The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Deputy Prime Minister yesterday promised the Government is "looking at all options" to improve the Tax Compliance Certificate (TCC) process given continuing private sector concerns.

K P Turnquest confirmed to Tribune Business that the Minnis administration had received submissions from the business community on the TCCs, which many companies view as a costly and time-consuming obstacle to consuming business.

While a reduced TCC-production frequency is among the options being considered, Mr Turnquest said any changes needed to be balanced with the Government's need to ensure tax compliance.

"We have had representations in that regard from the business community," the Minister of Finance told Tribune Business, with TCCs described as "a disincentive in terms of the ease of doing business".

Mr Turnquest added: "We are committed to looking at that process to see if we can make any adjustments, and make it more convenient for businesses to do business. I would say that we are looking at all options."

TCCs became particularly hated and despised under the former Christie administration, due to the bureaucracy and 'red tape' encountered in trying to obtain them.

The reasoning behind their creation appeared sound from a fiscal perspective, with the Government and its agencies requiring their production by companies to prove they are up-to-date with all tax payments before receiving due compensation for goods and services supplied.

But the difficulties in obtaining TCCs in a timely manner frustrated numerous Bahamian businesses, with the certificates often valid for just a few days once received. The delays also impeded business cash flows, and profitability, with firms unable to collect government payments without a TCC.

Numerous private sector executives have argued that the need to produce TCCs on a monthly basis is 'overkill', and that this should be required on a quarterly basis at most - even biannually or annually.

"Certainly that is not off the table," Mr Turnquest told Tribune Business of a reduced TCC frequency, "but it's a little early for us to commit one way or the other.

"We are committed to improving the 'ease of doing business', and we recognise this is one of the issues that the business community has raised or complained about, and we want to address it to make it fairer, but at the same time improve tax compliance levels."

Edison Sumner, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chief executive, said the TCC process had become less onerous after the former Christie administration enabled companies to obtain TCCs that were valid for three months instead of one.

"It's been met with open arms by the business community," he told Tribune Business, "although there's still a sentiment that the process of acquiring TCCs is a bit much.

"This is a matter that continues to be on the Chamber's agenda, and it will be taken up. It's part of the Chamber's agenda when we look at the ease of doing business and elements in that process."

Mr Sumner said improved communication between the Department of Inland Revenue (DIR) and other government agencies, such as the National Insurance Board (NIB), was key to further "streamlining" of the TCC process.

He acknowledged that the Government would want to retain the effectiveness of TCCs as a tax compliance tool, and emphasised that the private sector's main interest was to eliminate the delays in obtaining them.

"If it takes one or two days to get a TCC, and they're issued in a more timely fashion, the business community will not be as concerned," Mr Sumner told Tribune Business. "We've seen some improvements in that area."

He added that concerns arose when delays occurred, and a TCC was set "to expire almost immediately" upon receipt rather than be valid for one or three months.

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.