The Tribune

By FAY SIMMONS

jsimmons@tribunemedia.net

The Government's revenue chief yesterday said some 7,500 vacation rental owners have registered with the Department of Inland Revenue but insisted this is "not so we can tax you".

Shunda Strachan, the Department of Inland Revenue's acting controller, said: “The short-term vacation rental platform that we have launched - and we're asking anybody in the short-term vacation industry to register on that platform - it's not so we can tax you. That's not the goal right now.

"I don’t want to be deemed disingenuous, but the goal of the platform right now is to gather information. You may have a short-term vacation unit on to your house, or you may have a duplex. I don't think that those will be taxed. Now it's a difference if you have a complex with ten two-bedroom units that you rent out for $3,000-$4,000 a week. Truly, we need to regulate that industry."

Ms Strachan said the registration drive was necessary for the industry to be properly regulated. She added: “I don't know if you're noticing online social media, where we've seen the advertisement for Airbnb in a palatial location, beachfront. And, when you look at it, I won't call the name of where it is. But no Bahamian would stay there because of the area that it's in.

"And they have pictures. They have used pictures or photos, right. That's false advertisement of some other place. And when the tourists, unsuspecting, get there, it is like, what is this? So we do need to regulate the industry. It's not regulated right now.”

She added: “And government really needs to know what it needs to do to really kind of help that industry out. We want to encourage Bahamians to go into that industry, right? It's an easy thing to do. If you have an extra property, it's more lucrative for you to rent that as a short term vacation property as opposed to long term.

“It's also doing something that's driving up the rentals on the family islands, but all of this is information that we need to gather in order to know what we need to put in place in order to make the industry safe, number one, and just make sure that everything is there that needs to be put in place – the roads, the clinics. Right again, a bunch of Airbnbs on some of these islands, and you have no clinic, no nurse even on the island. So, we really need to plan and that's really the purpose of the portal right now.”

Dexter Fernander, head of operations, Department of Inland Revenue, indicated that some short-term rental owners are operating outside of the scope of their licenses and should be regulated.

“Some have voluntarily registered as a business but, currently how the Value Added Tax says, if it's 45 days short term that's considered short term rental, there is no business license,” he said. “What we're seeing is a trend and that they are going beyond the scope of just short-term rental. We're seeing individuals are renting cars. So you have private plates, no SD, nothing controlled by road traffic. What happens to a tourists, they meet the key underneath the mattress at the airport, and they have someone who's doing private chef for them, they have pleasure vessels. So we're seeing that this spill off going into different areas that need to be regulated. So that is of a concern.”

Mr Fernander also defended the registration platform as a means to ensure the safety of visitors and the country’s reputation.

“If we're to look at the industry, on many days, we see the tourists come in the taxi with their bags, where cancellations happen, who they coming to see they don’t know,” he said. “They see a picture of someone who says that they are the property manager, the property manager doesn't even live in The Bahamas, the phone contact number is a WhatsApp number and in the United States that's organised. They have easy digital access into the building by code. So, there's no interaction and most of the times the transaction happens before they come here.”

He added “So, we are here as the regulators to make sure if we are seeing this trend, what do we do? What do we do to protect our image? Remember was a situation in Trinidad where a short-term rental was raped, and they had to start governing rules down to Trinidad as relate to it. So, before we reach that, we prevent it, we want to see who are the people out there in the market working on it, and what can we do?”

Ms Strachan also reiterated that foreign short-term vacation rental owners must obtain a business license and be registered for VAT, even of they do not meet the $100,000 VAT threshold.

She said “Foreigners in the industry need business licenses and have to be registered for that. So, if you're non-Bahamian, and you're in the short-term vacation rental market, you have to be registered for VAT, even if your turnover is not $100,000. And you need a business license. Now, we expect that, again, during amendment time, that everybody will need a business license, but there will probably not be a fee. I don't know if there'll be a fee for Bahamians in the in the market for short term vacation rental. But it would be good to get a license because then the bank can fund you and all that kind of good stuff.”