By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The Bahamas Chamber of Commerce and Employers Confederation (BCCEC) yesterday said it was optimistic that the Government will shortly announce changes to its Business Licence processes and “relieve the pressure” many companies have faced.
Edison Sumner, its chief executive, said the organisation was awaiting the Government’s approval of a press release on the issue, which he had hoped to issue last night.
The release was not received, but Mr Sumner told Tribune Business late yesterday afternoon that the Government had made amendments based on private sector recommendations, although he did not go into detail.
“There have been changes. We’re waiting for them [the Government] to approve a press release right now, which should be issued shortly,” he told this newspaper.
“We did meet with them, and we made some good first step progress with it.”
The Chamber’s position is that the Business Licence regime, as it currently stands, has imposed “onerous” costs and processes on companies if they are to comply with the Government’s requirements.
Its main concerns, and reform demands, are:
- That the Government increase the annual turnover threshold, above which companies must hire an accountant to certify their figures, from $100,000 to at least $400,000, and preferably $1 million.
For small and medium-sized businesses close to that $100,000 threshold, the cost of hiring an accountant to attest that turnover figures are accurate will exceed Business Licence fee payments to the Government
- The Chamber, and wider private sector, have argued that the end-January deadline for filing Business Licence returns is too tight and unrealistic, given that it gives companies just one month post year-end to get their accounts and paperwork in order.
The Chamber has led calls for the $100 penalty fee for late filings to be waived, and for this date to be pushed back to March 31. That is the same deadline for the submission of Business Licence fee payments.
“Most businesspeople felt that was very unrealistic for them,” Mr Sumner told Tribune Business yesterday of the January 31 deadline. “It proved a challenge as far as being able to meet that deadline, not only for small businesses but large ones as well.
“Many of those companies are dealing with getting their accounts for the prior month in order as they come into the year, so when you’re looking at having the financials certified in a month, it’s unrealistic.
“It takes most companies that time to produce the previous month’s financial reports, but I think we’ve made some good progress. Through some of these discussions we’ve had, we think some things will come to fruition imminently, relieving the pressure businesses have been in.”
Tribune Business previously reported how even companies with proper systems usually need two weeks to get their full year accounts in order, giving accountants just a fortnight in which to perform the necessary checks and certification prior to the January 31 deadline.
And the Chamber’s complaints were also echoed by The Bahamas Institute of Chartered Accountants (BICA, which warned the Government that its end-January deadline for Business Licence filing is “significantly challenging”, and threatens to “undermine” the quality of return certifications.
BICA, too, called for the filing/certification deadline to be extended by two months to end-March.
“The timelines for submission and certification of financial information, namely revenue/turnover, by January 31, 2016, is significantly challenging,” BICA warned the Christie administration in a January 27 letter.
“Most businesses utilise the initial weeks of January, followed by their financial year-end, to properly close their financial records, which includes ensuring that all material transactions and balances are recorded in the correct financial period.
“In order to focus attention on the proper closure of financial records, and then have certain financial information certified by the end of January, is not practical for most businesses.”
With companies likely unable to get their paperwork in order much before the filing deadline, this increases the pressure on Bahamian accountants, who have to certify that the turnover figures submitted by the roughly 6,000 businesses with annual revenue greater than $100,000 are accurate.
Calling for the filing deadline to be put back to March 31, BICA said “the vast majority of businesses take pride in complying with laws and regulations”, and did not want to breach them because of an impractical deadline.
“Further, if businesses are deemed to not be in compliance, this could impact other business approvals that are required to operate as normal,” BICA added.
“A prime example would be approvals from the Department of Customs to continue to clear goods if a Business Licence is not obtained by January 31, 2016.”
The Business Licence fee has long been a controversial tax for the private sector, as it is based on top-line turnover, not profits. It benefits low turnover, high profit margin companies, while penalising high turnover, low margin businesses such as food stores and gas stations.
And, in many cases, what companies pay in Business Licence fees to the Government often exceeds their annual profits.
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