The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A senior tax official yesterday said complaints that visiting yachts are struggling to pay VAT on charter contracts is “definitely news to me”.

Dexter Fernander, the Department of Inland Revenue’s operations chief, told Tribune Business he is “baffled” at assertions by Peter Maury, the Association of Bahamas Marinas (ABM) president, that yacht and boat charters are facing significant delays in obtaining Taxpayer Identification Numbers (TINs) because there is a “fast track process” for their issuance.

Calling on the ABM chief to provide evidence to support his concerns, he added that the Department of Inland Revenue typically issues TIN numbers within “30 minutes” of the Port Department sending it a copy of the charter contract because it knows this is “easy money” for the cash-strapped Public Treasury to collect.

Mr Fernander spoke out after Mr Maury complained to this newspaper that yacht charters are now facing delays of up to six to eight weeks to obtain a TIN number from the tax authorities. Besides creating an obstacle to obtaining a charter licence, which requires a valid TIN, the ABM president asserted that this is also holding up tax payments that are badly needed by the Government.

Mr Maury said that, in some cases, Bahamas-based yacht agents and brokers are holding the VAT monies due from their boating clients and paying these on the latter’s behalf when the TIN number comes through. But, if the quarterly VAT filing deadline for payment is missed, he added that local companies were returning the tax payment to their clients and telling them to submit this sum in the next filing period.

Explaining that local agents feared being stuck with liabilities if they held the VAT payment, either to the Government or the client, Mr Maury told Tribune Business: “We can’t get TIN numbers to file for those boats. We have the VAT payments, but without the TIN numbers we don’t have a way to submit the payments when the boats are here.

“In some cases, three months ago, I had applied for it and can’t even get TIN numbers. I don’t know what it is. I know in my company, and heard from other companies, that they’re waiting for TINs. It takes forever to get a TIN number, and then you have to file the VAT and you can’t get a charter licence until you get the TIN number.”

Mr Maury, arguing that the delays in obtaining TIN numbers represented a further deterrent to visiting boats and charters coming to The Bahamas, added: “It just makes it difficult for the yachts to be compliant. The biggest thing is the yachts are owned by wealthy people. The last thing they want to do is do something wrong in the country and have a tax liability or anything else. They will choose other destinations.”

Confirming that yacht and charter agents/brokers are reluctant to hold on to VAT payments on behalf of clients, the ABM president said that if a filing period was missed the funds are being returned to the boats because “nobody wants that liability”. They then have to file and pay in the following quarterly reporting period.

“The Bahamas agents don’t want to have the funds in their account because the boats are going to say: ‘Where’s the receipt from the Government to cover their end?’ I’m not going to hold on to it. It’s money that has to be submitted. The Government is going to say where’s my money? It puts Bahamian businesses in a precarious position,” Mr Maury said.

After starting out well, he added that yacht charter requests for TIN numbers were now sometimes taking as long as six to eight weeks to come through. He added that the delays appeared to start around March this year, when the Department of Inland Revenue was facing the bulk of Business Licence fee payments, filings and related inquiries.

However, when informed by Tribune Business of Mr Maury’s complaint, Mr Fernander retorted: “That’s definitely news to me. Once the Port [Department] signs off on a copy of the contract we fast track those. We don’t even let 30 minutes go. That’s very interesting. That’s very strange.”

Acknowledging that he was not directly responsible for dealing with yacht charter VAT, he added: “I can’t even see a reason for a delay. Thirty minutes after the Port gets a copy of the charter contract we regularise them. That’s easy money. The fast track process, we do not to my knowledge, we don’t have any delays. We try to get them because it’s easy, quick revenue.”

Mr Fernander then challenged M Maury: “Give us a reference to validate the claims you make so that we can check on this stuff. We don’t have any delay on this stuff. That’s easy turnover revenue for the Government and we have a special fast track process for them. I’m baffled by the comment.”

The Department of Inland Revenue chief said he would reach out to Shunda Strachan, its acting comptroller, and ask her to contact Tribune Business for further comment. No call, though, was received before press time last night.

Mr Maury, meanwhile, said he believed the TIN delays are due to Department of Inland Revenue staff being “swamped with all the work and requests” they have to deal with. He added: “I know we’ve sent in requests for TIN numbers as agents and sometimes don’t get a response.

“In my other businesses we’ve asked questions on the portal and sometimes it takes them two to three weeks to get back because of all the stuff they’re dealing with. The business are so overworked, and I’m sure they’re overworked.”