FALL NEWSLETTER 2014
Commodore's Corner: John Conley
In their synopsis of the Long Island North Fork Rendezvous (below), Peter and Val of S/V Valerie Arden said it well: "In the Northeast, it was an extraordinarily glorious summer for RMHYC members, both for weather and for friends..." Now, with summer behind us, most of us north of the 26th parallel are turning our attention southward and dreaming of another wonderful season surrounded by the Sea of Abaco. It's hard to beat the beauty and convenience of the Abacos and our activities and enduring friendships simply can't be beat by anyone.
Honey, did you pack the...?
There are always a few items that we would like to remind you of before you throw the lines. In this issue, our social chair, John Cummings lists the events that his committee has been planning. If you might be a chef for the "Souper Bowl" competition, don't forget that secret ingredient that makes your dish so special. You can probably find it locally but don't count on it if it's a boutique item. Speaking of boutique, do you have any idea what you wear to a slightly upscale Fire and Ice party? Me neither but I'm thinking I might have to put some glitter somewhere.
Our poor membership chair Ben Bechard gets chased all over by people wanting to renew their membership and when he's not available, poor me. If neither of us can be found, poor you. Please do us all a favor and get that job accomplished at home while you have a good internet connection and a printer for your card.
Susan Harward, who covers donations for us, reminds willing members that Every Child Counts has a wish list published on the internet and if you could possibly help out that would be great. Cases of copy paper and markers for white boards are always needed! http://www.everychildcountsabaco.org/our_wish_list.html
Life in the Abacos
I got a note from Andrew Sweeting saying that Abaco Beach Resort had a teriffic summer season. Their Custom Boat Shootout with 50 boats participating, was the largest tournament in the Bahamas for some time. The refurbishing of the pool bar has been completed and it now sports a beautiful mahogany surface. They have also reconfigured the wifi antennas and developed a sign-in page that will track the number of guests connected and help keep non-guests from using the service.
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As you may know, a revised version of the Value Added Tax was approved in July. A tremendous amount of training and groundwork must be completed before it can be successfully implemented and many questions are yet to be answered. We don't know, for example, if those of us who pay for our slips before the start of the tax will be liable for the tax that is assessed afterward when the rental actually occurs. My gut tells me we will. Fuel is another transition issue and I for one, plan to top off when we arrive in November rather than when we head back.
Over the summer, I have read the Nassau newspapers on a daily basis and often referred back to the government's web site for clarification and confirmation in order to keep up with this issue so that I could communicate with you. My take on the situation is written below. I have tried to be completely factual and accurate but please do your own due diligence to make informed conclusions.
This summer, the Bahamian government approved the long debated Value Added Tax (VAT), effective January 1, 2015 at a rate of 7.5%. The new measure is intended to re-invent the way Bahamians fund government services, which has been increasingly inadequate since the nation's independence in 1973 and is rapidly getting worse. By 2007, the nation's cumulative debt had reached 37% of the gross domestic product but jumped to 59% in 2013 and is still climbing. That level of borrowing is the result of "annual deficits that are more than double similarly rated peers," according to Moody's which downgraded the nation's credit rating this September. Left unchecked, these shortfalls will eventually cause the country to lose all access to credit markets to pay their current bills and into a state of bankruptcy.
No one likes paying taxes but we all expect well paved roads, a secure environment, good schools and services, each of which require increased revenues in a developing economy. The Bahamas' revenue stream has clearly not kept pace with modern needs. At the heart of the income problem (expenditures are a topic for another day) is the country's archaic reliance on import duties and excise taxes and the difficulty in collection. Today, it is estimated that only 30% of country's economic activity is related to the sale of taxable goods but 70% is related to the sale of services which are untaxed; no income tax, no sales tax, nothing of substance to share the tax burden more equitably. Further, this archipelago is rife with opportunities for individuals and companies to "fly (or sail) under the radar" and avoid duties completely or to return a favor to a cooperative customs officer. A VAT has the potential to be a more controlled and comprehensive system particularly because it extends to the service sector and non-compliance has inherent costs.
So, what exactly is a VAT? As proposed in the Bahamas, it is a tax that is:
- Charged on nearly all goods, services and commercial activities;
- A consumption tax because the end consumer ultimately pays the tax;
- Not a charge on businesses;
- Charged as a percentage of price. Prices displayed, such as on a store shelf or menu are to be inclusive of tax, not tacked on at the register, like a sales tax. This provision has been resisted by many vendors who would prefer it to be "exclusive" and it may be reconsidered;
- Collected in pieces through a system in which businesses forward to the government the tax they have collected (output tax), less the tax they have paid to suppliers (input tax). In other words, the consumer pays a total additional 7.5% on the purchase based on the value added at each step of production, rather than the tax being compounded at each step as with a sales tax. (see sidebar graphic)
It is mandatory that businesses with gross sales in excess of $100,000 register as VAT collectors and only businesses that display a registration certificate can charge VAT. Registration is optional for those with less sales income but there is an incentive to register and maintain compliance because only registered businesses can be rebated for the taxes they paid to suppliers, hence a built-in non-compliance penalty.
Since the VAT was first introduced there have been many changes made in order to improve the chances of success and still more are likely, so stay tuned. Initially, the tax rate was to be 15% with the elimination of all duty, which scared many consumers as well as the budget bureaucrats. The compromise was a reduction to 7.5% with only modest reductions in duty and excise taxes; sort of a "monkey bar" approach where you don't give up one hand hold before you have a firm grip on the next. Although the administration hopes to lower or eliminate duty rates in future budget cycles in order to achieve World Trade Organization status, it is anticipated that VAT, as it stands now, will cause an immediate inflationary spike of 4 to 5%. Put another way, consumers will pay an extra $50 for every $1,000 spent. Troublesome but surely a more attractive alternative than the social and financial cost of bankruptcy. Let's hope it works.
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Recent headlines from The Abaconian:
Two Migrant Boats Attempting To Make Landfall Reported- RB Defense Force, RB Police Force, Department Of Immigration Are Each Without A Working Boat To Pursue
Minister of Immigration to Public: "Do not give shelter, aid and comfort to illegals"
$500,000 Customs Theft- Case Closes with no Suspects
Hope Town District Forges Close Ties with Florida Cities
39 Central Abaco Blackouts Since June 12th
US Billionaire in Walker's Cay Talks
Construction of New Airport Freight Building Underway
16 US Couples Selected to Wed on 16 Islands in the Bahamas at 16:00 Hours on January 16
Rotary Celebrates 43 Years on Abaco
Marine Resources Indicates Crawfish Numbers/Size are Up
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Every year is a new adventure in the Abacos and I am proud of the contributions our members and especially our Bridge have made in continuing Club traditions into this transitional year of leadership. Those contributions are what keep us coming back year after year. Thank you all-- John Conley, Commodore
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From: John Cummings, R/C Socials
Recently, while walking the beach in Block Island, we met some fellow RMHYC members. The conversation quickly turned to when we were going to head for Abaco.
It's time to start thinking about the coming season. Our opening event will be the Welcome Party on November 18th at Regattas followed by the Holiday Party on December 9th. January 20th brings us the 3rd version of the Souper Bowl, "The Battle Of The Winning Chefs." February has the AGM on the 3rd, followed by the Commodore's Ball two weeks later. This year's theme is "Fire and Ice" so be sure to pack an appropriate hot or cool outfit. March is jam packed with the annual Golf Outing at Treasure Cay on the 5th thru the 7th. Margarita Madness follows on the 10th and finally there is Barefoot Man at Nipper's on the 13th & 14th.
Whether you're spending the season or just visiting for a short time, plan on attending at least one of these events. All are listed on the website's Event Calendar. The calendar is kept up to date so check there frequently for additional information or changes.
Hope to see you in Abaco!
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From: Benoit Bechard, R/C Membership
If you have not yet renewed your membership for 2015, you are encouraged to do so before leaving home. This will enable you to print a current membership card to have on hand when you stop at marinas and businesses that honor our discounts. Renewals are easily completed on-line and can be paid by secure credit-card transaction or by printing an invoice and mailing a check. It is not always convenient or possible to find a club officer who can renew your membership in the Bahamas.
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From: Peter and Val, S/V Valerie Arden
NORTH FORK RENDEZVOUS, JULY 15-16, 2014
In the Northeast, it was an extraordinarily glorious summer for RMHYC members, both for weather and for friends. In mid-July, almost two dozen members traveled from New England, Canada and the Great Lakes to gather on Long Island, NY, for the North Fork Rendezvous hosted by Robert and Rita Wieczorek and Jerry and Belle Lareau. They came by boat, ferry and car for the two-day event, and many stayed longer to enjoy the area's charming villages, vineyards and scenic harbors.
Pepi's, a waterfront eatery in Southold, was our first gathering point, and we lunched under a canopy enjoying the view of Southold Bay. We headed east to Orient-By-The-Sea for dinner, which included birthday wishes to Henry with a cake made by Belle. The next day members toured villages and vineyards, met up for lunch, and a few foursomes tee'd off at the North Fork Country Club, thanks to Robert and Rita. Our day culminated in a grand gathering at Shelter Island Yacht Club, organized by SIYC/RMHYC members Belle and Jerry, where we had a great spot on the upper deck for cocktail hour to watch the evening sailing on the bay, followed by a wonderful meal together. SIYC staff were gracious hosts to those of us from RMHYC-- many thanks! It was hard to leave the North Fork and we sure hope to see another summer rendezvous so well planned in the future.