The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A Value-Added Tax (VAT) Education Task Force co-chair yesterday urged businesses who did not registered by the Government-imposed November 30 deadline to do so as “quickly as possible”, suggesting their exposure to hefty penalties will increase the longer they take.

Edison Sumner, the Bahamas Chamber of Commerce & Employers Confederation’s (BCCEC) chief executive and VAT Education Task Force co-chair, told Tribune Business that small businesses, such as ‘Mom and Pop’ stores, should take the opportunity to register as well.

“Even though the deadline has expired, the Government and the VAT Unit are still processing applications. The challenge that businesses are now going to have is that there will be some level of penalty, whether it’s a reprimand or a fine,” said Mr Sumner.

“We have been advised that the fine at this time for those who did not meet the November 30 deadline would be as high as $20,000. The longer they take to register, the worse it becomes.

“If they, by the end of December, aren’t registered at all, then those fines are likely going to be increased quite substantially, and it becomes what they call a criminal event, in that they would now be in serious contravention of the law.

“Once that happens, then those businesses would be facing some very stiff penalties by the Government. We are still encouraging businesses to go ahead and get registered, and do so as as quickly as possible to avoid any exorbitant fines to be imposed for non-compliance.”

The Ministry of Finance said some 4,417 applications had been submitted to the VAT Department ahead of the statutory deadline.

It said at least 4,000 of these are to be processed as VAT registrants, with the remaining qualifying for tax identification numbers (TIN) as very small firms who do business with the Government or as entities eligible for refunds under the VAT Act.

“This is just one step in the process, but we are still encouraging business to get registered, and that goes not only for the mandatory registrants but the voluntary registrants,” Mr Sumner said.

“We are already seeing notices going out from businesses, who are also Chamber members, advising that they have been assigned a tax identification number, and they are making appeals to those who do business with them to provide them with their TINs they can set up their systems properly.

“We would encourage the smaller companies, the Mom and Pop shops who have to go and purchase goods from wholesalers for their businesses, to go and get registered.

“The only way they get to recover that money spent is to be registered, and to be able pass that cost on to their customers. VAT was really not meant to be a tax for the businesses to bear.”

Mr Sumner said the Task Force would now begin to turn its attention to consumer education efforts. “We will begin speaking directly to consumers to let them know what will be expected of them, and what they should expect from businesses. We also want to educate them on exemptions, what are zero rated services and help them understand the reduction in Customs duty,” he added.