The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has been urged to set a date for the Central Revenue Agency’s (CRA) creation, the Tax Coalition’s chair fearing that momentum on a tax compliance “panacea” may be lost.

Gowon Bowe told Tribune Business that failing to place the Government’s key tax collection agencies “under one roof”, as the CRA promises to do, would wipe out the gains created by the Value-Added Tax (VAT) registration process.

Describing the CRA as “the sole panacea”, Mr Bowe said it was the only solution currently offered to boost compliance by linking taxpayers’ various payments together.

“What I’d like to see is a commitment on the date,” Mr Bowe said of the CRA. “First it was coming early on in 2015, then it’s by the end of summer. When are you going to have a firm commitment on the date that it will be up and running?

“I’d like to see a date as soon as possible. Whether it’s summer or December, it’s not a big deal. But we don’t want that to be an element sitting out there, and not getting secondary attention.”

The Coalition for Responsible Taxation’s co-chairman was responding after John Rolle, the financial secretary, recently told Tribune Business that the CRA would be operational “well before the end of 2015” from premises on Carmichael Road.

All agencies – the newly-created VAT Department, Business Licence and real property tax units – will be operating from the same location by the fiscal year-end of June 30, 2015.

The Government believes that integrating key revenue streams via the CRA will lead to better efficiency and enforcement in its tax administration, driving greater compliance by being able to cross-check whether companies are fully compliant with their obligations - and tie licence renewals to being current.

Mr Bowe, though, urged the Government not to lose the compliance momentum it had gained through the VAT registration process, where companies had to be compliant with their Business Licence obligations before they could receive a Taxpayer Identification Number (TIN).

“We don’t want to lose that momentum,” he told Tribune Business. “If we get past this registration process, and don’t put the agencies under one roof, we’re going to give up the opportunity gained through the registration process.

“It’s the sole panacea, if you will” the Tax Coalition co-chair added of the CRA. “That is the only attempt or solution that is going to drive compliance up.”

Without a fully-functioning CRA, Mr Bowe warned that the Government’s tax collection and enforcement activities would remain “disjointed”, with multiple agencies each doing their own thing without any cross-checking or pooling of resources.

“Until we get that under one umbrella, we always have these challenges come up,” Mr Bowe added.

The Tax Coalition chairman, meanwhile, urged the Government not to focus solely on meeting VAT’s target implementation date of January 1 to the exclusion of all other issues.

“We shouldn’t have so much tunnel vision,” he told Tribune Business. “We should take all perspectives in the situation into account.

“If you’re trying to get operational by January 1, but are not looking at the dangers on the outside, you could miss an opportunity to make the legislation as strong as it can be.”

Returning to the Coalition, and private sector’s, desire for a list of all outstanding VAT matters to be drawn up, Mr Bowe said such a move was intended to resolve the major issues still causing confusion.

“If you look at it from a holistic perspective, it’s not going to be a perfect environment that will have all the answers addressed,” Mr Bowe told Tribune Business. “What is important is that we don’t have bigger things that tie-up the whole system.”

He added that while the Government was talking to the private sector on VAT implementation and operation issues, questions remained over how effective this would be in achieving practical change.

“What remains to be seen is how that dialogue translates into action,” Mr Bowe said, adding that every change to the law, guidance notes and regulations had to be communicated to the Bahamian business community.