The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas Chamber of Commerce and Employers Confederation - the chief private sector representative - has urged the Government to ‘expedite’ the establishment of a Central Revenue Agency (CRA) amid growing backlash from businesses over the mandatory Tax Compliance Certificate (TCC).

The BCCEC has also recommended that the Government make TCCs valid for a period of six months as opposed to the 30-day period which currently stands, given the amount of time it takes to obtain the document. A TCC is necessary when doing business with the government and is issued to businesses and persons who are compliant with their tax obligations to the government. The certificate is required for individuals who; wish to do business with the government or a public body, seek to collect monies for services rendered to the government or a public body; seek to register ownership or change ownership of a taxable good.

The BCCEC noted that a significant number of businesses have been expressed over the TCC. Several Bahamian businesses speaking with Tribune Business have argued that it is “unconscionable” for NIB and other government agencies to demand a TCC be produced before paying for goods and services already received. They also expressed concern that it will exacerbate the stranglehold bureaucracy and red tape are imposing on Bahamian businesses, and fear an ever-increasing compliance burden that will “cripple” cash flow.

The BCCE noted that businesses have expressed concerns over the length of time it takes to obtain a TCC, stating that based on feedback from businesses, the average time to obtain a TCC is in excess of four business days. “This represents a significant period of time, particularly when it impacts cash flows through delays in settlement of transactions with The Bahamas Government. The fact that specific checks are required to be carried out by various entities and departments, including but not limited to the National Insurance Board and the Department of Customs, which are not interfaced currently, is a large contributor to length of time to obtain a TCC,” said the BCCEC.

It added: “We recommend that the establishment of the Central Revenue Agency be expedited, and trust that its systems and processes would enable a “single window” facility enabling all necessary checks to be performed by one department, which can make the process for obtaining a TCC far more efficient.”

The BCCEC also noted that concerns have been expressed over the period of time for which TCCs are valid. “Currently, TCCs are only valid for a period of thirty days, which results in businesses conducting significant transactions with The Bahamas throughout any given year being required to obtain TCCs on a monthly basis,” said the BCCEC.

“Given the time required to obtain a TCC noted above, this could result in a significant loss of manpower hours and productivity. We recommend consideration be given to making TCCs valid for six months, which would result in semi-annual formal validation exercises. However, such TCCs can be revoked at any time if businesses become significantly delinquent in the intervening period. Given the efforts to automate the procurement process, the management of the vendor registry should enable this revocation to be done electronically.”

The Chamber also noted, that further consideration can be given to implementing a standard letter/contract for significant vendors where such vendors agree that any sums owed by The Bahamas Government for goods and services acquired can be applied to overdue tax balances prior to any settlement.

According to the Chamber, businesses have also expressed concern over past amounts owing for transactions that occurred prior to the new requirement for TCCs.

“Several businesses with legitimate receivables from The Bahamas Government have been experiencing a refusal to settle such obligations prior to the presentation of a valid TCC. We recommend that the policy of TCCs be applied prospectively, to avoid unnecessary threats of legal action and negative goodwill between The Bahamas Government and such businesses. Naturally, any significant vendor will be seeking to continue to conduct business with The Bahamas Government going forward and would have to comply with the new requirement.”

“Several businesses have indicated that an impractical TCC requirement could result in changes to how they transact with The Bahamas Government, such as doing business on a cash on delivery basis. This would not serve the private sector, The Bahamas Government or expansion of the domestic economy, and accordingly, we hope to have further deliberations with the Government achieve resolutions that benefit both the private sector and The Bahamas,” said the BCCEC.