The Tribune

• BICA chief: Accountants ‘overworked and stretched thin’
• ‘Race against time’ on Business Licence and regulators
• But tax authorities say Business Licence is ‘flowing well’

By BRENT STUBBS

Chief Sports Editor

bstubbs@tribunemedia.net

Bahamian accountants and many companies were yesterday said to be caught in “a pressure cooker environment” as they race to meet imminent Business Licence and regulatory audit deadlines.

Pretino P. Albury, the Bahamas Institute of Chartered Accountants (BICA) president, in a written response to Tribune Business inquiries said the profession is “overworked and stretched thin” as it bids to meet the June 30 target for large companies who gained an extension for their Business Licence audited financials as well as deadlines imposed by the likes of the Central Bank and Securities Commission.

Describing accountants and their corporate clients as being “in a race against time” to escape the possibility of Department of Inland Revenue (DIR) fines, he added that there remains “a call for understanding and flexibility” from the tax authorities regarding the submission of audited financials for companies with annual turnovers exceeding $5m.

However, John Williams, the Department of Inland Revenue’s communications chief, yesterday told this newspaper that - while a few companies have requested and been granted extensions - for the most part $5m-plus turnover businesses have been doing “very well” in supplying audited financials on time.

He encouraged firms that require an extension to reach out to the agency and ensure they are in compliance and can receive their Business Licences. Mr Williams said: “There have been a few persons requesting extensions simply because, maybe, they were not able to get the proper access or getting used to the new system or just unable to log in.

“But they have been actually doing very well with regard to that, too. We want more to come in, you know, because at the end of the day we want everybody to be compliant and do everything that they have to do but, as I said, everything is flowing quite well on the Business Licence side.”

But, according to Mr Albury, the accounting profession and its corporate clients are feeling the strain. And, when it comes to the latter, this is not confined to high-turnover companies. “Despite being a minority, some entities were unable to meet the March 31 deadline for the review of their Business Licence return,” the BICA chief said.

“They now find themselves in a desperate scramble to secure the services of available practitioners to assist with compliance. Information coming in indicates that accounting firms across the country are overwhelmed, juggling the demands of the new Business Licence deadlines alongside existing annual regulatory commitments.”

Such “commitments” involve meeting deadlines to submit audited financials to the likes of the Central Bank and Securities Commission involving hundreds of their licensees. “This has created a pressure cooker environment at the moment where the survival of businesses hinges on compliance,” Mr Albury told Tribune Business.

“Licensed BICA members are committed to ensuring their clients remain compliant. However, they face mounting pressure as the June 30 [Business Licence] deadline looms large. The accounting community is overworked and stretched thin, striving to meet not only the new Business Licence requirements but also the annual regulatory deadlines that were already in place.

“Firms are maxed out, and many are concerned about their capacity to meet these demands. Adding to the strain, the Department of Inland Revenue (DIR) has threatened significant fines for those who fail to meet the June 30 deadline,” he continued.

“This has escalated the urgency for both businesses and their accounting partners, who are now in a race against time to avoid these punitive measures. The financial implications of missing the deadline are severe, exacerbating an already stressful situation.”

Mr Albury said that “compounding these challenges are communication and support issues with the Department of Inland Revenue. Many businesses and practitioners report that queries and concerns are not being addressed in a timely manner, leaving them in the lurch as they navigate complex compliance requirements”.

He added: “The lack of timely responses and support from the Department of Inland Revenue has been a recurring cry, further complicating efforts to ensure all client concerns are adequately managed. 

“In light of these challenges, there is a call for understanding and flexibility from the Department of Inland Revenue. The business community is urging the Government to consider the practical difficulties faced by practitioners and businesses alike.”

BICA, on behalf of Bahamian accountants, had urged the Government to delay the Business Licence audit requirement for firms with an annual turnover of $5m or more by one year. That was rejected by the Ministry of Finance, which set end-April 2024 as the deadline for $5m-plus businesses to provide audited financials. However, it allowed those with good and valid reasons to obtain an extension to end-June.

Simon Wilson, the Ministry of Finance’s financial secretary, said that based on the Government’s own records there are only about 25-30 standalone companies that fall into the $5m-plus annual turnover bracket. All others are part of larger corporate groups, either the parent or its subsidiaries, and could be addressed as one with costs spread over and shared between these entities.

This was backed by Philip Davis KC, who in last week’s Budget communication said that only about 1 percent of Business Licence applicants - roughly between 500 to 600 companies - fell into the $5m-plus annual turnover category that maintains they submit audited financial statements.

Mr Williams yesterday said Department of Inland Revenue’s upgraded tax and Business Licence online portal is “running very smoothly” with companies able to receive their Business Licences within the required turnaround time.

The portal was rolled out on January 1 and faced a number of technical issues that frustrated businesses that were trying to meet VAT and Business Licence filing deadlines with the latter set at end-January 2024.

Mr Williams said although there are a “few kinks”, the system has been running smoothly and businesses can now file their VAT payments and renew Business Licences on the platform.

He said: “Everything has cleared out quite well and everything is running smooth. Persons are able to apply. Depending on the type of business, you are able to get it within the required time and persons have been getting used to the new system and the new system is flowing. Now, of course, we still have a few kinks here and there, but for the majority things have been running very smoothly.”