The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday urged to ease private sector anxieties by removing long-standing "red herrings and misnomers" associated with the Business Licence renewal process.

Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business that the Ministry of Finance needed "to settle once and for all" three issues that frequently caused consternation on an annual basis.

He said clarification was required on when Business Licences expired; the importance of tomorrow's January 31 'filing' deadline; and the need for a more risk-based approach to certifying private sector compliance.

Mr Bowe added that he and BICA supported the Chamber of Commerce's call for the Government to introduce a "staggered" approach to Business Licence filings and payment, moving away from the set end-January and end-March dates for all.

He revealed that the former Christie administration had mulled switching Business Licence filings and associated fee payments to a quarterly (every three months) basis, but had never moved to implement such an approach.

Besides better aligning with Value-Added Tax (VAT) payments, Mr Bowe said such a schedule would also tie Business Licence fee payments to a company's performance during its current financial year.

"There are three elements that always get people riled up, and which have not necessarily been settled once and for all," the BICA president said. "The Ministry of Finance needs to do that.

"One is when Business Licences expire. That causes consternation for people importing who need Customs bonds, and require auxiliary elements to get one, including their Business Licence assessment."

Business Licences currently carry a year-end expiration date, yet are only renewed and certified by the end of March the following year. "What needs to be clarified is once Business Licences are valid until the end of December, it is valid until the renewal deadline has expired," Mr Bowe said. "That would ease a lot of the stress that comes about."

He then questioned whether the January 31 'filing' deadline was "a red herring", and if it is "of any use", given that the penalty for missing it was a mere $100. This, together with the fact that Business Licence fee payments are not required until end-March, suggested Wednesday may not be important as it seems.

Mr Bowe said the "appropriate threshold" for certifying Business Licence fees also needed to be revisited, given that it had jumped from a $500,000 turnover to $1 million before being reduced to $100,000 to bring it into line with VAT.

He added that Business Licence certification should be risk-based, focused on companies "with a risk of valuation errors", and cross-checked with a company's VAT filings to make sure the two are aligned.

"Certification should be done on businesses considered by the Business Licence Valuation Unit as 'high risk," Mr Bowe argued. "Those with high turnovers, and those with more complex turnovers, meaning you have different sources of revenue. Some may be subject to VAT, some may not, and some may be subject to Business Licence fees and some may not.

"We want to have certification that persons are compliant with the law. If we remove some of the red herrings and misnomers in some of these deadlines, that will ease a lot of the consternation that takes place. "People get frustrated and concerned by January 31, people get concerned by not having a Business Licence to carry down to Customs. If there is a 90-day window, we should say the Business Licence is valid until that process is completed. That process is something we had in the past, and it should be returned to," the BICA president continued.

"These are issues that come up before us every year. It will no longer be news if all these things are put to bed. It's more about simplifying the certification process, removing the bureaucracy and additional costs relating to Business Licences, and using the system the Government has got with VAT without adding a layer of burden on to small businesses to certify."

One BICA member, speaking on condition of anonymity, yesterday told Tribune Business that the January 31 deadline frequently placed "undue stress" on Bahamian accountants to certify turnover figure accuracy for multiple corporate clients within a matter of weeks.

Delays in obtaining supporting documents such as National Insurance Board (NIB) 'letters of good standing', they added, only exacerbated the difficulties facing the private sector and accounting community.

The accountant called on the Government to accept turnover "estimates", rather than certified figures, on January 31 and give the private sector until end-March to provide final numbers.

"I would like to challenge any government department/official to supply one logical reason for the Business Licence certification process to be completed by January 31, 2018," the source said.

"If it is for the Government to have an indication of what they will collect by the end of March (when fees are due), this can be accomplished by having businesses indicate there estimated turnover for the previous year.

"There is not enough time for the number of accountants preparing reports to complete the Certifications. What the Government has done has caused undue stress on accountants and businesses, and placed accountants in position where they are more likely to make mistakes/errors."

The Chamber of Commerce, too, told Tribune Business on Monday that it will propose to the Government that the Business Licence renewal process be "staggered" and moved away from 'set in stone' deadlines.

Edison Sumner, the Chamber's chief executive, said it also desired to "streamline" the need for companies to file multiple financial statements with the Government - one set for VAT, and another for Business Licence purposes. He added that the private sector wanted to reach a position where just one set of figures was required.

Mr Bowe, meanwhile, disclosed that the Ministry of Finance under the former Christie administration had examined the feasibility of moving Business Licence filings/payments to a quarterly basis.

This, the BICA president said, would have aligned fees with a company's current financial performance while boosting cash flow through permitting four annual payments as opposed to one large one.

Pointing out that Business Licence fees are based on prior year performance, exposing companies to the risk of high payments in a subsequent year when they are doing less well, Mr Bowe said BICA backed the Chamber's call to change the existing deadlines.

"Aligning revenue with the actual licence year was what they were attempting to do by moving to a quarterly basis," he explained. "You can then decide whether or not you're going to have regular audits of quarterly information, and select on a risk basis those businesses who will undergo attestation, although that will require more discipline.

"BICA supports doing it on a more frequent basis, so the agencies will have more information with which to work."