Qc Pledges Constitutional Challenge To The Vat Bill


Tribune Business Editor


A well-known QC yesterday said he is mulling whether to challenge the Government’s plans to prevent delinquent Value-Added Tax (VAT) payers from leaving the Bahamas before the legislation even becomes law.

Fred Smith QC, the Callenders & Co attorney and partner, warned that if the Government succeeded in getting Section 64 in the revised VAT Bill on to the statute books and enforced it, it would soon seek to apply similar ‘travel bans’ to defaulters on other taxes.

Arguing that Section 64 was akin to something “totalitarian dictatorships” would seek to implement, Mr Smith backed private sector executives who had warned it violated freedom of movement provisions in the Bahamian Constitution.

“I will immediately bring an action for a declaration that it is an unconstitutional provision in the law,” Mr Smith told Tribune Business, when asked what he would do if Section 64 was ultimately included as is in any VAT Act.

“I might even sue beforehand,” he added. “I am considering suing before it comes into effect. I call on anyone who believes in freedom and democracy to protest and oppose this horrible provision.”

As revealed on Monday by Tribune Business, the new Section 64 in the revised VAT Bill would allow the VAT Comptroller to prevent delinquent taxpayers from travelling until they pay off their liabilities in full or agree a settlement/payment plan that is acceptable.

The legislation states that persons owing the Government VAT monies “may not leave, or attempt to leave, the Bahamas for an indefinite or prolonged period of time” - although it does not attempt to specify the duration that would meet this criteria.

“Where the Comptroller has reasonable grounds to believe that a person liable to pay tax outstanding under this Act may leave the Bahamas for an indefinite or prolonged period without paying such tax, [the Comptroller] may] issue a certificate in the prescribed form to the Commissioner of Police and the Immigration director, requesting the Commissioner and director respectively to take such steps as may be necessary to prevent the person from leaving the Bahamas” until due payment is made, the revised Bill states.

Those who attempt to flee the Bahamas without making due payment will face either a $100,000 fine or imprisonment for up to a year.

Section 64 appears designed to prevent foreign owners of Bahamas-based businesses, as well as Bahamians, from running away from their VAT liabilities, but it could well spark legal action of the kind promised by Mr Smith.

Analysing Section 64’s impact as is, Mr Smith said; “Every Bahamian, permanent resident, work permit holder, and their children and families, can be stopped at the border and prevented from travelling - to go on vacation or conduct business - simply because it is alleged that they owe VAT.”

This, he added, was exacerbated by the “vagueness” of the ‘indefinite or prolonged period of time’ wording, and the QC added: “There are no rules or boundaries, and excess and abuse will reign supreme.”

And Mr Smith quickly warned that, if it was successful under VAT, the Government would likely extend the ‘travel ban’ to cover defaulters on other taxes.

‘The idea of being able to stop people from travelling because of alleged arrears of taxation under VAT means the Government can extend this to arrears of real property tax, National Insurance Board contributions, Customs Duties and real property taxes,” Mr Smith told Tribune Business.

“If this legislation applies to one tax, it can apply to any tax, and this kind of dictatorial approach to government will make Bahamians prisoners in their own country. If this clause is permitted to stand, each successive government will extend it to every form of taxation.”

Mr Smith added that Section 64 would effectively make Bahamians and residents “slaves of the taxman, who will be judge, jury and executioner all in one.

“Once they stop us from travelling, does that mean they’ll take us into custody until we pay the taxes? Where will it end?”

Mr Smith added that the Bahamas appeared to be “going backwards as a democracy, instead of forwards”, and warned that freedoms were often eroded by stealth, one stage at a time, if governments were allowed to get away with the first move.

Gowon Bowe, the Tax Coalition’s co-chair, told Tribune Business earlier this week that the restriction contemplated by Section 64 would likely violate constitutional rights relating to a person’s ability to move and travel freely.

He added that it had been “a sticking point” in the initial November 2013 draft legislation, and had now been ‘broken out’ and stated more explicitly in the revised legislation tabled in the House of Assembly last week.

And Mr Bowe, a PricewaterhouseCoopers (PwC) accountant and partner, said imposing restrictions on a person’s ability to travel should be the sole preserve of the judiciary and Bahamian court system, not a tax authority such as the proposed VAT Department.

“I am not sure that will stand constitutionally. It would run against movement and free movement,” Mr Bowe told Tribune Business.

“The focus should be on prosecuting those individuals, with their ability to travel restricted only by the courts. That should be purely a court function; that shouldn’t be the ability of the tax authority to restrict a person’s movement.”

Suggesting that the focus should be on prosecuting VAT delinquents, not taking away their travel and movement freedoms, Mr Bowe said the world was “too much of global society to impose something as outdated as that”.


The_Oracle 6 years, 1 month ago

The Government has shown a dismal record on tax collection under the Authorities it currently has at its disposal, and has always had. So they have decided a bigger stick is needed! They should learn to use (and thereby respect) the stick they already have. But nooooooo, because there are some people they want and need to harass, target and steal money from. Control. Unlimited power.


sheeprunner12 6 years, 1 month ago

VAT will be DOA .......................... this is a stupid lose-lose proposition with ulterior political motives. The people and the private sector will seal its fate.


Islandgirl 6 years, 1 month ago

Congratulations, Mr. Christie. We are truly on a fast, one way trip into the hell you have created for us. Your legacy is assured. This is the icing on the cake.


Thinker 6 years, 1 month ago

We're going to need bigger prisons now, hire more people! Job increases! You did it Big Guvment!


proudloudandfnm 6 years, 1 month ago

What an amazingly ignorant government we have....



The_Messenger 6 years, 1 month ago

“The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power, pure power.”

  • George Orwell, 1984

The_Oracle 6 years, 1 month ago

"The Party" whether PLP or FNM are paving the way for their own lynching. Between them both, their Elected and appointed have pocketed richly (theft, influence peddling) and undermined the rule of law, by ensuring themselves immunity. (no thief will vote to hang thieves) the same rule of law they will be wanting desperately to protect them when the angry mob comes calling, and calling names. They and they alone are the sole reason the Bahamas is in the dismal fiscal situation it is in, and by Bahamas I mean its people, rich, middle class and poor. The power to tax, coupled with fostering despair and exclusion, are the most onerous of human conditions and most likely to cause major unrest. Not among the poor, but among the rapidly diminishing middle class. Despotism has no nationality, no society is immune from itself or its own.


sheeprunner12 6 years, 1 month ago

What we have is a kleptocracy .................. that is nearer to a dictatorship than a democracy


TheMadHatter 6 years, 1 month ago

Only 8% of voters voted for the DNA last election. Also the people did not see fit to give the DNA (or any other 3rd party) even ONE seat in the house.

The people simply LOVE the PLP and the FNM.

That is democracy in action. They may continue to love them for as long as they wish.

I predict that in 2017 either the FNM or the PLP will win the Government. Why? Because the people will still not yet have suffered enough.



sheeprunner12 6 years, 1 month ago

If this was a real democracy the DNA would have been entitled to at least ONE seat in Parliament based on the proportional representation model ......... this is where we need to go with our democracy. What we have now is a PLP government holding 79% of the HOA seats but with just 48% of the popular vote. That is not a modern democracy.


asiseeit 6 years, 1 month ago

The problem is that for the last forty years the public purse has been used and abused by public servants( government, civil servants and their cronies). The public servants have cooked their own goose, through theft, graft, ineptitude, and sloth. There is no more free ride, the general public who pay their taxes are pissed right off and about to rebel, we will no longer be abused and STOLEN FROM! "Straiten up and fly right or you are cruising for a bruising", some good advise that the public servants of this land should heed!


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