The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Tax Coalition’s chairman is not expecting “huge material discrepancies” between the private sector and the Government over the first Value-Added Tax (VAT) filings, although he acknowledged: “The proof of the pudding is in the eating.”

Gowon Bowe told Tribune Business that January’s VAT filings, which are due to be submitted by March 2, should be “materially correct” because only registrants with an annual turnover exceeding $5 million are required to make them.

These companies, he explained, will likely have more sophisticated IT and accounting systems that will enable them to keep better track of revenues, plus VAT ‘inputs’ and ‘outputs’.

Conceding that not all returns will be “100 per cent accurate”, Mr Bowe said he expected most of the Government’s monthly filers - from whom it expects to collect up to 70-80 per cent of all VAT revenues - to have addressed any problems by the 2015 mid-year.

He added that the quarterly VAT filers, businesses with annual turnovers between $400,000 and $5 million, would likely experience greater accuracy challenges because their accounting systems and personnel may not have the same capacity as their larger counterparts.

“I think there’s sort of mixed emotions about it in terms of how smooth it will be,” Mr Bowe said of January’s VAT filings, “but all the businesses that I’ve spoken to are focused very heavily on ensuring they have the accounting numbers.

“Whether they will all be 100 per cent accurate, only time will tell, but all businesses I’ve contacted are confident that they’ve tracked their revenues. Input credits are something they may struggle with.”

Mr Bowe expressed confidence that Bahamian companies with annual turnovers exceeding $5 million or more would possess “proper general ledger systems”, ranging from the basic Quikbooks to more advanced formats such as J D Edwards.

“They will have proper systems in place where they have been tracking revenues for some time,” he added. “It’s more a case of tracking the general ledger accounts.”

Acknowledging the efforts made by the private sector to ensure their filings were accurate and compliant, Mr Bowe told Tribune Business: “I don’t expect it to be 100 per cent accurate.

“I’m expecting that it will be materially correct, and there will be ‘catch up’ by the May and June filings, when all businesses get a handle on it.

“I don’t expect huge discrepancies between businesses and the VAT Department,” the Tax Coalition chair added of the imminent January filings. “It’s going to be more logistics and how smooth the process will be.

“The proof will be in the pudding this week and up until March 2. By and large I expect materially correct filings.”

One key indicator to assess is the electronic interface between the Government and private sector, and whether this operates as smoothly as advertised when it comes to the submission of electronic VAT returns and payments.

Mr Bowe, meanwhile, said VAT filing accuracy was likely to prove more challenging for companies with annual turnovers between $400,000 and $5 million.

They are due to file their first returns by end-April, and he explained: “The quarterly filers will be the ones where greater attention has to be paid.

“Some may not have elaborate systems, full-time accountants. Based on those facts, these are the guys that will have more anxiety about filings, but they have more time to do so, because their first filings are not until the end of April.”