The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Senior business executives yesterday called for all public office holders to settle outstanding bills and taxes before accepting their positions, with the Chamber’s chairman urging that chronic defaulters be prosecuted.

Speaking to Tribune Business in the wake of allegations that Dame Marguerite Pindling has amassed an outstanding $306,000 real property tax bill over a 14-year period, Robert Myers said enforcing the ‘rule of law’ was critical to the Government’s fiscal reform efforts.

He warned that the failure to enforce compliance with the existing tax system threatened to put the formal Bahamian economy “out of business” even before Value-Added Tax arrived on the scene.

Both he and one of his Chamber predecessors, Dionisio D’Aguilar, agreed that the failure to pursue delinquent taxpayers - high profile or not - simply increased the tax burden on law abiding businesses and citizens, encouraging them, too, to disappear into the ‘informal economy’.

Mr D’Aguilar, Superwash’s president, told Tribune Business that non-compliance by well-known Bahamians and businesses had a “snowball effect”, as it encouraged others to avoid paying due taxes if they were seen to escape any sanctions.

Reiterating that the “no consequences” belief was encouraging much Bahamian tax evasion, Mr D’Aguilar called on the Government to deduct taxes and other monies owed to it by civil servants, and others on its payroll, from their monthly salaries.

Backing the media for effectively ‘shaming’ public figures into settling their debts, as appeared to have happened with BEC chairman Leslie Miller and his family, Mr D’Aguilar told Tribune Business: “These high profile people that hold these high profile positions should decline from holding them until they comply with the tax authorities.

“The only reason this happens is because they’re in a position of power, and we think it’s not proper to collect from them, even though they owe money to us.

“The Government is broke, screaming for more money, and if people don’t pay their taxes, the honest people will pay more.”

He argued that developed nations were more successful in collecting taxes because they had created a culture where they had to be paid, otherwise a defaulter’s home or other assets might be seized and sold to settle the bill.

“Unless we adopt that strategy, people will always have a reason why they cannot pay their taxes,” Mr D’Aguilar said. “People will say ‘You’re rich, D’Aguilar, you don’t have to worry’, but we have to teach people there are consequences for non-compliance.

“Right now, there are no consequences. You see these people in power or perceived authority getting away with not paying taxes, and nothing happens to them. Other people then feel that if they don’t pay, then why should they. You have a snowball effect.”

The Superwash president also called on the Government to ensure persons on its payroll settled outstanding taxes, National Insurance Board (NIB) contributions and other bills owed to it and state-owned entities.

“There are all these people receiving compensation from the state on a monthly basis, and yet the state can’t collect the money they owe,” he added.

“If there are no consequences for those people who owe the state, and receive compensation from the state, then you can see why there’s a problem. There’s no reason for the Government to say they can’t collect from people they pay money to.

“In the private sector, that would never happen. If you owe my company, Superwash, there is no way on Christ’s Green Earth I would do business with you until you pay me.”

Mr D’Aguilar called on the Government to develop “the will” to go after delinquent taxpayers, adding that it needed to target “the low-hanging fruit” first.

Mr Myers, meanwhile, said the “critical” need to reinforce the rule of law, as it relates to taxpayer compliance, had repeatedly been discussed by the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) and its Coalition for Responsible Taxation over the past 10 months.

Noting that the topic resurfaced as recently as Wednesday night’s BCCEC Board meeting, its chairman told Tribune Business: “If the law is broken by people in positions of real authority, it’s a real problem.

“Every time somebody does not pay, the law abiding pay more. The Government will come to them, and the law abiding, tax paying people will have to pay up. It comes back to us.

“These people need to be brought to book. They have to prosecute these people if they don’t pay. If you want to give them an amnesty, that’s great, but you have to tell them that if they don’t pay by a certain time, we will prosecute. Make sure you have teeth, and that it’s not another aimless threat.”

Mr Myers said improved tax compliance was vital if the Bahamas was “to shoot down the informal economy” prior to Value-Added Tax’s (VAT) introduction.

Otherwise, “increasing pressure” will be imposed on the formal economy, and more Bahamians and businesses will be encouraged to join the informal variety due to the higher tax burden.

“The lawlessness perpetuates,” Mr Myers told Tribune Business. “Enforcement of the rule of law is a critical issue.

“If you do not enforce the rule of law, you are going to put the formal economy out of business. It’s absolutely imperative. We need to see that happen before VAT.”