By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Courier companies were yesterday accused of “stealing” from the Public Treasury, with the Government’s top financial official revealing three had recently agreed to pay a collective $7 million in outstanding taxes.
Simon Wilson, the Ministry of Finance’s financial secretary, said the Department of Inland Revenue was now “targeting” 35 other Bahamas-based couriers, based on the results produced by its initial audits of sector participants.
While not naming any of the companies involved, he told the Chamber of Commerce’s State of the Economy 2017 forum that the three had “agreed to pay $7 million in back taxes”.
Mr Wilson said the payments were one example of the initial successes enjoyed by the Government in its crackdown on corporate tax cheats, and warned that it was set to get “even more aggressive” with delinquents and defaulters.
“It’s created some noise in the community,” he added of the Government’s enforcement/compliance offensive. “We’re going to be even more aggressive. There are businesses not paying their fair share.
“Many persons in the business community talk the talk, but when it comes to walking the walk, that’s where the challenge is.”
Mr Wilson said courier company clients were handing them funds to pay due Customs duties and Value-Added-Tax (VAT) on their imports, with “the expectation” this money would be passed on to the Public Treasury.
“That money is going to cars, lifestyles,” he said. “That money is not going to the Treasury. They were stealing the money, to be frank.”
Mr Wilson cited numerous examples of businesses that had been caught under-reporting, and evading, the payment of due taxes to the Government although none were named.
He highlighted an unnamed Bain Town-based liquor store, which had been reporting and paying Business Licence fees based on an annual $50,000 turnover, when it had been ordering around $8 million in supplies annually.
Mr Wilson said the Department of Inland Revenue had used its powers under the VAT Act to last year obtain from liquor wholesalers/suppliers their entire client list of stores they sold product to.
The Bain Town-based liquor store was at the top of one of these lists, and shown to be ordering $5.6 million worth of stock from just one distributor - a sum wildly at odds with its annual Business License filings. And $2.4 million worth of liquor was supplied by another distributor.
Mr Wilson said the store’s owner was “driving a $200,000 Mercedes”, and added that the Inland Revenue “knew we were correct” in its suspicions when his pastor visited to plead his case.
“He said he sits in the back of the church, always gives us what we want. Go easy on him; he made a little mistake,” Mr Wilson recalled of what the pastor said.
The Financial Secretary said post-clearance audits of businesses suspected to be inaccurately reporting on their VAT, Business License and/or Customs Duty filings were also producing results.
He added that one business had last week agreed to pay $800,000 in Customs duties, which had previously been evaded due to “under-reporting”.
The issues with courier companies are not surprising, as their clients were telling Tribune Business last year that the Inland Revenue was pursuing them for alleged outstanding taxes - taxes they thought the couriers had paid on their behalf.
And Charles Turner, the Customs Comptroller, last year told this newspaper that the agency had been experiencing “challenges” in keeping pace with the courier sector, and the surge in imports generated by Bahamians purchasing online.
He explained that the “tremendous volume increase”, caused by the shift to e-commerce and online ordering, had caused difficulties in ensuring due import duties were paid on every shipment.
Rather than the large, bulk shipments it has traditionally dealt with in the past, Mr Turner explained that the rapid growth of online retailing and the courier industry was forcing Customs to collect duties on much smaller packages.
Legislative changes accompanying the 2016-2017 Budget were intended to address this, requiring courier companies and freight forwarders to obtain customs broker licenses and give Customs “greater control” over the sector.
Comments
Economist 7 years, 2 months ago
"And Charles Turner, the Customs Comptroller, last year told this newspaper that the agency had been experiencing “challenges” in keeping pace with the courier sector, and the surge in imports generated by Bahamians purchasing online."
You mean that your management does not plan ahead and you were caught flat footed.
Zakary 7 years, 2 months ago
Look kids! These are the results of a lazy and slack Government.
John 7 years, 2 months ago
Just hope there are no sacred cows.! As this is what makes it more difficult for the tax complying citizens and businesses. And even for junior tax collectors when they see their bosses and supervisors cutting deals in front of their eyes and containers of goods being released and little or no duty being collected. It is true some stores are already adjusting their prices upward to account for additional taxes and others have downsized or have plans to close because they no longer have a competitive edge when they have to pay additional taxes.
ohdrap4 7 years, 2 months ago
LOL. Is his pastor a tax lawyer?
Also I would like to know who these couriers are to ensure that the duties I pay go to the govt.
sheeprunner12 7 years, 2 months ago
If the politicians would untie Simon Wilson's hands and tongue ............ he would clean up the financial mess of the Treasury & Budget in ONE year ............ Please let this man do his JOB
ThisIsOurs 7 years, 2 months ago
I think you'd be surprised who's "hands and tongue" are cutting deals and who's working "hand in hand" with the politicians.
Economist 7 years, 2 months ago
Yes, Mr. Wilson but go after the civil servants who, for whatever reason, turn a blind eye or don't collect the correct tax first. Don't make life impossible for business to operate.
Maybe you should spend more time in ares such as Bain Town. You might be surprised to find out ow much you can collect..
ThisIsOurs 7 years, 2 months ago
This is the same ministry that approved BAMSI, and the Granny panty Christmas decorations. Nobody will be surprised. Remember the Potters Cay project that jumped 9 million dollars? I wonder who submitted those contracts? Just watch the other pre-election contracts handed out while they look to squeeze those not in the circle
SP 7 years, 2 months ago
......... “He said he sits in the back of the church, always gives us what we want" ..........
Matthew 7:15 - Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves.
Pastors have always been purveyors of criminality and the worst kind prostitutes in society willingly turning a blind eye to corruption for the right price!
Our country is drowning in corruption with the full blessings of clergy in exchange for Crown land, money and all manner of shameless deviance.
ThisIsOurs 7 years, 2 months ago
"“That money is going to cars, lifestyles,” he said. “That money is not going to the Treasury. They were stealing the money, to be frank.”
"Wilson said the store’s owner was “driving a $200,000 Mercedes”, and added that the Inland Revenue “knew we were correct” in its suspicions when his pastor visited to plead his case."
It's funny how they can connect the dots with the "Bain Town" business but give the likes of suddenly rich Shane Gibson a handshake and the savvy businessman award.
banker 7 years, 2 months ago
Right on. Shame Gibson's family too!
Porcupine 7 years, 2 months ago
Can anyone honestly say it's not getting worse and worse? Is our country any better off since we started collecting more and more tax? Will it ever get any better, or is this the best it will be? Maybe that's why so many revert to prayer.
ThisIsOurs 7 years, 2 months ago
Not getting better. This is just a way for them to continue spending like drunken sailors. They collected a billion dollars in VAT with no significant decrease in customs duties and they blew ALL of it. They collected HALF the ENTIRE budget in revenue and ended up with a 300 million deficit. The problem isn't the amount of money they're getting in, the problem is the people approving the money going out
OMG 7 years, 2 months ago
You have to laugh when it is described as stealing from the government when all we see day after day is money squandered on futile projects, contracts given to political cronies. How about unsecured (large) loans to individuals by the BOB which is now deep in debt and our taxes go to keeping it on life support.
John 7 years, 2 months ago
Has any politician disclosed yin 5 years yet as required by law? It was common knowledge that the courier companies were not paying customs duties on much of the packages they were bringing in and a number of the owners became multi- millionaires overnight. It is also common knowledge that certain stores in this country bring hundreds if not thousands of containers annually and only pay pennies on the dollar of what is owed to customs. In many cases the businesses are owned by politicians or operated by their families. This makes it near impossible for legitimate businesses to operate and cover all their expenses, taxes included. You can bet that once Wilson touches one of these 'sacred cows ', he will be stripped of his powers, sent to some remote office to shuffle paper and be given a roll of duct tape to keep his mouth shut.
ThisIsOurs 7 years, 2 months ago
Nobody is stripping Wilson of anything. Remember he's right next to the minister approving contracts.
John 7 years, 2 months ago
This is nothing new in this country. The politicians pass laws they don't intend to abide by. So not only do they become filthy rich overnight but they prevent legitimate businesses from making a profit. They government becomes seeped in debt and so they go back to the parliament and pass laws to increase taxes even more. And every they do this they give themselves a greater advantage. That's how eight families in the world control as much wealth as all the rest of the population in the world combined.
sheeprunner12 7 years, 2 months ago
The Financial Secretary is a civil servant and a trained professional who is responsible for advising the Cabinet and individual Minister(s) of the best fiscal practices .......... but Cabinet has the final say on HOW the Budget allocations are spent .......... and the FS has to then play Houdini to clean up the financial mess of the crooked politicians ...... Wilson should be commended for his forthrightness (in the face of the PLP Mafia)
C2B 7 years, 2 months ago
So if the government settles with the other 35 for similar amounts, you get 81 Million collected. Since the average settlement is typically a fraction of what is actually owing; we can assume a $150-300MM theft.
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