The Tribune

The government yesterday said it had managed to preserve more than 7,000 Bahamian jobs by providing businesses with $18m worth of COVID-19 relief via tax credits and deferrals.

The details were revealed as the Department of Inland Revenue announced that the second phase of its Tax deferral and exemption initiative will be expanded to include all qualifying VAT registrants with a turnover of $100,000 or greater.

The first phase, which ended on June 30 to coincide with the 2019-2020 fiscal year close, was targeted only at firms with annual turnovers exceeding $3m and a minimum of 25 employees. Qualifying businesses were able to withhold due VAT or outstanding business licence fees between April and June to enable them to meet payroll expenses.

The Department of Inland Revenue said the first phase saw the granting of $18m in total non-reimbursable tax credits and deferred taxes, which enabled companies to keep more than 7,000 Bahamian employees on their payroll rather than sending them to the National Insurance Board (NIB) for benefits.

The tax deferrals and credits were split 50/50, meaning that the $9m worth of deferred tax payments will have to be paid back by those companies in 2021 via a 12-month payment plan to be agreed with the government.

The Department of Inland Revenue added that the ongoing COVID-19 crisis had sparked the continuation, and expansion, of the initiative. Besides significantly lowering the qualifying turnover threshold, the initiative will also include hotels in an effort to provide payroll support, encourage employee retention and thus eliminate the need for further lay-offs.

And companies that may have received assistance under phase one can also apply for further assistance in phase two.

"It is important to note that tax relief approvals will be based on staff complement rather than the turnover of businesses as previously granted under phase one," the Department of Inland Revenue said.

"Additionally, there are certain categories of businesses that will not be eligible to receive assistance under this programme, including: food stores and food wholesalers; pharmacies and related wholesalers; gaming houses; banks and financial entities; insurance companies and the regulated telecommunications sector.

"We want to assist as many businesses as we possibly can to retain as many of their employees that they are able to and encourage them to apply online at (http://atlas.revenue.gov.bs)," said Gaynell Rolle, Inland Revenue's acting controller.