The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Inland Revenue offer to simplify the Tax Compliance Certificate (TCC) process by issuing ‘three at once’ would be “much easier” if just one was made valid for a 90-day period, the Chamber of Commerce’s chief executive said yesterday.

Edison Sumner told Tribune Business that despite several meetings between the Chamber and Ministry of Finance officials, the latter had yet to act on its recommendation that TCCs last for a duration of “at least 90 days”.

However, he recalled that Roger Forbes, head of the Inland Revenue Department, had proposed at last week’s Chamber breakfast meeting issuing “three TCCs at the same time” to businesses current with all tax payments.

The thinking here was that when one TCC expires, another kicks-in, with the three collectively enabling a business to go for 90 days/three months without needing to apply for another.

But Mr Sumner, while welcoming the offer, told Tribune Business it would be far simpler, and more efficient and less costly for all, if the Government could issue companies with just one TCC covering a 90-day period.

“Our suggestion to the Government is that the Tax Compliance Certificate last for a period of not less than 90 days,” Mr Sumner told Tribune Business. “Thirty days is too short for people to make sense of them and use them properly.

“One suggestion by the Comptroller of Inland Revenue was that if a company has a need for a TCC beyond 90 days, the Department would process three separate applications at the same time and approve them. So that when one expires, another sets in.”

While welcoming this proposal as a sign that the Government and its tax agencies are prepared to be flexible, Mr Sumner said: “Why not issue one certificate for three months at a time, rather than three for three months?

“It serves the same purpose, and cuts down the paperwork for businesses and vendors. That is our general recommendation to the Government; to expand and extend the terms of the TCC from 30 days to 90 days.”

The Government and its agencies now require companies to provide them with TCCs, showing they are up-to-date with all tax payments, before the latter receives due compensation for any goods and services supplied.

The move has added to the bureaucratic burden Bahamian businesses have to deal with, with many companies experiencing difficulty in obtaining TCCs in a timely manner.

Besides adding to general private sector frustration, the situation has impeded business cash flows, and profitability, as they are unable to collect government payments without a TCC.

Mr Sumner told Tribune Business that some prior delays had been caused by “technical challenges with the [Government’s] system, which have since been addressed and corrected”.

He added that the Chamber had received no new TCC-related complaints for several weeks, which it was cautiously interpreting as a sign that the situation was improving.

Mr Sumner pointed out that the private sector body was also focusing most of its attention on companies who held government contracts worth $10,000 or more, since they were the ones requiring TCCs on a monthly basis. Businesses with contracts valued below this threshold are only required to produce their’s every six months.

Of the Chamber’s 90-day recommendation, Mr Sumner added: “If that were to happen, we would have a lot more businesses operating more efficiently without having to apply for these TCCs on a monthly basis.

“If we do them for three months at a time, we will make life more convenient and efficient. It’s [the TCC] become too much of an administrative and operational challenge.

“Many businesses are unable to access the funds owed to them by the Government if they do not provide a TCC, and by the time they get around to accessing their money, the TCC has expired,” he added.

“The idea of applying for three at one time is a good offer, but why not apply for a certificate for three months? It makes life so much easier.”

Mr Sumner, though, praised the willingness of the Government and its agencies to engage “in full and frank discussions with the private sector” on issues that impacted both sides, and for showing flexibility where it could.

He added that the ultimate goal was to make “the ease of doing business become easier”.

The TCC’s legal basis is in changes made to Part IIB, Section 19I of the Financial Administration and Audit Act in July 2015.

These mandate that a business/entrepreneur must provide a TCC both to win an initial government tender and obtain payment on that contract, provided the value is greater than $10,000.

The taxes they must be in full compliance with are Business Licences and real property taxes, Immigration (work permit) fees, all Customs-related taxes, Value-Added Tax (VAT), NIB contributions and motor vehicle licensing fees.

With the Public Treasury desperate for every cent of revenue it can earn, given the Bahamas’ strained fiscal position, the TCC-related changes are designed to further tightening the enforcement circle and eliminating tax compliance gaps and loopholes.