The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent QC is threatening to launch a Judicial Review action against the Grand Bahama Port Authority (GBPA) for linking Value-Added Tax (VAT) registration to licensees being current with their Port licence fees.

Fred Smith, the outspoken Callenders & Co attorney and partner, told Tribune Business that there was nothing in law, or the licence contract with the Port, that required the latter’s 3,500 licensees to be current with their fees in order to obtain their licence registration number - an essential requirement for VAT registration.

He likened the demand to separate cases he had fought against Customs over its requirements that Port licensees provide National Insurance Board (NIB) ‘certificates of good standing’, and a report on the previous year’s ‘bonded good’ purchases, before they could receive their ‘bonded letter’ for the following year, describing the Port’s action as “a different side of the same coin”.

The GBPA, in advertising related to VAT registration, says all its licensees “in good standing” can obtain their licence registration number online.

It defines ‘good standing’ as licensees who are either current, or have a payment plan, with the GBPA.

“Effective immediately, all licensees of the Grand Bahama Port Authority in good standing can now retrieve their licence registration number to register for VAT online,” the GBPA advert said.

“The status of ‘Good Standing’ as defined by the Department of Inland Revenue (Ministry of Finance), defines Business Licences fees as current, or in the case of GBPA licensees, current or in a payment arrangement.”

In effect, the Port Authority is operating the same policy ‘in sync’ with the Government - requiring business licensees to be current with all other taxes before they can complete the VAT registration process and obtain a Taxpayer Identification Number (TIN).

But a vexed Mr Smith, who was once the Port Authority’s external counsel, said there was nothing in the law or licence contract that permitted VAT registration to be used as a means to enforce licence fee payments in Freeport.

“The Port Authority and the VAT Unit are using each other to abuse licensees,” he argued to Tribune Business.

“It is an abuse of the contractual relationship, and an abuse by the Port Authority, as a quasi-governmental authority, making it subject to Judicial Review, to enforce payment of licence fees or other provisions in the licence by insisting on being up-to-date with licence fees before issuing a VAT registration number.”

Mr Smith said that like the Customs cases he had fought in the Supreme Court, the two issues “have nothing to do with each other”.

“It’s the same coin, just a different side,” he told Tribune Business. “There is no provision in law or the licence contract requiring provision of a Certificate of Good Standing.

“In years to come, licensees will not be able to have their Port licence, bond letters or VAT registration done without having complied with various authorities. That is patently illegal and in breach of due process. This is opening the door to abuse.”

The GBPA could not be reached for comment but it, like the Government, will probably argue that it is simply good business sense to create mechanisms enforcing compliance with all taxes.

However, not done yet, Mr Smith told Tribune Business: “I call on the Port Authority and the relevant government agencies to cease and desist in abusing licensee rights, failing which, I will ensure there is a class action lawsuit against the Port.

“I will also urge licensees not to pay their licence fees to the Port, but to pay them into a court escrow account until the matter is resolved.

“Licensees and taxpayers have rights. They are not there to be used and abused by the Port Authority and the Government. The Port Authority seems to have, instead of protecting licensee rights, completely lost the plot over VAT.”