The Tribune

By NICO SCAVELLA

Tribune Staff Reporter

nscavella@tribunemedia.net

THIS month’s value added tax filings by small and medium-sized businesses will “challenge” the government’s automated Online Tax Administration System, according to Bahamas Chamber of Commerce and Employers Confederation CEO Edison Sumner.

He added that businesses needed to enter their filings as early as possible to prevent a potential system mishap.

Mr Sumner said while he expects that the Online Tax Administration System (OTAS) will be able handle the volume, he said filings by the SMEs, which constitute the majority of VAT registered companies, will essentially be the “telltale sign for the government” in determining how ready the system is for the April 28 filing deadline.

Small and medium-sized enterprises (SMEs), those companies that earn under $1m a year, account for roughly 75 per cent of VAT registrants, according to Mr Sumner. Next week’s deadline will mark their first filing since VAT was implemented on January 1 at 7.5 per cent.

However, it will be the third filing period for monthly VAT filers.

“So this time around this is where the government’s system is going to be essentially challenged for its infrastructure, etcetera,” Mr Sumner said. “Now you’re not only having to file or deal with the monthly filers, you’re now dealing with the bulk, which is three quarters or 75 per cent of all the VAT registrants which will now be required to file their returns on April 28 along with the other monthly filers as well.

“So certainly this filing period is going to be the telltale sign for the government to determine how ready the systems are, it is also going to count now for the bulk of the revenue that the government is expecting to recover at the end of April.”

Despite assurances from the VAT Unit as well as the VAT controller that the system is prepared to handle the potential load, Mr Sumner appealed for SMEs to be proactive in their filings.

“This is the other reason why we are encouraging businesses to start filing early, because if everyone waits until the last minute and tries to rush their filings through on the 28th, then the system may be challenged,” he said. “I don’t know. But the way to avoid that is to go in early.”

He added: “This is going to be the test now to see how well the system is built, how robust the system is, whether it can take the volume that’s coming through. We’ve been advised by the VAT Unit and the persons there, including the VAT controller, that the system is ready to handle the volume that’s coming through it. We’ll know better come next week Wednesday or through the next few days when people begin filing.”

Mr Sumner said some businesses have started to file their VAT returns. He added that businesses in the Family Islands have also been prepped by VAT officials in the lead up to next week’s deadline.

According to officials, failure to file returns before 11.59pm on April 28 will result in a $10,000 fine, six months imprisonment or both.