The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Existing casino operators owed the Government nearly $11 million in outstanding taxes at the 2013-2014 fiscal year’s end, while the former Crystal Palace owner’s bill had been under-valued by more than $2 million.

The Auditor General’s report for the year to end-June 2014, tabled in the House of Assembly this week, disclosed that the outstanding tax bill owed by the Bahamas’ four casinos increased by $6.379 million during those 12 months.

Combined with a previous past-due tax bill of $4.463 million, this took the total amount of casino taxes owed by existing operators to $10.843 million.

However, more intriguing is the upward revision in the outstanding casino taxes said to be due from the Crystal Palace’s former owner, billionaire investor Philip Ruffin.

The Auditor General’s report reveals that the true sum owed by Mr Ruffin had increased by $2.147 million, from $5.13 million to $7.277 million, as a result of a “review” by the Government’s own Revenue and Tax Departments.

The increased sum said to be owed by Mr Ruffin is especially interesting given Mr Christie’s assertion in the House of Assembly on October 8, 2014, that the Auditor General’s 2011-2012 fiscal year report was incorrect on the billionaire’s outstanding tax balance.

The Prime Minister suggested then that Mr Ruffin’s outstanding casino tax balance had been settled when he sold the Wyndham and Crystal Palace casino to Sarkis Izmirlian and Baha Mar.

Mr Christie said at the time: “Just let me put on the record that at the time of the purchase of those facilities, all taxes would have been paid. All taxes that were legally due to the government would have been paid.

“That is the assertion I make. I am going to be able to put it on the record. I am going to speak to Ministry of Finance officials just to be able to confirm and verify that point.

“The fact that this is now evidenced in the report is a curious finding to me, because I know that whenever a matter of a sale is completed there is an obligation of the government to collect all of the taxes that are due. Therefore the account is marked sealed and completed.”

The latest Auditor General’s report thus raises questions as to whether Mr Christie was correct in 2014, as it continues to insist that not only are taxes still owing - but the sum has increased.

And the increase was the product of the Government’s own review. “A review of the tax spreadsheets of these casinos was performed by the Revenue and Taxes Department in order to determine the statistical accuracy of the amounts owed to the Gaming Board,” the Auditor General’s report said in relation to closed casinos.

“Upon review by this department, differences were discovered between what was owed per the spreadsheet and what was calculated by the noted department.”

The Auditor General said the review was conducted in 2013-2014 “because of a system failure that occurred in 2011” - an event it was not informed of at the time.

The review, though, has increased the taxes said to be owed by Mr Ruffin by around 40 per cent.

Mr Ruffin is a former client of both Mr Christie and Deputy Prime Minister Philip Davis when they were in private practice.

He has maintained close ties to both men and the Bahamas, frequently visiting this nation even though he no longer has any investments here.

Mr Ruffin’s was the only bill to be increased, as the sums outstanding from the Isle of Capri when it operated the Grand Lucayan casino were cut by $4.796 million to just $124,955. And the former Lucayan Beach’s outstanding taxes were reduced by $2.095 million to $22.131 million.

The Auditor General’s report, though, said a total $51.5 million was still owed by closed Bahamian casinos, and it reiterated previous calls that “urgent steps be taken to collect taxes due to the Government before the opportunity to do so no longer exists”.

Otherwise, it suggested that “a policy decision be made” to write-off the sums owed.

When it came to casino taxes owed by existing operators, the Auditor General’s report said the largest bill was owed by Baha Mar at $5.437 million.

The report said this sum had almost doubled during the 2013-2014 fiscal year, growing by another $2.592 million compared to $2.844 million at the start.

The outstanding taxes owed by the Atlantis casino rose by $2.032 million during the 2013-2014 fiscal year, adding to the prior $1.073 million, and taking the total sum due to $3.105 million.

The Bimini Bay Casino and Treasure Bay casino (Freeport) owed $1.721 million and $579,483 at the 2013-2014 year-end, sums that represented $1.516 million and $238,649 increases over the previous year.

Elsewhere, the Auditor General’s six-month audit of Customs Department entry checking revealed that $703,171 worth of revenue collected was not deposited to the bank.

Customs’ cash book showed $20.537 million being taken in, but just $19.834 was traced as deposits to the bank.

The Auditor General found that four days’ worth of deposits, totalling $512,898, and two further days’ worth, accounting for $190,273, could not be traced. These made up the $703,171 in revenue due, but missing, to the Government.

“Our examination has revealed that officers did not exercise the required internal controls over the daily revenue depositing function, which in this case has resulted in revenue of $703,171 not being deposited to the bank,” the report said.

Some $653,093 of the missing monies related to cheques, and the Auditor General said: “Every effort must be made to ensure that this amount is collected immediately.

“It is evident that businesses which are privileged to use cheques would have realised that the payments were not executed after a reasonable time. Therefore, these payments must be made immediately, and in full.”

The Auditor General said most of the funds due from the cheques had been collected, while the Customs comptroller had confirmed “stronger controls have already been implemented”.