By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A Tax Coalition co-chair yesterday expressed hope that the Government’s plans to create a Central Revenue Administration (CRA) would not be “permanently delayed”, after the responsibility for collecting the new tax was switched to the Value-Added Tax (VAT) Department.
Gowon Bowe told Tribune Business that it was “a bit disappointing” that the CRA had yet to be formed, given that itpromised better co-ordination and administration of the Government’s due revenues.
The revised VAT Bill has handed responsibility for the Government’s centrepiece tax reform to a VAT Department, rather than a ‘VAT Division’ of the CRA that was originally envisaged in the draft November 2013 legislation.
However, Mr Bowe told Tribune Business that the CRA’s formation would have promised better enforcement of current and planned taxes, as it would have taken over a “disjointed” approach where revenues are being collected by up to 30 different agencies.
“I think there was significant support for having a Central Revenue Administration function that was going to collate and oversee all the elements of revenue collection,” Mr Bowe said.
“One of the main challenges we’re having with revenue is the disjointed effort by the various agencies. For the immediate future, there appears to have been a postponement of the CRA.”
John Rolle, the Ministry of Finance’s financial secretary, has confirmed, though, that the CRA proposal is far from dead.
In a VAT briefing given to the Bahamian media on Friday, he said the VAT Department that will be formed will be directly under the Ministry of Finance’s supervision, although in the long-term it will come under the CRA.
“Transition towards a Central Revenue Administration is continuing . This will result substantively from the merger of the VAT Department and the Department of Inland Revenue (property tax and business licensing),” Mr Rolle said, although no timelines were given.
Explaining the rationale for a CRA, Mr Bowe yesterday told Tribune Business: “When Business Licensing does not know what Customs and Immigration are doing, what all the bodies responsible for collecting revenue are doing, there are too many opportunities for unscrupulous businesses to get away with what they are doing.
“They could play off one government agency against the other, or adopt a backdoor approach to getting certificates of good standing and licensing approvals.
“I hope that’s not a permanent delay, and that they’ve not abandoned the concept of a Central Revenue Administration.”
However, both Mr Bowe and his fellow Coalition for Responsible Taxation co-chair, Robert Myers, backed the revised VAT Bill’s Section 15, which appears designed to prevent ministerial and political interference in the new tax’s operations.
The new clause, as detailed by Tribune Business yesterday, limits the minister of finance to giving “general” policy directions to the VAT Comptroller.
It prevents the minister from “intervening” in the newly-established VAT Department’s daily operational, collection and enforcement efforts, and from “participating in and influencing” decisions concerning specific VAT registrants and taxpayers.
On the surface, this appears designed to prevent political interference and the protection of VAT delinquents with the right political and family connections.
Whether this will operate as intended in practice is another question, and the proverbial ‘proof of the pudding will be in the eating’, as the minister can still request information on particular taxpayers by writing to the Comptroller.
Mr Bowe said both the private sector and VAT consultants from New Zealand had, in talks with the Government, called for “a separation of powers” between the minister and Comptroller as “one of the principal elements” in the Bill.
This prevents the political directorate changing policy, or removing the Comptroller, something Mr Bowe said was vital to maintaining the “comfort and assurance” that the Bahamian people needed to have when it came to VAT’s application.
The Tax Coalition co-chair said it would also prevent “arbitrary changes” in VAT’s regulations, and amendments being made by different administrations and ministers, again bolstering confidence in the system.
“Anything needing meaningful change will have to go through an Act of Parliament, which increases transparency and requires a full and frank discussion,” Mr Bowe told Tribune Business.
Mr Myers, for his part, said Section 15 “sounds good to me”, adding that it needed to also be employed in legislation governing other parts of government.
“We know that it’s been improved,” he said of the revised Bill. We had concerns about the over arching powers of the Minister in the last go round. It seems like they’re addressing it.
“There’s still a few areas of concern, but by and large it has been tremendously improved.”
Comments
Well_mudda_take_sic 9 years, 8 months ago
So who appoints the VAT Comptroller and how do we (the people) get rid of a VAT Comptroller who may be more inclined to do the will of his political master rather than follow the rule of law and treat all equally?
The_Oracle 9 years, 8 months ago
No matter what they write into law, They will still do what they do so well. They write the laws to use against us, not themselves. As for the Central Revenue Admin, now we know why Ingraham and Laing created that in the 2010 budget. After all, these goofs could only back into a problem. The PLP and FNM own VAT jointly. One creates it, the other got caught holding the bag. They've been playing political tag with VAT since 2003.
proudloudandfnm 9 years, 8 months ago
Lady P - $300,000.00 plus in RPT
Ishmael Lightbourne - $100,000.00 plus in RPT
Leslie Miller - $200,000 plus in BEC bills
3 people, over half a million dollars....
WE DO NOT NEED VAT.....
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