Tour boat operators: We're sinking
Struggling Bermudian tour boat operators have broken silence at what they see as draconian and discriminatory tax burdens which are crippling their enterprises and threatening their very existence.
Speaking exclusively to , eight members of the rekindled Tour Boat Owners Association revealed they have been petitioning Government for months as a formal body to address their concerns, but have not as yet been taken seriously.
While other commercial entities such as hotels, restaurants and charter fishing boats receive wide-ranging concessions from the Ministry of Finance ? including fuel rebates and zero percent duty on materials for refurbishment and spare parts ? tour boat operators claim they have been suffering for years under much higher taxes and sky-rocketing fuel costs.
Some of these tax discrepancies include:
A concession of ten percent import duty on all boats imported from overseas is ultimately rendered useless by a full 33 percent duty obligation if that boat is then sold on to a foreign buyer. Tour boat operators point out that it is in the best interests of their businesses to sell overseas rather than to a Bermudian, as all they would be doing is aiding the competition. Commercial fishing boat enterprises, by contrast, pay no import duties at all when bringing in their boats from overseas.
Payroll taxes for tour boat operators are set at more than seven percent, significantly higher than that of hotels and restaurants.
While commercial fishing operations pay zero percent duty on all spare parts, tour boat operators are burdened with a 22.3 percent duty tax ? something they deem grossly unfair.
While major hotels boasting several bars need only acquire one liquor license, large tour boat companies with more than one vessel must obtain a separate license for each individual vessel.
Previously content to fight the battle away from the media spotlight, it was the discovery that renovated former slave ship the ? in Bermuda for most of the past month ? has been issued a commercial tour boat license by the Ministry of Transport without having to pay duty or secure work permits for her mainly foreign crew, that broke the camel's back and prompted the aggrieved members of the TBOA to bring their plight to the attention of the public.
Not only has the had its duty and immigration obligations waived, it has also been running daily charters for most of May at prices which far undercut those Bermudian tour boat owners can afford to offer.
The former slave ship is also being subsidised $1,000 a day by Government ? with a free boat pilot and tug boat thrown in ? while all the advertising costs have been met by Government as well.
While tour boat operators were at pains to stress they have nothing against the , which they all believe is providing a "positive service" and increasing awareness of the vessel's history, they do have a "serious problem" with its operating license being "fast-tracked" and the taxes being waived when they themselves continue to pay "through the nose" and are struggling to keep their businesses afloat.
"The industry is in real trouble and has been dwindling for some time," said TBOA president Mike Gladwin.
"Tour operators are being forced out of business or are struggling to make ends meet because of the enormous costs associated with running and maintaining our boats. All we have been asking for is to be treated the same as every other sector in the tourism industry. Hotels, restaurants and fishing boats get a whole bunch of concessions while we Bermudian tour boat operators seem to have been forgotten."
One example of the difficulties all boat operators face comes in the form of Beez Evans, owner of Rising Sun Cruises.
In April 2004, Mr. Evans decided to sell his boat to an American couple and buy a new one from Aruba. When he contacted Customs to tell them the boat was sold and the couple were due in to Bermuda to pick it up, he was informed by a Customs agent that everything was in order.
However, when on his way to Aruba to pick up his new boat, Mr. Evans received a phone call from Customs to tell him his old boat had been confiscated and that he must pay the 33 percent duty required.
The unexpected cost pushed the young man to the edge of bankruptcy and without a last-minute personal loan he would have been forced out of business.
He is now heavily in debt, however, and his attempts to pay it off as quickly as possible are being undermined by the floundering industry.
Mr. Gladwin further revealed the TBOA met with Transport Minister Ewart Brown and a representative from the Ministry of Finance Hasan Durham in February of this year to air their concerns.
But while members left both those meetings with a sense of hope and anticipation, no contact or tangible tax reform have been made since then.
"When we met with Hasan Durham he asked us to prepare a wish-list," Mr. Gladwin continued.
"We presented this to him soon after and he said he would then pass it on to the Finance Minister Paula Cox for consideration. We have not heard a thing from either Hasan or the Minister since the meeting in February. I want to make it very, very clear that we have nothing against the or fisherman. We do not want to make it seem we are having a go at them personally. But the fact is we are a predominantly Bermudian industry which makes every effort to employ Bermudians and we are being treated completely differently. It does not make any sense at all. The water is an asset to Bermuda and the tourism industry and it makes sense to help those Bermudians who are trying to make a living from it."
It was particularly galling, he continued, given Government was now well aware of their difficulties, that the should be granted ? "practically overnight" ? the very same privileges they have been asking for all along.
Indeed, when met with the TBOA aboard the last week, members were forced to watch in envy and obvious frustration as the pulled out across Hamilton harbour loaded with paying tourists.
"It's the start of the tourist season and the only reason we're here talking rather than out on the water is that we're being crowded out of the market and don't have the bookings," said one.
"We're being put back into slavery by a slave ship!"
Furthermore, Government is setting a "dangerous" precedent, they said, by allowing a foreign-flag ship to operate in local waters without having to adhere to the same rules and regulations that Bermudian charter boats must do.
More importantly however, Mr. Gladwin concluded, providing them with the necessary duty relief would be a "relatively simple" task.
"At the moment under the particular section of the customs tariffs laws, both research and fishing vessels are exempted from paying duty," he said.
"We are not asking for anything drastic like a entirely new law or anything like that. What we are seeking is an amendment to the tariff regulations to include us in with the research and fishing boats. That is all we require and it would make our lives so much easier and our businesses so much more vibrant. We've heard a lot from Dr. Brown about how he wants to regenerate the tourism industry and we are very much hoping that he can push on our behalf for help. Without out it, our future isn't pretty at all."
Dr. Brown is currently off the Island and was unavailable for comment yesterday.
Mrs. Cox, meanwhile, said Government is constantly reviewing opportunities for duty relief and that tour boat operators, along with a number of other "niche industries", may well be given some assistance in next year's budget.
She would make no firm commitments on what exact changes were under consideration however.
?The Freedom Schooner bids farewell to Bermuda tonight.
Tourism Minister Ewart Brown said that school tours would take place this morning from 9.30 a.m. until 12.30 a.m.
A volunteer reception will take place at the Bermuda Yacht Club from 5.30 p.m. until she sails at 7 p.m. from Hamilton harbour.
