The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Previous administrations have been “too lenient” on tax dodging supporters, a small business adviser has asserted, while warning: “The Government ain’t playing around no more.”

Mark A Turnquest, the 242 Small Business Association’s founder, told Tribune Business in a recent interview that several of his clients were moving to either settle or negotiate payment plans for tax arrears after the Government unveiled several enforcement strategies targeted at VAT, real property tax and Business Licence non-compliance.

While the tax authorities have yet to be “overly aggressive” in demanding what is due, he disclosed he is advising them to be “honest, open and lay everything on the table” regarding sums owed, ability to pay and their company’s current circumstances when talking to the Department of Revenue (DIR)

And Mr Turnquest also disclosed to this newspaper that he is warning business owners not to agree payment plans they will ultimately default on because the Government will “hold their feet to the fire” given its need for revenue, and to secure every cent due to the Public Treasury, given The Bahamas’ present fiscal predicament.

“I just had a discussion with one of my clients who owns a rental company and is backwards on his VAT,” he revealed. “He didn’t think the Government was going to go to that extreme with the VAT in garnishing people’s bank accounts, but he knows he’s been neglecting it for years and now he sees that the Government is serious.

“He indicated that he knows the Government is serious now, so he’s going to do his best to bring his bills and taxes up to date now because the Government is going to extreme measures. He’s quite aware now that the Government’s ain’t playing around no more.

“I told him to go into the Government and make an agreement to pay all his bills. You don’t want to let it go too bad to the point where the Government starts taking extreme measures. I told him that he now has to go in and get things done, and don’t waste time and cause your business to slow down by being put on the garnishing list. I have no fault with the Government taking that position. You can’t sugar coat it.”

Besides garnishing the bank accounts of companies that have failed to pass on VAT, which is collected from consumers, to the Public Treasury, the Department of Inland Revenue has also unveiled plans to seize - and potentially sell-off - commercial and foreign-owned properties belonging to long-standing, chronic delinquents who have made no attempt to settle their real property tax debts.

“Everyone is doing their best to get their house in order,” Mr Turnquest said of his Association members and consultancy clients with tax arrears. “None of my clients have been adversely affected by the Government’s measures yet. The Government agencies are not being overly aggressive.

“Everybody is trying to fulfill their mandate to be tax compliant because you can never win against the Government. All of them have indicated they will do their best and see if they can negotiate terms and agreements. I told them they have to be honest, and open, and leave everything on the table and be compliant.

“They have to let the Government know what they can and cannot do. When they set payment agreements, they have to stick with them. I told them not to get into any agreements they can’t handle because the Government is going to hold their feet to the fire. Next year they will have to go back to renew their Business Licence, and they know if they are not compliant they will not get anything,” he added.

“The most important thing is you have to sit down with the tax authorities and bring your account up to date one way or another. If it’s going to take a couple of years, have payment installments that you can afford. For too long people were just ignoring and not paying their bills, and that’s why our debt is so high. I fully agree; small, large or any type of business, they have to pay. Even the landlords. Every day they take rental revenues. What do they do with it?”

Mr Turnquest said politics had inevitably played a role in the relatively high level of tax non-compliance in The Bahamas. “What’s happened is that the Government does things too politically,” he argued. “They know some things cause people to be mad at them, and that’s why all governments have been lenient to taxpayers and with NIB contributions.

“When the PLP is in office they ease up on PLP supporters, and when the FNM is in office they ease up on FNM supporters. That is how it is. That is why budgets are going higher and higher, and not going lower and lower.”

Arguing that the Government must also not discriminate against tax delinquents based on their size, Mr Turnquest added: “They need to look at the big companies and the small companies alike. They’ve got to be fair to all businesses, and do the same thing with the ones that owe $200,000 and the ones that owe millions and millions.

“I was telling people over the Business Licence: How can you run a business without income statements? I was the only one telling people they were supposed to pay, and everyone was getting mad at me. They have to do what they’re supposed to be doing. When you’re in business you have to behave like you’re in business and pay your licence fees, pay your taxes and pay your employees. You can’t run away from that. You can’t run away from paying your bills.”