By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Bahamian businesses must brace for the launch of formal Value-Added Tax (VAT) audits in 2016, with the Government building up an extensive database of their return activity.
John Rolle, the Ministry of Finance’s financial secretary, told Tribune Business that the revenue authorities would “definitely” launch formal tax audits of VAT registrants during 2016.
With staff being prepared currently to undertake these audits, Mr Rolle said: “What we need to do in continuing this process is the launch of formal audits of businesses, once we have built up a number of returns.
“We move into the 2016 process in a much more informed position to begin to do tax audits. Right now we do a lot of checking of returns and oversight of returns, but we will be looking more at the systems in businesses, and their returns and compliance.”
The launch of VAT audits, which will be conducted by the Central Revenue Administration (CRA) and VAT Department, are likely to prove something of a ‘culture shock’ for many Bahamian companies.
To-date, few have undergone extensive scrutiny by government inspectors poring over their books and financial records. In the absence of income tax and other formal levies, the Government has previously asked companies and their auditors to certify that due sums have been paid to the Treasury.
However, the ‘paper’ or audit trail created by VAT’s ‘input’ and ‘output’ payments gives the Government the perfect opportunity to assess whether its 6,000 registrants are remitting all due monies to it.
When asked to confirm when the VAT audits would start, Mr Rolle replied: “Definitely during the course of next year. The nature if this auditing will start to creep into our work.”
Mr Rolle, who is also the acting VAT Comptroller, implied that the likely first audit ‘targets’ would be its largest VAT-payers plus companies with whom the Government had compliance concerns.
“It is risk-based, and part of the risk formula is who collects more of the revenue,” he told Tribune Business. “Size of the taxpayer will have some bearing.”
Emphasising that the Government was “very satisfied” with VAT’s progress almost one year into the new tax, Mr Rolle said it had yet to initiate any prosecutions of delinquent taxpayers.
“There have been businesses that would have incurred penalties for late registration and the like, but we’ve used administrative tools up to this point,” he added, reiterating that compliance rates across all filing frequencies remained high.
Still, Mr Rolle said that while the private sector’s general performance was good, there were some companies consistently late in submitting their returns and associated payments.
“Some businesses always file, they always pay constantly, but we would have seen cases where you have a high compliance rate but people will still be a day or two off from the deadline,” he explained.
“Now our system is able to flag those cases for penalties. That will likely cause some businesses to be even more attentive to ensuring payments are made on the 28th of every month.”
Comments
watcher 8 years, 4 months ago
Let me get this straight.......some businesses are paying "a day or two late", yet the Government has not performed one single VAT audit in the field, almost a full year after the tax came into effect? Another example of Government inefficiency vs private sector efficiency. What exactly has Mr Rolle and his department been doing all this time? Does it really take a whole year to train an auditor what to look for.......smh
My guess is....trying their damndest to hide the VAT income generated, so that we The Public don't know if tax income has been used to pay down any our nation's huge debts (the raison d'etre for VAT's introduction) I seem to remember he was so full of enthusiasm early this year, telling us how much had been collected, but since then not a peep as to where the money has gone.
Shame on him !!
asiseeit 8 years, 4 months ago
The Government of the Bahamas needs to tell the citizens of The Bahamas what is being done with their VAT money. We pay our taxes yet we do not know what or where that money goes. Something about that just makes me vex to the bone. By law I am required to pay these taxes and the politician and the civil service just piss it away with no accountability. Who is working for who in this stupid country?
John 8 years, 4 months ago
So let me get it...if a vat registrant is audited and he/she doesn't like the results, they can go get an accountant to perform another audit, just like they did with Urban Renewal and ting like dat aye?
MonkeeDoo 8 years, 4 months ago
any chance the Trib could get a more friendly photo of this guy. ? He looks like the devil incarnate !
ohdrap4 8 years, 4 months ago
replace it with the minion picture, it is friendly to children
Thinker 8 years, 4 months ago
Can someone just explain to me Why the Prime Minister and the minister of finance are the same?
sealice 8 years, 4 months ago
because that's how the head tief keeps the littler tiefs from tiefin from him!
Thinker 8 years, 4 months ago
Tell me why this isn't theft.
themessenger 8 years, 4 months ago
If the government can't show the business community where and how they have spent the VAT income received to date then business should collectively tell the government that (A) we already have enough toilet paper left over from their previous audits and (B), we 're not paying anymore VAT until they can give an audited accounting for what has already been collected. What could they do in the face of that sort of solidarity, lock up the entire business community? Unfortunately, given the pathetically passive nature of our sheeple, it will never happen.
asiseeit 8 years, 4 months ago
We need to audit the Government to see where they are wasting, mismanaging, and stealing our VAT dollars. The government and the civil service are the biggest threats to the well being of The Bahamas. We need accountability and transparency to keep the kleptocrates in check!
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