The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has promised to address the Business Licence double taxation “anomaly” identified by the construction industry, the Chamber of Commerce’s chief executive said yesterday.

Edison Sumner told Tribune Business that the Chamber had raised the issue in a meeting with Ministry of Finance officials this week,and received assurances that it would be remedied if necessary.

“We did have an opportunity to meet with some executives at the Ministry of Finance to talk about these things, where we realised some concerns were raised over the Business Licence, particularly from the construction industry who felt they were being double taxed,” he told this newspaper.

“That was one of the pressing issues we had a chance to address this week, and are satisfied that the Financial Secretary’s office is paying close attention to it and will make the necessary adjustments once they’ve done their own internal review of the system.

“Where it’s found to have anomalies, they will address it appropriately.”

Tribune Business revealed the construction industry’s ‘double taxation’ concerns last week in an interview with former Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chairman, Robert Myers.

He warned that the resulting increased construction costs for consumers threatened to further depress activity in a still-struggling industry that plays a key role in the fight to increase employment.

Mr Myers explained that the main project contractor was being required to pay Business Licence fees based on the “aggregate”, or total value, of the development rather than just its portion of the work.

With sub-contractors also paying Business Licence fees on their respective portions of the project work, he said the end result was that consumers (developers, businesses and homeowners) were effectively being taxed twice on the same work.

“From the construction standpoint, we’re wildly concerned that with this new Business Licence fee policy consumers are being double taxed,” Mr Myers told Tribune Business.

“I don’t think it’s truly understood yet. People are going back and forth on it. We’ve asked the Bahamas Institute of Chartered Accountants (BICA), the Bahamian Contractors Association (BCA) and the Chamber to weigh in on it. It’s an ongoing discussion that we need to get to the bottom of.

“My concern is that every time you increase the cost of construction, you deter people from building in the Bahamas. They’ll have a tendency to look elsewhere, the construction cost is already high, and we’ll become less competitive as a nation.

“I think it’s wrong. It cannot be the intent of the Government to ‘double tax’ the industry on both project contractors and sub-contractors. Construction costs are already high, and construction starts are at an all-time low. For God’s sake, why try and do that?”

Mr Sumner yesterday told Tribune Business that the construction industry’s Business Licence ‘double taxation’ was “one of those situations that has slipped through” and been allowed to continue.

“We got assurances from the authorities that they will be looking at that more closely now, and where anomalies like sub-contractors paying Business Licence fees on monies the general contractor is paying on exist, and serve as double taxation, we believe our discussions with the Ministry of Finance have highlighted some concerns with the system,” the Chamber chief said.

“We believe that’s being addressed, and before [Business Licence] filings are done by the end of the month, there will be some statement coming out to address that issue.”

Mr Sumner also revealed to Tribune Business private sector concerns that the Value-Added Tax (VAT) online filing and payment process was “more efficient” than the Business Licence fee counterpart.

“We’ve raised it with the Ministry of Finance to ensure there remains a level of consistency with what’s required on the Business Licence side and the VAT side,” he added.