THE Government is examining how to adjust a Business Licence fee that the Deputy Prime Minister yesterday branded “inherently unfair” to firms with high turnover and low profit margins.
K Peter Turnquest, who is also minister of finance, described as “misinformation” any suggestion that the Government has committed to the European Union (EU) that it will introduce a corporate tax or income tax.
Speaking with Tribune Business outside the House of Assembly, Mr Turnquest said: “We recognise that the turnover tax or the Business Licence fees are inherently unfair to businesses that have a high turnover and low profit margin, and we are looking at ways of potentially adjusting that model so it’s more fair to all businesses, and so that we as a government do not contribute to losses by these entities.
“We are studying models in that regard to see how we can adjust without causing disruption and without creating even bigger bureaucracy.”
Despite a rate slash last year, the private sector has been advocating for a holistic approach to reforming the Business Licence fee structure, which is levied annually on gross turnover.
The Government reduced the maximum rate for Business Licences from 1.75 per cent of turnover to 1.5 per cent, while further reducing rates to 0.75 per cent for businesses involved in agriculture and fisheries production; food, meat and fruit processing; and independent fuel distributors in the Family Islands.
Meanwhile, with the EU having officially recommended that the Bahamas be removed from its ‘blacklist’, Mr Turnquest addressed queries over the commitments this nation has given.
“In terms of the criteria for the European Union, they have not asked us for - nor have we given them - any commitment to introducing a corporate or income tax. That is misinformation to suggest that we have been asked, or it’s been demanded of us to introduce any kind of income or corporate tax,” said Mr Turnquest.
“We are again hopeful that this entire process will come to an end in a substantive way on May 25, and we continue to work with our industry partners to ensure that we meet all of our requirements. We have submitted a working plan. We continue to work towards ensuring that we meet our commitments come December 2018.”