Addressing the Abaco Business Outlook conference, Abaco Chamber of Commerce (ACC) President, Ken Hutton, highlighted the impact of unlicensed businesses a list of issues facing the Abaco business community.
“Unlicensed businesses and competition are probably one of the biggest problems here,” he said.
“Unregulated settlements have their own energy generation, barber shops, food stores and supply depots, none of which are licensed or pay VAT. This is a completely unregulated economy taking away from registered businesses. This is something the Chamber is very concerned about. We are hopeful and want to work with the Government to bring these unregulated neighborhoods and developments into compliance.”
Mr. Hutton also noted the non-payment of taxes on rental properties cost the government valuable revenue. “We support regulated legal businesses. There are a lot of second homes on Abaco and, fortunately, most of their homes are managed by companies here on Abaco,” he said.
“There are a few, however, renting their properties through overseas websites and never give the Government its due. This hurts existing businesses that are paying their taxes and short-changes the Government of needed tax revenue. There has to be a regime where any kind of non-occupied home must register.”
Mr. Hutton said the push back over real property tax reforms had created a sense of insecurity and instability in the economy among second homeowners.
“A lot of second homeowners were taken aback. There was a lot of appraisals that came in that were rather out of the park. There was no structure as to how those taxes were calculated and renegotiated,” he said.
“I believe that is now being handled, but the biggest problem it created was a sense of insecurity and instability in the economy. The second home ownership is the driving force of this economy right now, and when you throw something like an increase in real property taxes of something like 1,500 percent people get scared and start to rethink their current and future investment.”
In a long list of issues facing businesses in Abaco Mr. Hutton noted BPL (though recently better), Road Traffic Department issues with driver’s license and license plates, inadequacies at the New Medical Centre and Airport, lack of road signage, rental housing, impacts of real property tax debacle and shrink facilitation of banking among other issues.
Mr. Hutton spoke about the cost of doing business being very high in Abaco with the cost of energy five times more expensive than Florida, with Florida paying as low as nine cents a kilowatt hour, verses fort three cents in Abaco.
He added that expensive shipping stymies local businesses ability to be competitive. He gave the example that a container shipped from China to Freeport costs $1400, the same container shipped from Freeport to Abaco costs $1500.
He said diversification is needed for Abaco’s future as the island is dependent on the one-trick pony of tourism. He suggested Information Technology and Special Economic Zones be developed to help diversify.
Mr. Hutton added that the lack of rental accommodation is also affecting Abaco.