By FAY SIMMONS
Tribune Business Reporter
jsimmons@tribunemedia.net
BAHAMIAN fishermen are struggling with rising fuel costs and the loss of VAT recoveries on business expenses, their Association’s president revealed yesterday, as higher operating costs eat into their earnings.
Keith Carroll, president of the National Fisheries Association of The Bahamas, said the industry has little choice but to absorb the cost increases as it has limited control over the prices buyers are willing to pay for their catch.
“Like everything, we just take it again. We are rolling with the punches, just making less money. That's it,” he said, when asked how fishermen were coping with higher diesel prices. Diesel is selling for $7.44 per gallon, while gasoline prices range from $6.98 per gallon at Rubis to $7.08 at Shell and $7.50 at Esso.
Mr Carroll said the removal of VAT on unprepared food had also affected fishermen's ability to offset operating expenses, including fuel. “If I buy $30,000 worth of fuel right now, that's $3,000 of VAT that I can’t offset. I can't claim that,” he added.
The Government eliminated VAT on unprepared food from April 1, reducing the rate from 5 per cent to zero. However, the decision to treat the products as VAT-exempt rather than zero-rated means businesses selling them cannot recover VAT paid on related inputs to the same extent as under zero-rating. The change has drawn similar concerns from food retailers, who have warned that losing the ability to recover VAT on expenses associated with unprepared food is adding to their operating costs and putting pressure on profits.
Mr Carroll said fishermen previously benefited from being able to claim certain expenses, but that option is no longer available under the new VAT arrangement.
He said operators are left to manage higher fuel and other operating costs while making less money, with little ability to change the prices they receive for their catch.
Despite the cost pressures, Mr Carroll said the lobster season has been a good one, although he did not provide figures on the industry's overall catch or earnings to-date.
He estimated that only around 10 to 15 per cent of the country's lobster catch remains in The Bahamas, with the majority shipped overseas. The industry relies heavily on exports, but fishermen still face operating costs that they have limited ability to control.
“We had a good lobster season last year, probably only about 10 or 15 percent of the lobsters stayed in The Bahamas and everything else was shipped out,” Mr Carroll said.
He added that local fishermen have adjusted to the increased US tariffs, rising from 10 percent last year to 12 percent this year, as they “have no choice”.
“We don't have no other choice. If we come in, and bring our lobsters to the states and they say ‘Well, that's you have to pay’, we have no choice but to sell,” Mr Carroll said.
The concerns add to pressure on the fisheries industry, where fuel is a significant operating expense and rising costs can affect the profitability of fishing trips.