The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport businesses yesterday confirmed that government agencies had favourably resolved their differences over whether Value-Added Tax (VAT) should be levied on duty-paid entries for December that were submitted after the New Year.

Larry Albury, Freeport Jetwash & Auto Mart’s general manager, told Tribune Business that he and other impacted Grand Bahama Port Authority (GBPA) licensees were “glad” the issue had been resolved in their favour.

Confirming that the 7.5 per cent VAT would not have to be applied to December’s duty-paid entries, Mr Albury said the matter was resolved the day after this newspaper exclusively revealed the problem.

“Everything got sorted out the Friday before last. By noon, it was all straight,” he told Tribune Business. “It’s all been put behind us, and everyone appreciates the Government officials working together to sort out something straightforward.

“We’re glad it got sorted out and can move on to the future, whatever that may bring.”

Tribune Business revealed how the Government’s VAT Unit and Customs Department were previously at odds over the latter’s demand that Freeport businesses, who submitted December’s duty-paid entries after the New Year, charge the new 7.5 per cent levy on these sales.

Impacted GBPA licensees were ‘caught in the middle’ of different interpretations by two different government agencies over how VAT should work.

And, with the January 15 deadline for licensees to pay due import tariffs, and have their reports accepted, looming, those caught in the situation feared Customs may block future import shipments - further interrupting their business at a time when they can least afford it.

Mr Albury said at the time: “We put in our entries for duty-paid sales for the month of December, and they [Customs] came back and told us we had to pay 7.5 per cent VAT on our December sales.

“We told them those are 2014 sales, not 2015 sales. I have spoken to the VAT Unit quite a few times, and they said: ‘Don’t pay it’, but Customs is insisting we pay it.”

By demanding that VAT be paid on GBPA licensees’ December sales, Customs was effectively making the new tax retroactive to 2014 - despite it not being created in statute law until January 1, 2015.

Under Freeport’s ‘bonded goods’ regime, Port licensees have until the 15th of the following month to submit - and have accepted by Customs - a report on the previous period’s duty-paid sales.

These sales involve products acquired by non-GBPA licensees, with the vendor business applying the relevant duty and submitting this sum to Customs by the same deadline.

Customs appeared to adopt its position that because the reports - and collected duties - were submitted after January 1. Yet the VAT Unit said ‘no’ - a stance that the impacted businesses backed - and which, thankfully, appears to have prevailed.