The Tribune

• Firms fear fines over online payment woes

• But Inland Revenue says ‘not good excuse’

• Other options; many leave VAT last minute

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

BUSINESSES endured “an absolute frenzy” to meet Monday’s VAT payment deadline due to continued “growing pains” with the Department of Inland Revenue’s tax portal, it was revealed yesterday.

Accountants and the private sector disclosed to Tribune Business that some companies struggled to comply with the stipulated timeline for filing and paying December’s VAT collection because the new tax administration portal was not accepting electronic payments via the likes of credit and debit cards.

Besides leaving many businesses fearing they could be hit with financial sanctions or penalties for not meeting Monday’s deadline, concerns were also voiced by service providers that the situation is delaying the collection of due taxes by the Public Treasury and thus disrupting the Government’s cash flow and ability to meet its own obligations in a timely manner.

Dexter Fernander, the Department of Inland Revenue’s operations manager, conceded to this newspaper that the new tax portal is suffering “growing pains” and experiencing “infrastructure issues at peak times” such as the 21st of each month when VAT payments are due.

While the Government’s main revenue agency is asking the system’s developer to provide “more bandwidth”, so that it can better cope with use and demand at deadline time, he added that too many companies “wait for the last day” before they pay their VAT and other taxes.

And Mr Fernander said complaints that companies cannot pay online is “not a good excuse” when they are aware that two other options - wire transfers or a physical visit to a Royal Bank of Canada (RBC) branch - are open to them.

He promised that the Department of Inland Revenue will address legitimate concerns with the function- ing of its new tax portal system as they are brought to its attention, with the Bahamas Institute of Chartered Accountants (BICA) president telling this news- paper that problems “keep coming over and over”.

Pretino P. Albury com- pared the situation to “when you squeeze some- thing, and something on the other side pops open. As soon as you lock it down, something else opens”. He added that BICA had raised the issues its members, working on behalf of corporate clients to make tax filings and payments on their behalf, had experienced with the tax portal when it met the Department of Inland Revenue last week.

“We did raise it a week ago, last week Thursday, and they took all the information we gave them down and said they are going to address it. We are hoping it will be addressed. Maybe they’ve addressed some of them, but other things are happening,” Mr Albury told Tribune Business.

Besides the difficulties paying VAT electronically via the tax portal, the BICA president said other challenges related to the fact tax credits owed to companies are no longer visible in their statements and they now have to “apply and call for it”. Some companies and service provider intermediaries are still struggling to log and sign in, with the uploading of VAT-related information proving to be another concern.

“It just keeps coming over and over,” Mr Albury said, adding that companies are now unsure whether they are making tax filings and payments correctly because the system - which underwent an upgrade in December 2023 - no longer consistently provides acknowledgements and receipts.

He added that the tax portal also seemed to slow down and “keep spinning” at “certain times in the day and night” when usage is at its height. “The Department of Inland Revenue will probably say you’ve waited for the last minute to do it,” Mr Albury said, “but either way, if you’re a last minute person or not, you need to make sure the facility to be able to submit is working.

“It’s an issue. Then you have got Business Licence filings coming on January 31. We’re hoping they’ll fix this situation with the portal. Time is coming fast and firm. Deadlines are coming.” The BICA chief said members have been hearing “a lot of disappointment” from the private sector over the timing of the portal’s upgrade so close to VAT and Business Licence filing deadlines.

“This is one of the busiest times for the Department of Inland Revenue,” Mr Albury added. “Everything is at the same time, and now people are saying they have to deal with the impact of this technology that doesn’t work. Couldn’t it have been rolled out in summer last year?

“It’s just very unfortunate timing; very, very unfortunate, and still we have this demand for deadlines. That’s a huge concern; very, very big. That deadline was today [Monday for VAT], and you can just imagine what is going on. People are trying to get stuff in, submit it. It is an absolute frenzy right now; lots of late nights and early mornings. The deadline’s the deadline, and we’re trying to get through it.”

Mr Albury said BICA members have been collaborating to help and advise each other, passing on experiences and information as to how they overcame particular problems with the tax portal as well as sharing Department of Inland Revenue contacts who can advise and help.

Craig A. (Tony) Gomez, the Baker Tilly Gomez accountant and partner, told Tribune Business yesterday that tax-compliant businesses were fearful of being fined for missing January’s VAT payment deadline due to struggles with the tax portal and added: “It simply just doesn’t have to be this way.”

With VAT account- ing for 48 percent of the Government’s 2023-2024 tax revenue projections he warned that the situation could also impact its cash flow and the Public Treasury’s ability to meet its obligations in a timely manner.

“The impact would be that no entity truly appreciates having to scramble close to deadline,” Mr Gomez said. “Deadlines are supposed to be reason- able and achievable, and the mere fact that many good corporate citizens, many compliant corporate citizens are trying in earnest to achieve the deadline and there are several hurdles to overcome as they relate to the filing system that have occurred, that does not allow for compliant business owners and entities to make proper filings for VAT and Business Licence compliance.

“When systems like this are implemented, it must be seen by those who have implemented them to ensure they are without roadblocks and hurdles; that both sides can make the filing and the Government receives its taxes.

“We are certain that the system issues and hurdles will be resolved because the Government, or the Department of Inland Revenue, and the country are in need of those taxes and will do whatever they have to do to make sure the filings are complete,” Mr Gomez added. “It simply just didn’t have to be this way.

“All the service providers, particularly the accounting firms and accounting professionals, are moving with extreme haste to ensure their clients are compliant with the new regulations file on time and remain in good stand- ing with the Department of Inland Revenue.”

Timothy Ingraham, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman, told Tribune Business that the private sector body has “heard of some continuing issues” with the tax portal. “We have requested information on specific issues brought to our attention by members,” he added

“We will continue to engage the Department of Inland Revenue in the best interest of our members.” Mr Ingraham said the Chamber had provided its members with contact details for the Department of Inland Revenue, which was holding training sessions to take companies through the new process.

Mr Fernander, con- firming the provision of training, said: “A lot of individuals wait for the last day with VAT. We admit we are having some infrastructure issues at these peak times, and we are asking the developer and others agencies within government to have more bandwidth to accommodate more people at the same time.”

As for complaints about the difficulties in making due VAT payments electronically via the portal, he added that companies know they have two other options using wire transfers and RBC branches. “To say you cannot pay VAT online is not a good excuse when you have two other options,” Mr Fernander argued.

“The information is there, so we’re a little concerned when people say they cannot make VAT payments. Unfortunately, a lot of people individuals choose last minute and get returns in on the 21st.” While the tax administration portal may have been upgraded, the VAT return forms have not, and Mr Fernander said the tax authority is committed to addressing all concerns brought to its attention.

“Hopefully we’ll get over these growing pains with the introduction of the new system for the people of The Bahamas,” the Department of Inland Revenue operations manager said. As for the complaint that some firms still have yet to receive their credentials for logging in to the new system, Mr Fernander suggested these woes stemmed from issues beyond the agency’s control.

Dormant or inactive e-mail addresses, he explained, meant that companies and entrepreneurs did not receive the December notification about the migration to the new system. More than 51,000 such notifications have gone out via e-mail, but some went to agents and third- party providers who had set up addresses for taxpayers rather than the companies themselves.

Some 513 taxpayers with old Cable Bahamas “Coralwave” addresses were among those that the Department of Inland Revenue struggled to reach, Mr Fernander said, as he urged companies still experiencing difficulties to contact the agency. “We have staff working overnight to address these e-mails and get them out ” he added.