Restaurateurs feel the pinch with new licence fees
Restaurateurs claim they are being kicked while they're down after landing massive hikes in licence fees.
One businessman told
The Royal Gazette his Food Establishment Licence Fee had shot up from $615 to more than $1,400 as a result of new regulations now coming into force.
And with smaller businesses reporting rises from $15 to $100 and $70 to $240, both Opposition parties urged Government not to proceed with the increases introduced by last year's Government Fees Amendment Act.
Government last night apologised for failing to remind businesses that the fee increases were imminent, and explained the previous fees did not reflect their efforts ensuring a high level of quality is maintained.
Donald Hassell, owner of the Country Squire in Somerset, said the extra cost, on top of dwindling numbers of customers, would make jobs even more vulnerable during the credit crunch.
He found out his annual fee had gone from $615 to between $1,400 and $1,500 when health inspectors visited earlier this month.
“I was alarmed at the amount of the increase. It was just unreal. I couldn't believe it,” said Mr Hassell, the United Bermuda Party candidate for Sandys North Central at the 2007 general election.
“You could see ten or 15 percent, but not doubling it with a bit more.
“Things are quiet and we're down 30 percent anyway. We're trying cheaper lobster and other ideas to get customers in, but the profit margins are not great. This is the worst time of the year. We are not even out of our slump yet.
“People might say this is only a one-off payment, but everything counts. Our expenses keep rising. And if we start charging people more we'll sell even less.
“It's a hard time trying to keep your staff employed. Every nail in the coffin wants to make you bail out one more person.”
Mr Hassell said the woman who bakes his lemon pies from home saw her licence fee soar from $15 to $100.
“What hurts me the most is when I hear from individuals that are home cooking,” he said.
“That lady used to bring me one lemon pie a week but I don't think she can afford to carry on because of that licence fee increase. I'm buying from a bakery now.”
The fee changes were approved by MPs and Senators in March 2010, but attracted little attention at the time.
They apply to bakeries, catering establishments, food manufacturers, food stores and delis, refreshment shops and restaurants.
A sliding scale is in place meaning businesses with larger numbers of customers have to pay more.
Bermuda Democratic Alliance finance spokesman Michael Fahy told this newspaper: “We are aware of the changes to the fee, but now surely is not the time to raise and restructure these fees.
“Our information leads us to believe that these figures are going up significantly at a time of severe economic recession.
“The Government should be doing everything it can to
reduce the tax burden for small businesses.
“We know, for example, that the restaurant industry is suffering. We know small food establishments are suffering. All of which are going to have to pay significantly higher fees, in some cases quadrupling.
“While the original sums may seem small in the grand scheme of things, every penny counts in a struggling business in an economy that's almost in freefall.
“We implore Government to put a halt to these changes to encourage and assist small businesses.”
United Bermuda Party leader Kim Swan said: “Far too many local businesses, especially small businesses, are struggling, literally hanging on by a thread.
“I have great empathy for those business owners already feeling the pinch as Government fee increases hit them hard.
“The irony is that a wasteful PLP Government during the years of plenty is now having to rob Peter to pay Paul.
“With the economic downturn these businesses already were experiencing tough times. I urge Government to have a rethink, for this is a time when Government should be easing the burden on small businesses.”
The Ministry of Health said in a statement last night: “We have had quite a bit of feedback from restaurants and salon owners regarding the increases to the fees charged by the Department of Health, and the Department wishes to apologise to all business owners for not providing them with a reminder early in the year that the fees would be increasing.
“The licensing fees charged by the Department of Health are set by legislation, the Government Fees Regulations. The Fees Regulations were amended with effect on April 1, 2010, and these increases came into effect on that date.
“However, businesses are licensed and relicensed at the end of the financial year, so when they were last done (February, March, 2010) they were licensed under the old fees which were still in effect at that time.
“Now the fees have been in effect for a year, but this is the first time that business owners are seeing the new fees. The Department of Health is obliged to charge the fee which is required by the legislation, and the only way to roll the fee back would be for the Government Fees Regulations to be amended.
“The previous fees were very low and did not reflect the work that had to be done to inspect the premises and provide the licences to ensure that the proper level of quality is maintained. The licensing and inspection of food service facilities is a key public health function carried out by the Department of Health.
“The process helps to ensure the quality and safety of the food served to the public, and the current fees reflect the cost of providing the service to the public.”