The government of The Bahamas requires that foreign-flagged charter yachts pay a four-percent fee when in its waters. By its own admission, though, the government has not collected the money from visiting yachts in many years. This may now change, however. The Ministry of Finance is considering enforcing the Bahamas yacht charter fee as part of the country’s 2019-2020 budget.
K. Peter Turnquest, the deputy prime minister and minister of finance, revealed the details at a Bahamian business conference this month. “We know there are vessels that come here and stay for six months conducting charter business during that time and not registering as commercial entities,” The Tribune newspaper quotes him as saying. “As a result, The Bahamas gets no revenue.” The fees, Turnquest adds, could be as much as $50 million per year.
The Ministry of Finance is eyeing the Bahamas yacht charter fee in an overall effort to improve revenue. The goal is to enforce existing laws and close loopholes, rather than add new taxes and fees.
Interestingly, a Bahamian marina trade association alerted the government of its lax enforcement and collection five years ago. It came at a time when the government was weighing whether to add VAT to marina stays. Peter Maury, then-president of the Association of Bahamas Marinas, told the Tribune that that the government likely collected just 30 percent of the fees. “We told the Ministry of Finance that rather than put a VAT on these charter contracts, we make it easier for the yachts to make their payments online, for instance,” he explains, in a 2014 article. “If they can get those fees, we could exempt the 15 percent VAT that’s being discussed.” Ultimately, the government voted against VAT.
Tunquest seems to acknowledge the need now to make paying the Bahamas yacht charter fee easier. At the meeting this month, he explained, “We’re putting in place some legislation as well as technology-based solutions to help control that, and hopefully, drive that yield up over the next year. A side benefit will be able to deal with some of the illegal activity happening in our waters because we will be able to tell who, where, when, and what by using data.”