The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The private sector was yesterday warned to be on its guard as April’s Value-Added Tax (VAT) payment deadline looms, after bank-related delays resulted in numerous businesses incurring financial sanctions last month.

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation’s (BCCEC) chief executive, told Tribune Business that the organisation had received “numerous complaints” from the “very largest businesses to the smallest” over the ‘late payment’ fines they incurred in March.

“There were a number of businesses that came to my attention just recently who suffered late fees and penalties for VAT,” he explained.

“The challenge we had with that was those businesses advised us they made payment on time with their banks, but the process of having those funds transferred [to the Treasury] took two to three days to clear.

“The funds were deemed to have been received late, after the period expired, and fines were levied on those businesses.”

Mr Sumner said the Chamber subsequently held talks with the Inland Revenue Department and Simon Wilson, acting financial secretary in the Ministry of Finance, who said the March ‘late payment’ fines had been “reversed” where companies could show the bank payment was made on time.

“This is the first time this has come up, where companies were fined for late payments for March,” the Chamber chief said.

“We would have gotten numerous calls from businesses, large and small, who were facing the same challenge of being fined and penalised for late payments.

“Those who called range from the very biggest businesses in the country to small and medium-sized enterprises (SMEs). It’s impacted every sector of the business community.’

Mr Sumner told Tribune Business that the Chamber was working on “a two-street solution”, where VAT registrants continued to meet the return and payment deadline of the 28th of each month.

And, if registrants could demonstrate that they made the due tax payment to the bank on or before the 28th, the Government would “exercise leniency and not penalise businesses when payment is made on time”.

Mr Sumner reminded the private sector that, when the VAT Guidance Notes were developed pre-implementation, they were warned to allow two to three days for tax payments to clear at the bank “precisely to avoid this kind of situation”.

Yet the Chamber was also asking the Government to take the bank payment date as the one when taxes were paid, not the date when the funds arrived in the Treasury’s accounts.’

“Once they’ve made payment to the bank prior to the date, that should be the date that is time stamped by the Government,” Mr Sumner told Tribune Business, “and there should be no penalties imposed on businesses. It’s a two-way street for us.”

He urged businesses who had been fined in such circumstances in March to report their situation to the VAT Office and the Chamber, so that the latter was aware of it and could ensure there was a just resolution.

“We are satisfied we are working well with the Ministry of Finance and Inland Revenue Department to make sure these matters are addressed in the shortest possible time,” said Mr Sumner.