Bahama. Existing licensees are encouraged to submit their applications by the extended deadline of April 4, 2017.
Published Thursday, March, 16, 2017