The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Chamber’s newly-elected chairman has voiced concern that some companies are “doomed to fail” their upcoming full Business Licence audit because they have been given inadequate time to prepare.

Timothy Ingraham, speaking after Wednesday’s meeting where there was “no movement” from the Government on requiring companies with annual turnover exceeding $5m to undergo a full audit, told Tribune Business: “We can only hope the message gets through.”

Both the Chamber and Bahamas Institute of Chartered Accountants (BICA) have urged the Government to delay the full audit by 12 months, so as to give privately-owned companies that have never had to undergo such an intensive process before sufficient time to get their financial records and resources prepared.

However, Simon Wilson, the Ministry of Finance’s financial secretary, and Department of Inland Revenue, “made it quite clear” that the deadline for $5m-plus companies to submit their audited financials remains April 30, 2024, with a possible two-month extension available to those who can justify it until end-June next year.

“There was no movement in the meeting, but there were some fairly good points put across, and hopefully those will be considered,” Mr Ingraham told this newspaper of the meeting between the private sector, BICA and the Government.

“I would have been surprised if he [Mr Wilson] had changed his mind right there and then, but hopefully he’s heard the arguments and given good weight to the arguments being made when the room is full of chartered accountants and, in half the cases, some businesses as well. We can only hope the message gets through.”

Mr Ingraham reiterated his and the Chamber’s concern that some $5m-plus companies, especially those that have not gone through full audits before, are effectively being set-up to fail - and thereby exposed to fines equal to 1-2 percent of annual turnover - because they are unprepared for what is required and/or may have difficulty locating an auditor and complete the process in time to meet the deadline.

“Everything will shut down for the holiday very shortly,” the Chamber chair said. “I’m sure that that before the year ends the business community would like to have some kind of decision, and hopefully a more favourable kind of decision than we’ve had so far so we know what we’re doing when the calendar year rolls around.

“We’re extremely concerned about it. I spoke to a businessman today who has run a very good business over the years, paid his fair share of taxes, but has never been required to have an audit because it’s a privately-owned company.

“His concern, if forced to get an audit, is will he come out the other end with a good audit because he’s not had time to prepare and are the accounts reliable enough to certify everything in it because he does not have the supporting documents. That could expose his business to hundreds of thousands of dollars in fines. That’s something to be concerned about.”

Mr Ingraham said there were also sufficient concerns among BICA members and auditors that might cause them to “back away” from taking on certain clients for Business Licence verification purposes, thus leaving an inadequate supply of accountants to meet the demand by the deadlines the Government has set.

“If they can’t get their audit passed, they are doomed to fail and will ultimately get fined,” he added. Meanwhile, Michael Pintard, the Opposition’s leader, yesterday backed the calls by BICA and the private sector for a year’s delay in the audit requirement for companies with turnovers exceeding $5m.

Asserting that the “Davis administration must help Bahamian businesses succeed, not hasten their demise”, he blasted: “Over and over this Davis administration demonstrates that it simply has no interest in helping Bahamian businesses succeed and flourish.

“It has virtually discarded the notion of ‘ease of doing business’, and instead has instead foisted any number of unreasonable and draconian measures on small and medium-sized Bahamian businesses since taking office.

“The Opposition supports the reasonable recommendation by the Bahamas Chamber of Commerce and the Bahamas Institute of Chartered Accountants (BICA) to provide an additional 12-month transition time for medium-sized businesses to complete the now required annual audited statements, especially that many of these businesses are just now recovering from the worse effects of the global pandemic.”

Mr Pintard argued that the extension “will not disadvantage the Government in any way, as any tax liabilities uncovered by the audits will remain payable to the Treasury”. Describing the audit requirement as “onerous” and “heavy-handed”, he suggested that the administration is seeking to “squeeze Bahamian businesses” due to “an ongoing cash flow crunch”.

“Yet while the Prime Minister, as minister of finance, demands adherence to reporting timelines, his very minister is unable to get legally required budget and fiscal reports out on time. Between the Ministry of Finance and its Fiscal Responsibility Council, the Government presently has ten reports that are significantly late - some over a year,” the Opposition leader added.

T”he Opposition maintains that the Government should lead by example and bring its reporting up to date, as well as the outstanding audits from state-owned enterprises (SOEs), before it makes stringent demands on Bahamian small and medium-sized businesses.”