By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A former Bahamas Chamber of Commerce president yesterday said his near-$4,000 ‘late payment fine’ paled into insignificance when set alongside the $20,000-$30,000 Value Added-Tax (VAT) refund his business has been owed for seven months.
Dionisio D’Aguilar told Tribune Business that he was “not pushing” for payment of that latter amount, or seeking a 10 per cent penalty payment from the Government with 9.5 per cent interest, but added: “What’s good for the goose is good for the gander.”
This newspaper revealed yesterday how Mr D’Aguilar and his Superwash business were hit with a near $4,000 fine for being five minutes late with their March VAT filing, after they exceeded their daily $100,000 bank wire transfer limit. This left them unable to meet the payment deadline.
The businessman yesterday used the significant VAT ‘refund’ sum owed to a subsidiary of the laundromat chain on a property purchase to support his case that the fines for late tax filings/payments are disproportionate, especially for minor and/or irregular offences.
“They owe me VAT from September last year, but I haven’t pushed them for it,” Mr D’Aguilar said of the Inland Revenue Department. “You don’t pay me for seven months, and then charge me $4,000 for being five minutes late.
“What’s good for the goose is good for the gander. I haven’t asked for 10 per cent plus interest. They have a refund for me of $20,000-$30,000, and I do not know if I have to claim it; I’ve just let it sit there.”
The refund would more than offset the penalty imposed on Superwash for the late VAT filing, and Mr D’Aguilar again argued that a ‘one size fits all’ fine equivalent to 10 per cent of the VAT or Business Licence fee due - plus 9.5 per cent interest on top - was draconian in many cases.
“There’s got to be a cap to that; it’s outrageous,” he said of the penalty’s size, noting that a further 10 per cent plus interest would be added if the fine remained unpaid by the following month.
“For being a date late, they shouldn’t impose a 10 per cent penalty that forces business to pay an extra $3,000, $5,000, $10,000.
“I realise they’ve got to have a penalty to incentivise people to pay on time,” continued Mr D’Aguilar, “and everyone is going to say ‘D’Aguilar can afford it’, but if you are compliant 99 per cent of the time, give a man a break
Reaction to the travails of Mr D’Aguilar and Superwash was mixed up to press time yesterday. Commentators on The Tribune’s website agreed that the Government lacked the moral authority to impose heavy fines, given the problems experienced by the private sector in experiencing timely VAT refunds.
Others, though, argued that they had little excuse for being five minutes late, given that the penalties - the amount and what would trigger them - had been known before VAT’s January 1, 2015, implementation.
They also suggested that Mr D’Aguilar had more than ample time to prepare for the March filing, and other businesses had been on time despite the inconvenience of payment date falling immediately after the Easter holidays.
The Superwash president responded: “Yes, but there are going to be days and situations that arise that make you a day late.
“I don’t think the Internal Revenue Service or any government tax agency in the world charges that kind of penalty. There should be more room for discretion.
“The Government aren’t going to budge, but there’s probably no harm in raising the issue.”
Comments
Honestman 7 years, 11 months ago
If government is going to play hard ball on VAT collections then it MUST get its own house in order and ensure that VAT refunds are dealt with on time. The likely problem is that you have a VAT office managed by fired up, over officious bureaucrats who are on a power trip. If government wants to be really efficient then why not impress the people (who voted them in remember!) by imposing similar fines for outstanding Property Taxes. Why the different treatment of two important tax revenue streams?
B_I_D___ 7 years, 11 months ago
We've had numerous VAT 'credit' months...they turn up as a credit on the VAT website and you just pay the balance the following month. Never had a single problem dealing with the VAT credits...in SIGNIFICANT amounts.
OMG 7 years, 11 months ago
Same as local banks when you give them a US cheque it takes (so they say) 30days to clear which we all know is absolute rubbish given communications today. Think of all the interest they make from your money floating in the ether. However don't pay your credit card on time and by magic the computer can penalize you instantly. LIke government, one rule for them and one rule for the public.
ohdrap4 7 years, 11 months ago
it is much better than 30 days, sometimes a week or so.
the credit card is annoying. i always make sure i pay well ahead of long holiday weekends.
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