CHAPTER
289
HOTELS ENCOURAGEMENT |
ARRANGEMENT OF
SECTIONS |
SECTION |
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Promoter may apply to Minister. |
Minister may enter into agreement with promoter
or owner. |
Concessions for existing hotels. |
Exemptions for existing hotels. |
Materials purchased locally. |
How agreements are to be made. |
Penalties for improper use of construction plant. |
Penalties for disposing of construction plant
without payment of duties. |
Penalty for false declaration. |
Penalty for wrongful application of materials. |
Proceedings to be taken summarily. |
How proceedings to be prosecuted. |
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SCHEDULE - Description of Part of New Providence in which
New Hotels may be Built. |
CHAPTER 289 |
HOTELS
ENCOURAGEMENT |
An Act to
encourage the construction of hotels in The Bahamas by providing for the refund
of customs duties and emergency taxes and certain other concessions, and for
the exemption of such hotels from certain taxation, and to relieve existing
hotels from certain taxation. | 30 of 1954
6 of 1955
69 of 1957
32 of 1958
2 of 1961
43 of 1964
18 of 1965
59 of 1965
5 of 1966
E.L.A.O., 1974
5 of 1987
22 of 1989
13 of 1991
31 of 1992
10 of 1993
20 of 1999
37 of 1999 |
[Commencement 22nd
July, 1954] |
1. This Act may be cited as the Hotels Encouragement
Act. | Short title. |
2. (1) In this Act, unless the context otherwise
requires- | Interpretation. |
"all-inclusive
hotel" means an hotel where food and beverage and entertainment are
offered at a fixed price to registered guests; |
"bedroom"
means a room with a capacity of not less than twelve hundred cubic feet
furnished as a bedroom and intended primarily to be slept in; |
"construction
plant" means in the case of a new hotel to be constructed in New
Providence, machinery, equipment, tools and trucks of all kinds used in the
building trades, but does not include machinery for the manufacture of wooden
doors, door-frames, windows, window frames, mouldings, cement tile and cement
block, and, in the case of a new hotel to be constructed in an Out Island,
machinery, equipment, tools and trucks of all kinds used in the building
trades; |
"customs
duties" means the duties of customs levied by the
Tariff Act and any Act passed in amendment thereof or in substitution therefor
and any other duties or taxes now or hereafter imposed upon or payable in
respect of goods imported into The Bahamas, except stamp duties; |
"existing
hotel" means- |
(a) in that
part of New Providence described in the Schedule to this Act, any premises
which at any time after the twenty-second day of July, 1954, up to the
thirty-first day of December, 1955, are licensed as an hotel under the
provisions of the Liquor
Licences Act or any premises in which at any time during the said period is
carried on the business of an hotel and which have not less than ten bedrooms for the accommodation of
guests; |
(b) elsewhere
in New Providence, any premises which at any time after the twenty-second day
of July, 1954, up to the thirty-first day of December, 1955, are licensed as an
hotel under the provisions of the Liquor Licences Act, or any premises in which at any time during
the said period is carried on the business of an hotel and which have not less
than fifty bedrooms for the accommodation of guests or any premises in which at
any time after the twenty-second day of July, 1954, up to the thirty-first day
of December, 1965, is carried on the business of an hotel and which have ten or more but less than fifty bedrooms for
the accommodation of guests; |
(c) in an Out
Island, any premises which at any time after the twenty-second day of July,
1954, up to the thirty-first day of December, 1955, are licensed as an hotel
under the provisions of the Liquor Licences Act, or any premises in which at any time during
the said period is carried on the business of an hotel and which have not less
than twenty bedrooms for the accommodation of guests or any premises in which
after the twenty-second day of July, 1954, up to the thirty-first day of
December, 1965 is carried on the business of an hotel and which have ten or
more but less than twenty bedrooms for the accommodation of guests; |
"materials"
means building materials of all kinds, and all equipment, furnishings,
supplies, and things necessary- |
(a) for the
construction, equipping and furnishing of a new hotel so that the same is
complete and ready to open for business, or |
(b) for the
rehabilitation, remodelling, furnishing, refurnishing, equipping, re-equipping,
air-conditioning or extension of a new or existing hotel, |
and if such
new or existing hotel is to be constructed or is situate, as the case may be,
in an Out Island where there is no central electricity supply
as may be specified by the Minister by order, includes bunker oil and diesel
oil, but does not otherwise include any consumable stores; |
"Minister"
means the Minister responsible for Hotel Encouragement; |
"new
hotel" means- |
(a) in
that part of New Providence described in the Schedule to this Act, any premises
completed after the twenty-second day of July, 1954, [i]* for use as an hotel or residential club,
having not less than ten bedrooms for the accommodation of guests and suitable public
rooms for the accommodation and entertainment of guests, and |
(i) includes
the planting and landscaping of the grounds thereof; |
(ii) includes,
but only to the extent that the same comprises work carried out after the first
day of January, 1965, [ii]** all other buildings, utility
services, airfields, docks, jetties, bridges, dredging, reclaiming and filling
operations, road building and other amenities, works and conveniences necessary
or desirable in connection with the construction thereof and the improvement of
the site upon which the same are constructed; |
(b) elsewhere
in New Providence, any premises completed after the twenty-second day of July,
1954, for use as an hotel or residential club having not less than fifty
bedrooms for the accommodation of guests, and suitable public rooms for the
accommodation and entertainment of guests or any premises completed after the
thirty-first day of December, 1965 for use as an hotel or residential club
having ten or
more but less than fifty bedrooms for the accommodation of guests and suitable
public rooms for the accommodation and entertainment of guests, and |
(i) in
either case includes the planting and landscaping of the grounds thereof; |
(ii) in
either case, but only to the extent that the same comprises work carried out after
the first day of January, 1965, includes all other buildings, utility services,
airfields, docks, jetties, bridges, dredging, reclaiming and filling
operations, road building and other amenities, works and conveniences necessary
or desirable in connection with the construction thereof and the improvement of
the site upon which the same are constructed; |
c) in an Out Island- |
(i) any
premises completed after the twenty-second day of July, 1954, for use as an
hotel or residential club having not less than twenty bedrooms for the
accommodation of guests: |
(ii) any
premises completed after the thirty-first day of December, 1965, for use as an
hotel or residential club having ten or more but less than twenty bedrooms for
the accommodation of guests; or |
(iii) any premises completed after the 26th day of May,
1993, for use as an hotel or residential club having not less than five
bedrooms for the accommodation of guests, |
and
containing suitable public rooms for the accommodation and entertainment of
guests either in such premises or in premises already constructed, and includes
all other buildings, utility services, airfields, docks, jetties, bridges,
dredging, reclaiming and filling operations, road building and other amenities,
works and conveniences necessary or desirable in connection with the
construction thereof and the improvement of the site upon which the same are constructed
and notwithstanding that the same or any part thereof may have been previously
constructed, erected or completed; |
(d) any
premises to which substantial repairs and refurbishment have been carried out
after the first day of June, 1995 for use as an hotel having not less than four
bedrooms in an Out Island and not less than ten bedrooms in New Providence,
Paradise Island or Freeport, Grand Bahama and where, in the opinion of the
Minister, such repairs and refurbishment renders the premises a new hotel. |
"New
Providence", notwithstanding the provisions of the
Interpretation Act or any other Act, means the island of New Providence only
and shall not be deemed to include Paradise Island or any other island or cay; |
"Out
Island" notwithstanding the provisions of the Interpretation Act or any
other Act, means an Out Island as defined by section 2 of the Interpretation
Act and Paradise Island and all other adjacent islands and Cays within ten
miles of the island of New Providence; |
"promoter"
means any person or company or any group of persons or companies acting in
conjunction prepared to undertake the construction of a new hotel; |
"real
property taxes" means the real property taxes levied by the Real
Property Tax Act and any Act passed in amendment thereof or in substitution
therefor; |
"truck"
means a motor vehicle constructed for and ordinarily used for the carriage of
goods. |
(2) In relation to
the definition of "new hotel" in this section the expression- |
(a) "suitable
public rooms" means rooms of a size and number as the Minister may deem
adequate having regard to the size, type and location of the proposed hotel or
residential club; |
(b) "substantial
repairs and refurbishment" means repairs and refurbishment to any hotel
with an estimated cost of the materials being not less than 50% of the market
value of such hotel and expended over a period of not more than three years. |
3. Any promoter or owner who desires to
erect, repair or refurbish premises for use as a new hotel may make application
to the Minister for the approval thereof. Every such application shall be in
writing and shall contain full particulars of the proposed new hotel and its
amenities and an estimate of the cost thereof, and shall be accompanied by a
plan showing the proposed location of the new hotel, by plans and drawings of
the proposed building or buildings, and by such other information as the
Minister may require. | Promoter may apply to Minister. |
4. (1) The Minister
may, if satisfied that the erection, repair or refurbishment of the premises
for use as a new hotel will be in the best interests of The Bahamas, enter into
an agreement with the promoter or owner providing for the following matters or
any of them, namely- | Minister may enter into agreement with promoter or
owner. |
[iii](a) for the exemption of the promoter or owner from the payment of all
customs duties in respect of all materials necessary for the construction,
equipping, furnishing and completing of the new hotel which may be imported
into The Bahamas, purchased or taken out of bond therein by the promoter or owner
during such period as the Minister may determine, upon the furnishing of a bond
in a form to be approved by the Comptroller of Customs with such sureties (if
any) as may be required by the Minister of Finance in double the amount of any
customs duties which would ordinarily attach on importation thereof for the
payment of such customs duties on a date to be fixed by the Minister of Finance,
such bond being conditioned to become null and void if, on or before the date
specified in such bond, such materials are applied only for the purpose
specified in such agreement: |
Provided that the Minister may by Order
in the case of a hotel situated in a Family Island specify the exemption from
the payment of stamp duties payable in respect of the importation of any
materials under this section. |
(b) for the
importation into The Bahamas free of all customs duties for such period as the
Minister may determine by the promoter or owner (or by any contractor
employed by the promoter or owner or by any subcontractor employed by any such
contractor) of the construction plant required for the construction, equipping,
furnishing and completing of the new hotel upon the furnishing of a bond in a
form to be approved of by the Comptroller of Customs with such sureties (if
any) as may be required by the Minister of Finance in double the amount
of any customs duties which would ordinarily attach on importation thereof for
the payment of such customs duties on a date to be fixed by the Minister of
Finance, such bond being conditioned to become null and void if such
construction plant shall be re-exported from The Bahamas on or before the date
specified in such bond; |
(c) for the
exemption of the new hotel (and all buildings comprising the same and all
additions thereto and the parcel of land upon which the same shall be situate)
from the payment of real property taxes and any other taxes now or hereafter
imposed on real property for a period of ten years from the date on which the
new hotel opens for business; |
(d) for the
exemption of the new hotel (and all buildings comprising the same and all
additions thereto and the parcel of land upon which the same shall be situate)
from the payment of real property taxes and any other taxes now or
hereafter imposed on real property in excess of twenty dollars per annum for
every bedroom therein for the further period of ten years commencing on the
first day of the eleventh year after the date on which the new hotel opens for
business; |
(e) for the
exemption from direct taxation upon or against the earnings of or from the new
hotel and its amenities, and all additions thereto, and upon or against any
rentals paid in respect of the letting or sub-letting thereof for a period of
twenty years from the date on which the new hotel opens for business, and if
the promoter
or owner or operator of such new hotel is a company, then also for the
exemption from direct taxation upon or against any dividends declared in
respect of the shares of such company or any interest paid by such company in
respect of its indebtedness for the said period of twenty years; |
(f) for the
admission into The Bahamas of key personnel and special workmen both during the
construction period and during the operation of the new hotel, subject to the
proviso that at all times seventy-five per centum of the total number of
persons employed in the construction or operation of the new hotel shall be
natives of The Bahamas if such natives of The Bahamas are available to perform
the several and respective services required; |
(g) that no
Governmental restrictions, regulations or conditions shall be made affecting
the operation of the new hotel which do not similarly affect all similar hotels
and that no legislation will be enacted affecting the operation of the new
hotel which does not similarly affect all other similar hotels; and |
(h) for such
other matters and concessions as the Minister shall deem fit and proper having
regard to the type and location of the new hotel; |
(i) the
exemption of real property tax granted under paragraph (d) may be for further
periods of up to ten years provided that the hotel property has been well
maintained and refurbished and in which case- |
(i) the
payment of real property tax in respect of an hotel in New Providence or
Paradise Island shall be two hundred and fifty dollars per annum
for every bedroom therein; |
(ii) the
payment of real property tax, if applicable, in respect of an hotel in an Out
Island shall be one
hundred dollars per annum for every bedroom therein. |
(2) Every such
agreement shall contain covenants on the part of the promoter
or owner for the construction, equipping, furnishing and opening of the new
hotel and for such other matters as the Minister shall deem fit and proper
having regard to the type and location of the new hotel. |
(3) Every such
agreement shall contain mutual covenants on the part of the Minister
and the promoter or owner providing for the following matters, namely- |
(a) that the
concessions granted by such agreement shall remain in full force and effect so
long only as the new hotel shall continue to be used and operated as an hotel
or hotel and cottage colony; |
(b) that
nothing contained in the said agreement shall be deemed to make the promoter or owner liable to pay to the Government
any payments in respect of any matter or thing done, executed or happening
prior to the date on which such agreement shall cease in respect of which
matter or thing payment is waived thereby, or to refund or to repay any customs
duties which have been refunded to the promoter or owner under the concessions
granted by such agreement except in the circumstances specified in section 12
of this Act; |
(c) for the
arbitration of all questions and differences between the Minister and the promoter or owner; |
(d) for the
interpretation of such agreement according to the laws of The Bahamas. |
[iv](4) The Minister of Finance shall
designate public officers to be inspectors for the purposes of this Act, and
every such agreement shall provide for such safeguards as the said Minister may
require as to inspection of the site of the new hotel, and of the building
being erected thereon, and of any storeroom, warehouse or other place under the
control of the promoter or owner in which materials
intended for use in connection with the new hotel shall be stored, so as to
ensure that- |
(a) in the case
of any agreement made under the authority of this Act prior to the coming into
force of the Hotels Encouragement (Amendment) Act, 1992, customs duties shall
only be refunded in respect of materials used, or which could reasonably be
presumed to have been used, in the construction, equipping, furnishing and
completing of the new hotel; or |
(b) in the case
of any other agreement, all materials in respect of which customs duties have
been exempted pursuant to the provisions of any agreement made under the
authority of this Act, are used, or can reasonably be presumed to have been
used, in the construction, equipping, furnishing and completing of the new
hotel, |
and for such
other safeguards and matters, including the keeping of records, as the Minister
of Finance shall deem fit and proper in the circumstances. |
(5) The
Minister may extend the period during which construction plant may remain in
The Bahamas so that such construction plant may be employed in the construction
of one or more new hotels in respect of which agreements have been entered into
by the Minister pursuant to the provisions of this section. |
(6)
Nothing contained in this section shall affect any agreement which was made
under the provisions of the Hotels Encouragement Act or a Heads of Agreement
signed by the Government of The Bahamas and which was in force immediately
before the coming into force of this section. |
5. (1) The owner of an existing hotel desiring to
obtain the concessions hereinafter granted in this section may make application
to the Minister at any time after the coming into operation of
this Act up to the thirty-first day of December, 1955, for the approval of such
existing hotel for the purposes of this Act. Every such application shall be in
writing and shall specify the location of the existing hotel, the number of
bedrooms contained therein, and the amount of real property taxes assessed
thereon for the year in which such application is made. | Concessions for existing hotels. |
(2) Upon being
satisfied that such application is in respect of premises comprising an
existing hotel within the meaning of this Act, the Minister shall
enter into an agreement with the owner thereof providing for the following
matters, namely- |
(a) that for a
period of ten years from the date of such agreement such existing hotel (and
all buildings comprising the same and all additions thereto and the parcel of
land upon which the same is situate) shall not be subject to the payment in any
year of real property taxes or any other tax now or hereafter imposed on real
property in excess of the amount at which such existing hotel has been assessed
for the year in which such application was made or in excess of five pounds for
every bedroom contained therein, whichever is the lesser; |
(b) that for
the further period of ten years commencing with the first day of the eleventh
year after the date of such agreement such existing hotel (and all buildings
comprising the same and all additions thereto and the parcel of land upon which
the same is situate) shall not be subject to the payment of real property taxes
or any other tax now or hereafter imposed on real property in an amount exceeding
five pounds per annum for every bedroom contained therein; |
(c) that for a
period of twenty years from the date of such agreement no taxes shall be levied
directly upon or against the earnings of or from such existing hotel and its
amenities, and all additions thereto, and upon or against any rentals paid in
respect of the letting or sub-letting thereof, and if the owner or operator of
such existing hotel is a company, no taxes shall be levied directly upon or
against any dividends declared in respect of the shares of such company or any
interest paid by such company in respect of its indebtedness for the said
period of twenty years; |
(d) that the
concessions granted by such agreement shall be granted in consideration of the
operation of such existing hotel as an hotel and shall remain in full force and
effect so long only as such existing hotel shall continue to be used and
operated as an hotel. |
(3) The owner of any
existing hotel in respect of which an Act has been passed or an agreement has
been entered into by the Minister which is still in force at
the coming into operation of this Act whereby concessions in respect of real
property taxes and direct taxation have been granted shall only be entitled to
the benefits of this section to the extent that the concessions granted by such
Act or agreement are less extensive than the concessions granted by this
section. |
6. (1) The owner or tenant of an existing hotel
desiring to rehabilitate, remodel, refurbish, re-equip or extend the same may
submit to the Minister in writing for approval full particulars of such
proposed rehabilitation, remodelling, refurbishing, re-equipping or extension
together with an estimate of the cost thereof, and shall supply to the Minister
such information as the Minister may require. | Exemptions for existing hotels. |
(2) The Minister
may if he decides that the proposal, mentioned in subsection (1) in whole or in
part, set out in the particulars amount to substantial rehabilitation,
remodelling, refurbishing, re-equipping or extension of the said hotel and that
such rehabilitation, remodelling, refurbishing, re-equipping or extension will
be in the best interest of The Bahamas grant a certificate providing for a
reduced rate of duty of 10% on such materials and equipment as the Minister may
approve. |
(3) The
concessions for the substantial rehabilitation, remodelling, refurbishing, re-equipping
and extension of the said Hotel shall only be granted upon satisfaction of the
following- |
(a) production
of a valid hotel licence and evidence of satisfactory payment of hotel room
tax, business licence fees and real property tax if applicable; and |
(b) being a
hotel which in the opinion of the Minister, meets one of the following
standards- |
(i) the
repairs are substantial; |
(ii) the
repair and rehabilitation of the existing hotel will restore a monument as
defined in the Antiquities, Monuments and Museum Act, 1998. |
(4) For the
purposes of this section "substantial" means the rehabilitation,
repair, refurbishing, remodelling, re-equipping or extension of any hotel with
an estimated cost of the materials being not less than 25% of the market value
of such hotel and expended over a period of not more than two years. |
7. Where goods are purchased in The Bahamas for the
construction, equipping, furnishing and completing of a new hotel referred to
under section 4 and the rehabilitation, remodelling, refurbishing, re-equipping
or repairs of a hotel referred to under section 6 the customs duties paid on
those goods shall be refunded by the Comptroller of Customs. | Materials purchased locally. |
8. (1) Every agreement made under the provisions of
this Act shall be expressed to be made by and between the
Minister acting for and on behalf of the Government of The Bahamas of the one
part and the promoter of the new hotel or the owner or tenant of the existing
hotel, as the case may be, of the other part, and shall be executed by the
Minister under the Public Seal and shall be executed by the promoter or the
owner or tenant, if the promoter or the owner or tenant is a person, under his
hand and seal, or if the promoter or owner or tenant is a company, under its
common seal. | How agreements are to be made. |
9. (1) No construction plant imported into The Bahamas
under the provisions of this Act shall be used for any purposes other than the
construction of the new hotel or the project in respect of which the same was
imported except with the consent of the Minister. | Penalties for improper use of construction plant. |
(2) Every person
who contravenes the provisions of this section shall be guilty of an offence
against this Act and shall be liable, on summary conviction, on a first
offence to a fine of four hundred dollars and on a second or subsequent offence
to a fine of two thousand dollars. |
10. (1) No construction plant imported into The
Bahamas pursuant to the provisions of any agreement made under the authority of
this Act may be sold, given away or otherwise disposed of within The Bahamas
unless the full amount of customs duties ordinarily payable upon the
importation thereof shall have been paid into the Treasury, in which case it
shall be lawful for the Comptroller of Customs by a memorandum endorsed on the
bond furnished upon the importation thereof to cancel the same so far as it
relates to such construction plant. | Penalties for disposing of construction plant without
payment of duties. |
(2) Every person
who contravenes the provisions of this section shall be guilty of an offence
against this Act and shall be liable, on summary conviction, to a fine of
two thousand dollars, or to imprisonment for one year, or to both such fine and
imprisonment, and the construction plant sold, given away, or otherwise
disposed of in contravention of the provisions of this section may be seized
and proceeded against in the same manner as goods liable to forfeiture under
the
Customs Management Act, or any Act passed in amendment thereof or substitution
therefor, and the penalty of any bond furnished upon the importation of such
construction plant may be recovered as liquidated damages. |
11. Every person knowingly making a false declaration
for the purpose of obtaining a refund of customs duties
or an exemption from the payment of customs duties, or stamp duties pursuant to
the provisions of any agreement made under the authority of this Act shall be
guilty of an offence against this Act, and shall be liable, on
summary conviction, to a fine of two thousand dollars, or to imprisonment for
one year, or to both such fine and imprisonment. | Penalty for false declaration. |
12. (1) Any person applying any materials in respect
of which customs duties shall have been refunded or exempted
pursuant to the provisions of any agreement made under the authority of this
Act, for any purpose other than for the purpose specified in such agreement
shall be guilty of an offence against this Act and shall be liable, on summary
conviction, to a fine of two thousand dollars, or to imprisonment for one year,
or to both such fine and imprisonment. | Penalty for wrongful application of materials. |
(2) If the person
convicted of an offence under subsection (1) of this section shall be the
promoter, or if the promoter is a company, a director thereof, such agreement
may be cancelled by the Governor-General, in which case all customs duties
refunded to the promoter and all customs duties from the
payment of which the promoter has been exempted, pursuant to the provisions of
any agreement made under the authority of this Act may be recovered from the
promoter as liquidated damages. |
13. All proceedings for offences against this Act and
for the recovery of any penalties under this Act shall be before a magistrate
or justice of the peace having jurisdiction in the place where the offence was
committed, and the magistrate or justice of the peace shall dispose thereof
summarily. | Proceedings to be taken summarily. |
14. All such proceedings may be prosecuted in the name
of the Comptroller of Customs, or the Commissioner of Police, or by a revenue
officer or peace officer. | How proceedings to be prosecuted. |
15. All expenses incurred in carrying out the
provisions of this Act shall be payable out of the Consolidated Fund by warrant
in the usual manner. | Expenses. |
16. Nothing contained in this Act or in any agreement
made thereunder after the coming into operation of this section, shall apply so
as to derogate from the operation of the provisions of the Business
Licence Act. | Derogation. |
17. (1) The Minister may make regulations setting out
the items eligible to receive concessions under this Act. | Regulations. |
(2) The owners or
operators of any hotel granted concessions under this Act may be required to
provide evidence that they attempted to obtain the materials locally or
attempted to obtain locally produced materials at comparable quality, price and
quantity. |
SCHEDULE (Section 2) |
That portion of
New Providence which is bounded on the North by a straight line drawn from a
point which is located on the centre line of St. Albans Road at a distance of
two thousand two hundred (2,200) feet South of its junction with the Southern
boundary of West Bay Street to a point which is located on the centre line of
Village Road at a distance of two thousand one hundred (2,100) feet South of
its junction with the Southern boundary of East Shirley Street (the said
distance being measured along the centre line of the respective roads) on the
East by a straight line running due South (true) from the above mentioned point
on the centre line of Village Road to the Sea on the South by the Sea and on
the West by a straight line running due South (true) from the above mentioned
point on the centre line of St. Albans Road to the Sea. |