The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Opposition’s finance spokesman yesterday renewed demands for the Government “to reverse course” and improve the ease of doing business surrounding the Business Licence renewal process.

Kwasi Thompson, the east Grand Bahama MP, in a statement called on the Davis administration to “reduce the bureaucracy and roadblocks that stop Bahamians from conducting lawful commerce” and ease the compliance checks it is conducting to verify the accuracy of turnover figures reported by companies for Business Licence renewals.

He urged: “Grant all Business Licenses without delay unless the Department of Inland Revenue has firm evidence of non-compliance. Flag those businesses that the Department of Inland Revenue thinks may be under-reporting their business revenue or evading taxes. And use the tax audit team and revenue collection teams to go after those specific businesses.

“The Government must stop punishing the innocent for the guilty. End the practice of requiring business tenants to get real property tax information from landlords. That is not the responsibility of tenants, and this requirement is wholly unreasonable.

“Give the businesses until the next licensing period to become compliant with the new financial information requested by the Department of Inland Revenue. The Government should not push this on small businesses with no notice and time to prepare, and to find the monies to prepare the required financial information.”

However, Michael Halkitis, minister of economic affairs, last week said approving Business Licences and then seeking to enforce compliance afterwards had resulted in the build-up of significant fee arrears due to the Government. And, if landlords will not provide business tenants with their real property tax numbers, a name and location will suffice for the Department of Inland Revenue’s purposes.

Mr Halkitis said the Department of Inland Revenue was not requiring small businesses with an annual turnover of less than $100,000 - and which have to pay zero Business Licence fees - to provide income statements as proof of turnover. This newspaper had been informed that the agency is asking, post-submission, for figures such as revenue and gross profit in its checking.

However, he added that the tax authorities simply “cannot look the other way” when 47 percent of Business Licence applicants are submitting no turnover or “exactly the same amount for the last three years”. The Department of Inland Revenue, the minister said, must not ignore discrepancies and inconsistencies, or take turnover figure supplied by companies “at face value” if they “do not make sense”, given the need to collect all monies due to the Public Treasury.

While conceding that turnover verification checks do cause delay in Business Licence renewals, he added that the revenue agencies believe they “can strike the balance” between regulation, ease of doing business and collecting the proper amount of fees.

Mr Thompson, though, yesterday asserted that the 2020 report produced by the Prime Minister’s Delivery Unit under the Minnis administration showed Business Licence renewal times had been cut from 61 days to six days. “We demand that the Government reverses its course and adopt the policies put in place by the FNM that improved the ease of doing business, and that put funds in the hands of entrepreneurs and small businesses,” he added.

“The Davis administration is now frustrating Bahamian businesses that cannot get their licenses timely. There is a better way for the Government to get to its goal of better tax compliance for Bahamian businesses.

We call on the Government to do the following. Develop and publish a plan that specifically advances ease of doing business for Bahamian small businesses. The Government must reduce the bureaucracy and roadblocks that stop Bahamians from conducting lawful commerce instead of increasing the impediments that they are doing now.”

“They’re being required to provide some additional information so the Department of Inland Revenue is in a position to verify turnover,” Mr Halkitis said of businesses. “What we are undertaking is that all Business Licence renewals that apply will be dealt with by March 31 so that no one will be in danger of not having their application completed...

“What Inland Revenue has to do is verify that what businesses are reporting, as best as they can, is accurate. The law empowers Inland Revenue to request additional information. So, for example, if they see a return that just does not make sense, it’s too low, but you might have a business who, you know that they did not make $20,000 last year, all right, and you have ways to check this by Customs imports etc, utility bills and all sorts of things.”

“In this particular case, that is under-reporting, and so it is incumbent upon them to do some checks because if we look at the big picture all of us are taxpayers, and all of us are required to pay our share, and so the Department of Inland Revenue cannot just look the other way when someone is providing the number and just take the number at face value.”