The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

An FNM candidate yesterday pledged he would make it his “life’s job” to slash the bureaucracy facing the private sector if elected, as he slammed the Government’s “unforgiving” approach to even minor VAT errors.

Dionisio D’Aguilar told Tribune Business that Inland Revenue Department officials seemed to automatically consider businesses who make simple VAT return mistakes as “crooks and gangsters trying to cheat the Government” out of its due revenue.

The Superwash president, confirming that he had received notice of the seven-day ‘cut’ to the VAT payment window, said it was “mind-boggling that the Government is living hand-to-mouth” when it had collected $852 million in new revenue during the tax’s first 18 months.

Mr D’Aguilar suggested that the 21-day payment/filing window, which will take effect from January 1, 2017, was another sign of the Government’s “anti-business” approach.

He added that it would be easier for the 6,000-plus VAT registrants to swallow if the Inland Revenue’s “unrelenting” approach to imposing fines eased.

And, pointing out that ever-growing bureaucracy was “turning people off from going into business”, the Superwash chief said it seemed as if the civil service had “hijacked” the Government with onerous compliance processes.

“I don’t see why the Government is making this big ‘hoo ha’ about seven days,” Mr D’Aguilar, the FNM candidate for Montagu, said of the reduced VAT filing/payment time.

“They should give people enough time to prepare the returns and make sure everything is correct, because the VAT Department [Inland Revenue] is very unforgiving and unrelenting if you get it wrong.

“There’s a tendency by government servants to think that if you make a mistake, you’re trying to cheat the Government out of its money, and they’re unforgiving in terms of putting in penalties.”

Mr D’Aguilar said Superwash had “run afoul” of the Inland Revenue Department once, when it missed a payment deadline by five minutes.

“The penalties are huge, extraordinary ones,” he added. “It’s 10 per cent of the tax due, and 18 per cent interest accrued.

“One can understand the size of the penalties and interest if there is sufficient time provided to VAT registrants to pay.

“It’s another demonstration of the anti-business sentiments of the Government. This government is unrelenting on business, believing we’re all a bunch of crooks and gangsters, and the level of regulation and reporting is growing by leaps and bounds every day,” Mr D’Aguilar continued.

“One of the biggest complaints of people in business today is the level of reporting, the level of paperwork, just the bureaucratic nature that business in the Bahamas has become. It’s become overwhelming. The Tax Compliance Certificate is the most hated document.

“I can tell you one thing: If God blesses me to win a seat, and the FNM wins the Government, I will make it my life’s job to cut this bureaucracy.”

Mr D’Aguilar revealed that he and Superwash ran into further difficulties with the VAT Department over a “large credit” that was owed to the laundromat chain.

Rather than wait for the Government to process the refund, Mr D’Aguilar said Superwash instead netted off the amount due against its VAT bill over the course of several months.

“They [Inland Revenue] tell you point blank: You want your money back, you’ll be waiting a very long time, and will have to prove you don’t owe the Government a dollar,” he told Tribune Business.

“The mid-level bureaucrats tell you that. If you want your money back, they don’t make it easy for you. “

Mr D’Aguilar said Superwash had effectively “pre-paid” its VAT for several months as a result of the credit, but ran into trouble when it “made an error in how we applied it and accounted for it.

“They said: You made a mistake. You owe us this amount of interest and penalties,” the FNM election candidate said of the Inland Revenue’s stance.

“I said: How can I owe you if we pre-paid you? I had to make an appointment, go down there, put myself in front of the VAT Comptroller. He said: ‘Oh no, we’ve made a mistake’.

“That took time and energy. Our ease of business is getting worse, and everyone knows it. It’s as if the civil service has hijacked the Government, and doing business in this country is almost impossible.”

Mr D’Aguilar said he had been informed that Michael Halkitis, minister of state for finance, told the recent Bahamas Institute of Chartered Accountants (BICA) conference that the Government needed to cut the VAT filing/payment window to boost cash flow and enable it to meet the monthly $50 million civil service payroll.

“It’s mind-boggling that the Government is living hand-to-mouth in such a way, having collected $852 million in VAT revenues in the last 18 months,” he told Tribune Business, “or $600 million plus a year.

“This new tax is a vast, enormous increase in revenue, and they’re still challenged to meet the monthly payroll, once again giving credence to the fact they’re not managing the people’s money properly.

“We were certainly meeting Government payroll before this tax came in, and the fact they’re still facing a cash crunch demonstrates their failure to manage the people’s money properly.”

Mr D’Aguilar said there was little point in reducing the VAT filing/payment deadline from 28 days to 21 if it increased the private sector’s struggles to comply, and obtain other necessary permits and approvals, especially TCCs.