The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has been urged to waive the $100 fine imposed on companies who missed the initial end-January 2016 Business Licence filing deadline as “a goodwill gesture”, as queries and “confusion” persisted up till last week’s payment cut-off.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chairman, told Tribune Business that the Christie administration should give “serious consideration” to foregoing that penalty.

Emphasising that it was hardly likely to cause a material impact to the Government’s revenues, Mr Bowe said the private sector would likely respond favourably to such a concession by the Government.

He explained that while the Government accepted private sector and accounting industry suggestions that the Business Licence filing deadline be moved back two months to end-March 2016,it did not eliminate the fines levied on companies who missed the original January 31 target.

“From the Chamber’s perspective, we’re arguing that consideration be given to waive the $100 penalty, as this is a transition year,” Mr Bowe said.

“What they didn’t do is waive the $100 penalty. Serious consideration should be given to waiving that. I can’t imagine that $100 represents a substantial amount of revenue.

“That would be a minimum token of goodwill, and I strongly urge them to give consideration to it.”

Mr Bowe suggested that the Government’s approach to Business Licence filing penalties should be similar to the one adopted during Value-Added Tax’s (VAST) first six months, when sanctions for late filings were not imposed provided businesses could demonstrate they were making a genuine effort to comply.

This is not the first time the $100 fine for missing the end-January 2016 deadline has come up as a controversial issue among the private sector.

One businessman, speaking on condition of anonymity, said: “There was a fine from Business License of $100 for late filing. We filed our Business License on January 20 and have the confirmation.

“When we called, they [Department of Inland Revenue] explained they had a ‘computer issue’.”

And, for companies with annual turnovers around the $500,000 ‘certification’ threshold, the $100 penalty is equivalent to roughly 20 per cent of the $500 fee they will pay.

Mr Bowe, meanwhile, said that while there had been “no systemic complaints” made by companies to the Chamber over the Business Licence submission processing, questions on specific issues kept occurring up until last Thursday’s filing/payment deadline.

“I know there was some confusion over the private offshore banks, as to whether their Business Licence was based on turnover and required certification by accountants,” the Chamber chief told Tribune Business.

Mr Bowe said this was not a requirement for the private banks who, unlike their commercial counterparts, do not pay turnover-based Business Licence fees.

This, in turn, means no accounting certification of their turnover is required, but Mr Bowe said some persons at the Department of Inland Revenue thought differently.

He added that the issue was “sorted out last week” following communications between himself and acting financial secretary, Simon Wilson.

“What I said to the financial secretary was when they have these types of uncertainties, public notices are best,” Mr Bowe said.”To avoid uncertainty and disputes, there needs to be consideration of an FAQs websites and media circulars to clear up questions out there.”

Mr Bowe said another issue related to taxies and taxi plates - whether the Business Licence was to be calculated on the plate rental fee, or the cab driver’s earnings.

The Chamber chairman, who is also a PricewaterhouseCoopers (PwC) partner, and other accountants, said “a danger” had been created when clients filing last week were told by the Inland Revenue Department not to pay their fees until their filing calculations had been reviewed and approved.

This ‘advice’ threatened to cause some companies to miss the March 31 payment deadline, and Mr Bowe said: “We were advising our clients to make payment as they filed.

“All of our clients were advised to go ahead and make payments based on the calculated returns, and get a receipt.”

He explained that any adjustment to the Business Licence fees due could be made at a later date, once the filings were approved and submitted.

Another accountant, speaking on condition of anonymity, said filers paying by cash or cheque deposit to the Government’s Royal Bank of Canada (RBC) accounts faced incurring a penalty for late payment if they submitted funds within 48 hours of March 31.

“RBC processes it a day or two later,” the accountant said. “A client of mine waited until the last day to pay. They got an e-mail saying they had not paid, and they were going to incur a penalty. Now it becomes my client’s headache, and my headache, to get it reversed.”

The accountant also recalled how one client entered an incorrect, higher turnover figure in their Business Licence filing that did not correspond with their certification letter.

“They [Inland Revenue] chose to bill them at the higher, incorrect amount,” the source said, adding that he was eventually able to resolve the issue.

Mr Bowe, meanwhile, said there was pressure for the Ministry of Finance and the Bahamas Institute of Chartered Accountants (BICA) to create a working committees to resolve “issues of interpretation” with the Business Licence Act.

“I think there’s still significant concerns over the timing, interpretation of accounting standards and what should the Government recognise as revenue, but by and large the parties made a valiant effort to get it done,” he added of Business Licence compliance.