By NEIL HARTNELL
Tribune Business Editor
The Chamber’s chairman yesterday questioned whether the Government had “thought through the practical implications” of how its enhanced tax compliance measures would work.
Gowon Bowe told Tribune Business that proposals to narrow the Value-Added Tax (VAT) payment window to 21 days, and require businesses to supply a Tax Compliance Certificate (TCC) to obtain payment from the Government, were “not problematic in and of themselves”.
The key, he emphasised, was how these measures would operate in practice when implemented, and if they would ultimately end up adding to the compliance and administrative burden faced by honest Bahamian businesses.
The Government, in legislative amendments released with the 2016-2017 Budget, is proposing to shorten the ‘window’ for VAT registrants to pay the Public Treasury to 21 days from period end, down from 28 days.
This is due to take effect from January 1, 2017, and Mr Bowe said the key here was the specifics - and whether the Government expected to have complete and accurate returns filed in that timeframe, along with the associated paperwork.
“Payment within 21 days should be available because the funds are being collected on behalf of the Government,” the Chamber chairman added.
Distinguishing between paperwork and the submission of payment, Mr Bowe said the 21-day deadline should be for “provisional” VAT payment, with registrants given extra time to adjust the sum once they filed their returns.
“If it’s a situation of having to make provisional payment in 21 days, and final payment in 28 days, it’s a possible solution,” he told Tribune Business.
“We’re [the Chamber] still canvassing the business community. We acknowledge the Government wants to collect its revenue.”
Mr Bowe, though, said most of the 6,000-plus VAT registrants would likely require more than 21 days from period-end to complete all the ‘netting’ and other calculations required to work out the correct sum due to the Government.
And how the ‘21-day’ filing will impact VAT-related penalties, and how they are incurred, is another issue to be determined between the Government and private sector.
“The initiative is not a poor initiative,” Mr Bowe told Tribune Business. “We have six months to figure out the implementation, and clarify whether we’re talking about payment versus filing and administration.”
He added that the Government should also not be demanding more from the private sector than it was capable of itself, questioning how quickly it was able to turnaround its year-end and month’s end accounts.
As for the Tax Compliance Certificate (TCC) requirement, Mr Bowe questioned whether this was intended to shift the burden from the Government and its agencies to the private sector.
Companies now have to prove they are compliant with all their taxes by submitting a TCC prior to receiving payments on public sector contracts worth more than $10,000. With TCCs only valid for one month, businesses face having to prove their ‘good standing’ every month to receive payment.
Mr Bowe said much depended on how the TCC initiative operated in practice. If companies were able to obtain the certificate online in 24 hours, with little to no headache, it was unlikely to prove much of a burden.
Yet if they had to “stand in line, and talk to 10 different people on the phone”, the Chamber chief warned it would “really increase the level of administration and bureaucracy to where it slows business progress”.
“What is most important is to sit down and talk through the practical implications of these initiatives,” Mr Bowe told Tribune Business.
“What we want is an equitable tax system that provides value for money when the Government spends, and you can see the fruits of your labour.
“We have to be careful of imposing bureaucracy and administration that only further burdens the compliant members among us, as opposed to throwing the net to capture the non-compliant.”