The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Almost $95 million in real property taxes went uncollected during the 2010-2011 fiscal year, taking the total sum outstanding to what the Auditor-General described as an “exorbitant” $541.886 million.

The Auditor General’s report, tabled in the House of Assembly on Wednesday, again raises the question of whether the Government should focus first on collecting all taxes due to it under the existing system, as opposed to introducing Value-Added Tax (VAT) and other new taxes/fees.

Conversely, it also suggests that previous estimates by Michael Halkitis, minister of state for finance, that the Government could effectively ‘double’ its annual real property tax collection to close to $200 million - over 2 per cent of GDP - may not be too far off the mark.

The Government currently collects around $90-$100 million in annual real property taxes, so gaining the revenue foregone in the 2010-2011 fiscal year would take it close to Mr Halkitis’s target range.

The Auditor-General’s report estimated that $82.038 million in current real property taxes for 2010-2011, along with $12.742 million in penalty surcharges, went uncollected that fiscal year.

When added to the $447.105 million in pre-existing outstanding real property taxes, the 2010-2011 fiscal performance took the total sum north of half-a-billion dollars -matching the cumulative subsidies the Bahamian taxpayer has given to Bahamasair since inception.

“The outstanding amount of $541.886 billion is exorbitant, and continues to increase from year to year,” the Auditor-General said, in a warning that he repeats every report.

“We recommend that immediate measures be implemented to address the problem of outstanding taxes.”

Elsewhere, the 2010-2011 report revealed that more than $2 million in fees remained outstanding from leaseholders of Crown Land.

“We strongly recommend that management vigorously pursue the collection of outstanding funds,” the Auditor-General added.

The report also focused on the Ministry of Works’ fuel depot, noting several instances where suppliers had failed to provide it with the quantity that had been paid for.

And, while some $1.418 million worth of fuel was supplied to vehicles used by government ministries and departments in fiscal 2010-2011, some 21.3 per cent of this sum - $302,866 - was unpaid at fiscal year-end.

The Auditor-General’s Department called for improved control measures at the Ministry of Works’ fuel depot, noting that fuel was being issued to unauthorised (non-government) vehicles.

“An extraordinary quantity of gasoline was issued to a number of vehicles,” the Auditor-General found, with “excess” fuel issued “without authorisation”.

And, in its review of the Department of Environmental Health Services (DEHS), the Auditor-General found that contracts were being awarded without the recipient having a valid Business Licence.

One such contract was awarded to an ‘Association’ to pick up litter and low a roadside lawn from Faith Avenue to Gladstone Road.

“Further, a construction company was also awarded a contract to provide the same services at the same location during the period,” the Auditor-General’s report found. “We observed that there are no roadside lawns in the said vicinity.”

And it also called on the Ministry of Education/Department of Public Health to “justify” why an outside contractor was awarded $9,500 for cleaning up the Gambier community when they already employed persons to perform the same duties.

Recommending that the $9,500 be recovered, the Auditor-General found that payments for cleaning Yamacraw Park had been made to a “full-time employee of the Government” who had held the post since February 15, 1988.

The DEHS director, the report said, acknowledged that contracts were not be to granted to government agents/employees, making this deal a “conflict of interest”.

Payments were also made to government employees to maintain Quarry Mission Road Park and G. K. Symonette’s library, violating the ‘conflict of interest’ provision again. Two vendors were also paid for the maintenance of the same park.