by Jerome Pinder
Over the last two days, I have heard from several business persons that Christmas sales were not as good as they hoped for. Some have said that sales were down by as much as 50%, compared to the previous year. If this trend is more wide spread, it offers little hope for the New Year, as many small businesses were holding on to see if Christmas sales would pull them through. Will the Country now be faced with more closures and layoffs in the first quarter of 2010?
Business persons this season also faced a rise in competition from street vendors, in addition to the global recession. From what I see and understand, we have allowed a flea market to be born at R M Bailey Park. Certainly from a drive by, I do not see any business licenses hanging from the tents. Do these street vendors have licenses to operate? Do they pay any fees to Government? Do they pay fees for use of the park? Do they pay NIB contributions for themselves?
While I appreciate that the above individuals are trying to earn a living, they are placing unfair competition on the legitimate business persons who are employing Bahamians, paying NIB contributions, paying rent, business licenses, duty, etc. etc. How can they be expected to compete with an unregulated person selling from under a tent? Will we have shot ourselves in the foot when the legitimate businesses are forced to layoff staff in the New Year? Business Persons know how difficult it is to operate in this Country in the good years, not to mention the unprecedented challenges faced in 2009.
On a related subject, I understand that the Cruise Line 10 bag per cabin policy has facilitated many of these imports for the Christmas Season. While I am not proposing that we interfere with free enterprise and have this 10 bag policy restricted, it would certainly be interesting to see what customs revenue was collected at the Port over the holiday season? From media reports, Customs did not have the man power on the dock to handle the baggage volume. What was the average custom duty claim for a cabin bringing 5 to 10 bags back? Would we have been better off to impose a fee per bag at the Port? Say $50 per bag, so for 10 bags a cabin had to pay $500 in duty. This would have resulted in less man power and I would guess more revenue for the Country.
So, did this unregulated market steal Christmas for the legitimate business person? The New Year will tell us.
So true Jerome.If they do pay any fees, I will wager that they do not come close to what most business pay & if they did, their prices would have to go up dramatically.As it stands right now, it seems to me that the Government should ease up on businesses, just so they do not have to lay off people.They seem to think the opposite.
Pinder I agree with you on the unregulated “street” businesses. They should answer to the same laws and regulations as any other business… what about phone card sales??? The laws are in place, however, like most of our issues, it is the enforcement of these laws that is sadly lacking.
I am not in total agreement with you on the cruise ship 10 bag policy. If the volume is there, Customs should have put adequate manpower at the port. Maybe customs officers could have made a little of that overtime that they were fussing [on go-slow] about. Certainly if what I heard was close to true, there was a large enough $$volume to warrant more customs personnel there. Once again the Govmt. failed to react quickly enough.
I am not condoning smuggling in any form, however, a $50 per bag fee is not the answer… not when you can put $10,000+ in cell phones or electronics in one bag.
I also wish I could say that all of our “legitimate” businesses pay their import duties by the letter of the law, but we know that doesn’t happen. There are too many businesses here, that hire Bahamians and pay NIB fees and pay business license taxes… and smuggle goods in like pirates! This is happening in every retail industry here. Its all about enforcement and thats where we need dramatic improvement. In customs, in the judicial system, in immigration, in this crime wave….etc. etc.
You are right with extra manpower if the system would have worked. However, if you were to compare what we collected in revenue at the port over the Holiday and then calculate the per bag fee, I am sure the fee would have landed us with more revenue. In addition, if we are going to pay overtime for the manpower, then this has to be deducted from the revenue taken in.
There is a valid concern about licensing and that is it crowds out competition, and competition is good for the consumer.
Also, licensing does not necessarily improve service.
See Milton Friedman’s take on it in a chapter called Occupational Licensure (in Capitalism and Freedom, 1962).
Buy it here: http://bit.ly/OiUlb
Please visit the new Party of the people, for the people and by the people.
National Development Party
http://www.nationaldevelopmentparty.com
this party might have the anwser to most of our ills.
Any political grouping that calls for government to solve our problems is going down the wrong path RJD.