The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian tax authorities yesterday asserted they have “learned from our mistakes” as it emerged companies with outstanding bills are only being issued with tax compliance certificates valid for one month.

Dexter Fernander, the Department of Inland Revenue’s (DIR) operations manager, told Tribune Business it has seen too many instances where “bush crack, man gone” and it will no longer issue tax compliance certificates (TCCs) for extended periods of time to companies that owe due taxes to the Public Treasury.

Speaking after businesses complained that the one-month TCC, which they need to clear imports through Customs, conduct other business with the Government and access essential public services simply means “more bureaucracy and red tape’, he added that lenient approach towards tax dodgers and defaulters has simply not worked.

Mr Fernander told this newspaper that previous experience, when TCCs valid for three months were issued to tax delinquent companies, had been that many simply did not follow through on paying their obligations or complying with payment plans. As a result, the Department of Inland Revenue has been left with little choice but to intensify its crackdown and tighten the enforcement net.

“There’s two reasons why someone will only get it for one month,” Mr Fernander explained. “If you got it for one month, that means you have outstanding taxes with one of the regulators; that there is either an outstanding obligation they owe to another of the agencies or they are on a payment plan. If someone is on a payment plan that [the TCC] is issued for one month.

“Do you have some outstanding obligations with Customs, Immigration or NIB? It may be that they come back and say they are waiting for some type of payment plan or we are awaiting payment. If that is the case, it is issued for one month. If someone is in good standing, you get it for three months.

“If a person is on a payment plan for real property tax, and real property tax is due on May 2, they will only get a certificate for a month until it is paid. We have learned from our mistakes. We used to issue it for three months, and it was ‘bush crack, man gone’. We learned from those trends and we will not issue it for a long period. That’s what we’re doing. We’ve changed our behaviour at the Department.”

Businesses must be compliant with a whole host of taxes, including VAT, real property tax and Business Licence fees, to obtain a TCC along with National Insurance Board (NIB) contributions and Immigration work permit fees. Without such verification, it can become extremely difficult and complex to do business, especially with government agencies such as Customs.

Mr Fernander said the Department of Inland Revenue had too often listened to the pleas of businesses, promising they will come back to settle outstanding tax bills and begging to be issued TCCs, only to never see or hear from them again for an extended period. The one-month validity, he added, will encourage companies to live up to their word.

“We’re connecting with other agencies,” the Department’s operations chief added. “Some persons will run to us saying they paid NIB, and when NIB runs a report they’ve only paid for previous years in the past, and it’s not a valid current payment. This is a new year. We’re lenient, and are trying to give you one month until you resolve the matter, and then we will renew it for three months.”

One business, speaking on condition of anonymity, yesterday confirmed it had only received a TCC valid for three months despite being current with its taxes. “You used to be able to get a TCC valid for six months,” he said. “If you submit an entry to Customs you have to submit that. It’s only valid for a month so I’m curious if they are trying to squeeze collections.

“You have to be up with real property tax, you have to be up with VAT filings, you have to be up with Business Licence fees you have to be up with everything. You also have to tie in with NIB. It’s across the board for everyone. Any interaction with a government department you have to provide a copy of that.

“If you have to have someone put in for the letter every month instead of six months, it’s more bureaucracy and red tape. I understand what they’re going after. Are they having trouble with people not staying current?”

Timothy Ingraham, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, yesterday said he was unaware of the Department of Inland Revenue action. “It’s not been brought to the Chamber’s attention but I will make some inquiries about it,” he said, “and let you know what those inquiries turn up.”