The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ministry of Finance's top official yesterday voiced optimism it will "not be a big problem" for Bahamian companies with annual turnovers exceeding $5m to file and pay their VAT returns within 14 days.

Simon Wilson, the financial secretary, speaking after legislation was tabled in the House of Assembly to reduce the filing time available to major firms by one-third, told Tribune Business the move was linked to the Davis administration's plans to set-up a Large Taxpayer Unit.

The VAT Amendment Bill 2023, which defines a "large taxpayer" as an entity with annual turnover of $5m or more, stipulates: "A registrant that is a large taxpayer must file with the Comptroller a VAT return in the prescribed form within 14 days after the end of each tax period whether or not tax is payable by the registrant in respect of the period."

The VAT sum due must also be paid within the same 14-day period, and large taxpayers will be prevented from gaining an extension to the filing timeline is this is passed into law. And the VAT comptroller also has the ability to identify companies as "large taxpayers" in the VAT rules.

"Clause 11 of the Bill amends section 47 of the principal Act to require large taxpayers to file returns and pay VAT within 14 days after the end of their tax period and to prevent large taxpayers from requesting an extension of time to file a VAT return," the Bill's "objects and reasons" state.

All VAT registrants, who must have an annual turnover exceeding $100,000, presently file their returns and tax payments within 21 days of the period end regardless of whether they are monthly or quarterly filers. Now, monthly filers with an annual turnover exceeding $5m will see the time they have to submit accurate returns and payments cut by one-third.

Mr Wilson, though, said there was nothing unusual about the move and it was in line with established practices worldwide. "In most countries in the world, large taxpayers file and pay weekly," he said. "Some file and pay bi-weekly, some file and pay within three to four days. These are the most sophisticated taxpayers, so we don't see it as creating a big problem."

Asked whether the goal was to improve the Government's cash flow by reducing the time to file and pay to 14 days, Mr Wilson conceded: "One eye was on doing that. Really, we think the idea is we can provide superior service to large taxpayers. These services will be enhanced even more with this unit. We do already provide special services to large taxpayers.'

The financial secretary confirmed that the reduced VAT return filing timeline was directly linked to the Government's creation of the Large Taxpayer Unit, which was confirmed by the Prime Minister yesterday. Mr Wilson said it should be created by this summer. "Really the focus is to provide better services to our larger taxpayers. That's the idea. I think it's ready," he added.

"We will establish a Large Taxpayer Unit to improve compliance and revenue collection from the 100 or so businesses that account for $1.7bn in taxes," Mr Davis said yesterday. "We will implement a national revenue targeting centre that uses technology to identify anomalies in revenue reporting among taxpayers, which will lead to more efficient audits.

"And we will improve revenue collection in the Family Islands by increasing staffing levels in revenue collection agencies. In other measures, we will introduce and implement an updated fee schedule for the registration of pleasure crafts to address chronic revenue underperformance in the marine sector.

"We want our state-owned enterprises (SOEs) to succeed, and we are determined to improve transparency, efficiency and profitability in the way they operate. We have decreased the budget allocation for SOEs from the previous Budget," he added.

"We will also issue clear expenditure guidelines to SOEs to ensure transparency and financial responsibility in the conduct of their businesses to ensure that it confirms with the national fiscal objectives. We will also implement a plan to increase revenue by collecting dividends from state-owned enterprises."

The Government is aiming to slash taxpayer subsidies to SOEs by some $47m, or 7.5 percent, in the upcoming 2023-2024 fiscal year by cutting their allocations from a collective $492.24m in 2022-2023 to $455.229m in 2023-2024. The major reductions involve an $18m slash to subventions for the Water & Sewerage Corporation, and $10m cuts at the Public Hospitals Authority (PHA) and Airport Authority.