By NEIL HARTNELL
Tribune Business Editor
THE Bahamian insurance industry yesterday said it was seeking urgent “closure” on its outstanding VAT refunds to ensure it is “on the same page” with government prior to hurricane season. Emmanuel Komolafe, the Bahamas Insurance Association’s (BIA) chairman, told Tribune Business that the Deputy Prime Minister had yesterday agreed to meet with the sector in a bid to resolve the property and casualty industry’s “biggest issue”.
Pledging that the industry will “take up” K P Turnquest’s offer of a meeting with himself and acting financial secretary, Marlon Johnson, the BIA chairman said it wanted the disputed multi-million dollar sum to be resolved before it received any more disaster-related claims.
“On the general insurance side, this is the biggest issue coming into 2018,” Mr Komolafe told Tribune Business. “There’s been a lot of questions; questions coming in regarding this.
“We will be taking the Deputy Prime Minister up on his offer. We had a good initial meeting with him, but it’s such a significant issue for the industry - the general insurance sector - that it warrants another meeting on the issues we face.
“In another four to five months we’re going into a new hurricane season, so it’s important we get not only clarity but closure on this issue facing the general insurance industry.”
Anton Saunders, RoyalStar Assurance’s managing director, told Tribune Business recently that the insurance industry was “too important to the Bahamian economy” to allow a $30 million unpaid VAT refund to remain outstanding for over a year.
This, he indicated, was impacting the cash flow of Bahamas-based property and casualty underwriters, as well as their balance sheets and solvency calculations.
But Mr Turnquest, in response, said the Ministry of Finance was challenging some of the refund claims and sums said to be owed.
“We have addressed the issue of VAT refunds with the insurance industry,” he told Tribune Business then, “and explained to them our rationale, and how we derived our position.
“We believe we are in accord with the VAT legislation, and to the extent they still have a discrepancy there is an appeals process they can avail themselves of.”
Mr Turnquest added: “We believe that our position is supported by the law. Again, there are varying cases, so there are some that are owed legitimate refunds that we can support, and others we have questions about.
“They [the insurers] are fully aware of our position, and it’s a matter of them lodging any objections they may have so it can be dealt with appropriately.”
Mr Komolafe said coming to an agreement on the collective amount owed to the Bahamian insurance industry in VAT refunds was one of the issues that had be settled with the Government.
Describing the Deputy Prime Minister’s response to the BIA’s meeting call as “positive”, he added that it was “extremely important” that the matter be resolved swiftly.
“It goes beyond the hurricane season, even though it’s important,” Mr Komolafe told Tribune Business. “Dealing with VAT and the administration of VAT, we want clarity so that in the adjudication of claims - God forbid we have another event - the Government and ourselves are on the same page.
“It’s important to we don’t have this uncertainty hanging over the industry. It’s assuming a level of urgency now heading into 2018.”
In a statement, the BIA said its latest meeting request was “a last resort” to address VAT-related matters that the Ministry of Finance and Department of Inland Revenue had not given “a definitive formal response” on over the past two years.
“We have also established a special committee to give specific focus and attention to this topic until it is resolved,” Mr Komolafe said.
The BIA added that it wanted “to come to terms on a consistent and standardised approach to the treatment of VAT payments and refunds across the general insurance sector going forward”.