The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government is hoping to collect 90 per cent of due tax payments electronically before the 2016-2017 fiscal year-end, a top official yesterday promising it was being “very aggressive” on spending controls.

Simon Wilson, the Ministry of Finance’s financial secretary, said the Government was seeking to largely eliminate cash payments from its revenue collection and administration efforts, in a bid to reduce costs, wastage and fraud/theft.

Addressing the Chamber of Commerce’s State of the Economy 2017 forum, Mr Wilson said businesses could no longer pay VAT and Business License fees “over-the-counter’, and were moving to obtain similar results on real property taxes.

He added that $10 million worth of real property taxes had been paid by credit card during the first month the facility was established at Royal Bank of Canada (RBC), with the bank “surprised” at how much was received.

Departure taxes and Customs duties are to be paid by direct deposit, and Mr Wilson said: “Hopefully, before the end of the fiscal year, we will see 90 per cent of taxes collected from the online portal.

“We want to remove cash from the equation completely. It’s difficult, but change that’s necessary. Most of the Government’s revenue has been collected by cash, and it’s very expensive and hard to manage.”

Many in the private sector would likely dispute Mr Wilson’s assertion that the Government is moving aggressively to control and rein in spending, given that fiscal deficits have persisted and the national debt has continued to rise, despite the $1 billion-plus collected in VAT.

Increased spending by the Government has been blamed for eroding the potential gains from VAT, but Mr Wilson detailed a series of ‘low hanging fruit’ measures that had already produced cost savings.

“We’ve been very aggressive on the expenditure side equally. We have some very significant wins,” he said.

Detailing the bureaucracy inside the Government, he said it had 15 different ways to pay someone, with eight copies of the same letter required when somebody was hired by the public sector. Moving a retiree from employee to pensioner took between three to six months.

Lamenting the absence of a government-wide integrated financial management system, Mr Wilson said the public sector was also “constrained to get the best price”, which meant that it did not always “get the best value” across numerous areas - from construction to technology - if the rules were followed explicitly.

The Government is currently working with the IDB to install a comprehensive financial management system, but Mr Wilson said this was a task that will take “the better part of five years” with no guarantee it would be done correctly.

He also pointed out that the Government had “not used its buying power”, with different ministries, departments and agencies purchasing items such as water and paper at different prices, even though they were sometimes in the same building.

Mr Wilson said an “eye opening exercise” had been the discovery that the Government was using 100 different mobile calling packages from the Bahamas Telecommunications Company (BTC).

“I discovered you were billing me for things I’d not used for 20-30 years,” Mr Wilson said. “We got significant savings from that. Why am I paying $1 million a year for cellular services? We had all these different [packages] consolidated and got significant savings from that.”

He added that the Government had also pushed to reduce its fuel and vehicle fleet costs, while its move to pay vendors by direct deposit had eliminated the potential for Business License fee avoidance via the cashing of cheques and change in trading name.

“Businesses have for years, because of government inefficiency, not made the investments required to keep up with a modern approach,” Mr Wilson said. “Businesses have accounts receivables with the Government going back five to seven years.”

The Financial Secretary said these sums were typically ‘discovered’ when companies had difficulty in obtaining Business Licenses and Tax Compliance Certificates (TCCs), and the Government often had no record of receiving such goods or services - having typically issued purchase orders at the end of the fiscal year.

“We have taken the stance that we settle those bills,and then don’t do business with you any more,” Mr Wilson said. “We settle those bills, and I take you from my vendor list.”

He added that when this was threatened, most businesses decided to withdraw their payment claims.