The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian businesses yesterday said they will not make cash payments to the Government’s tax Task Force because they do not trust that all the money will make it to the Public Treasury.

Mark A Turnquest, the 242 Small Business Association and Resource Centre’s (SBARC) founder, told Tribune Business that “most businesses don’t keep no bunch of money” at their premises and physical locations in any event as he revealed that his members were reluctant to settle any outstanding tax obligations in cash when the Task Force comes calling.

Asserting that all his members and clients inspected to-date have been in full compliance, he added: “All members say they are not paying any cash over the counter to pay any of their responsibilities because they don’t trust that the money is going to the Government. They don’t have any bunch of cash on hand in any event.

“In a nutshell, that was what people said. All of them agree that they don’t want that [surprise Task Force inspections] to occur again and will never put themselves in a position of non-compliance for that harassment to take place again. All of them are going to write to the Ministry of Finance and Department of Inland Revenue with their concerns but they say they will be professional.”

Both the reluctance of Bahamian businesses to settle any outstanding tax obligations using cash, and the fact many hold minimal sums on premises, counters one of the main reasons for why the Task Force says it needs to be accompanied by heavily-armed, machine gun-toting, police and Defence Force officers.

Prime Minister Philip Davis KC, addressing the House of Assembly yesterday, said: “In some instances, the advice I was given was that the armed persons were present because they were collecting cash at some establishments, and they were there for the purposes of protecting the cash as they were going on.

“But it just spilled over into other areas. There will be a demarcation where they are collecting cash, and they need security for the cash, or whether they’re just going to make inquiries about compliance. Those demarcations have been, are now being, implemented.

“We don’t expect to see that unless, as I said, it’s a circumstance where cash is being collected from a business establishment or, in cases where there’s some escalation of issues between the inquirers and the business places. As I said, there’s a better way, and the better way will be employed.”

Leonard Sands, the Bahamian Contractors Association’s (BCA) president, yesterday also railed against being forced to settle tax obligations via cash in asserting that he preferred to pay online so that receipts confirming the amount and timing of the payment were received.

“If I pay my taxes online before, why would I depart from that process?” he challenged. “Whether you come to my business or not, why would I be inclined to pay my taxes via cash? I want to make sure when I remit my taxes there’s a receipt for the amount I remit. Why would I hand it to these individuals?”

The Maritime Revenue Enhancement Task Force has previously said that it makes available facilities for businesses to pay by debit and/or credit card during its on-site inspections, but Mr Sands said providing it with the authority to demand on-the-spot payments appeared to be “over-reach”.

He added: “You have to question whether they thought things through. No one is against them having a right to inspect, but I want to remit taxes the way I want and make sure there is a receipt. Imagine the inconvenience: You show up to my business, don’t announce you are coming, say ‘do you have $3,000 in cash and can we take it from you?’ The answer is no.

“I think the Prime Minister is realising someone within his ministry, where he is responsible as minister of finance, has just gone off on a whim and done something silly. The Prime Minister, I believe, is just pulling this back and saying: ‘Did you think this through?’”

Mr Sands also queried the need for the Task Force, pointing out that the National Insurance Board (NIB) has had its own inspectorate for many years which goes and checks businesses for compliance. “The Government has to be careful not to create disruption to businesses because disruption to businesses is disruption to its tax collection, and then you defeat the purpose of what you said you were enforcing,” he added.

Mr Turnquest, who said his members were assessed for compliance with NIB, Business Licence fees, Customs and Immigration, said the whole process would have been made much more simpler and efficient if the Task Force had simply e-mailed statements and spread sheets to companies in advance showing which taxes they were non-compliant with and by how much.

In some cases, he added that officials had visited branch stores or outlets that only possessed sales data rather than head offices which held the information they were seeking. “They were not scared but very concerned,” Mr Turnquest said of his clients. “The customers were more fearful than the managers. They were like it’s a raid or a robbery when they first came in. That was a major problem.

“My advice to the Government is to try and do a better communication with the public and private sector because it has an adverse effect on the public. If customers are fearful, they think there’s a crime wave, a robbery going down, it does not give a good impression. Some of the customers also thought the business was being untruthful with the Government on taxes. It could have a bad PR effect.”