By NATARIO McKENZIE
Tribune Business Reporter
nmckenzie@tribunemedia.net
THE Ministry of Finance's top official yesterday defended the new business licence regulations on the basis that too many companies' financial statements "do not stand up to scrutiny".
Marlon Johnson, pictured, the financial secretary, said this was the Government's rationale for requiring businesses earning up to $10m annually to produce a financial statement confirming their top-line turnover together with accompanying certified bank statements.
Mr Johnson's comments at the Bahamas Institute of Chartered Accountants (BICA) conference were met with strong push back from attendees, who described the bank accounts demand as an "invasion of privacy" and too onerous a demand for Bahamian small businesses. Some slammed the government over a lack of consultation on the regulations that were brought into effect on May 30.
To the latter charge, Mr Johnson pled guilty, saying: "I accept the critique that we didn't engage BICA earlier on that, as we ran with a whole lot of things during the last budget exercise. We have since engaged BICA through BICA's request, and have made a commitment to work with them to come up with a solution."
The amended Business Licence regulations have attracted heightened scrutiny as the 2019 payment deadline approaches. Companies with an annual turnover of $10m or more must provide audited financial statements that will confirm their prior year earnings.
But for those businesses earning between zero to $10m, the regulations stipulate that "a financial statement" confirming their turnover must be supplied to the Department of Inland Revenue (DIR). This, though, must also be accompanied by "a certified bank statement" covering each bank account held in the business's name and any other accounts "that are used in transactions" on its behalf.
Justifying the move, Mr Johnson told attendees: "Too often we have gotten submissions and are concerned by them. When we look behind the actual statements and do our spot audits, too often they do not stand up to scrutiny. What we have said is if there is a sign off by an accountant, what ought to be the recourse? That is a discussion we are having.
"In too many cases we could not accept those statements as credible. Where we are, and will discuss with BICA, is how do we address scenarios when we do get statements and they are found to be wanting in a material way. What should be the recourse?"
It was suggested to Mr Johnson that the Government should inform BICA, the industry's self-regulatory body, on which accountants are signing-off on questionable financial statements so that the necessary disciplinary action can be taken.
Philip Galanis, principal at HLB Galanis & CO, while commending the Government for its efforts in promoting transparency and accountability, raised concerns over the number of foreign consultants conducting audits in The Bahamas.
As for the Business License regulations, Mr Galanis warned the Government over unnecessary intrusion. "We are the one's who drive this economy, not the Government," he said.
"The economy is driven by the private sector. I ask the Government to be very cautious. For you to ask for bank statements, I think you need to take into account that banks statements don't tell the whole story."
But Mr Johnson told accountants: "We cannot continue the status quo." While acknowledging the concerns raised, he said: "We will not go back to the status quo where we create this expectation that a person can have a business and co-mingle funds, not have to prepare proper accounts and keep proper books."
Mr Johnson stressed that as The Bahamas continues to reform its taxation system it will be "imperative" that businesses keep proper books.
But the Bahamian private sector has slammed the Business Licence-related demands for their bank account details as "overkill", and asked: "When's it going to be easier to do business?"
Michael Maura, the Bahamas Chamber of Commerce and Employers Confederation's (BCCEC) chairman, told Tribune Business that the new business licence regulations had left many businesses "scratching their heads and wondering what's next" in terms of the "red tape" they must overcome.
Others went further in their criticism of the bank account information demands. Rick Lowe, an executive with the Nassau Institute think-tank, told Tribune Business: "That's [bank account details] none of their business. What is this? A police state?
"Come on. They just keep making it more and more difficult by piling on more regulations. If the odd person has committed an offence then punish them, but don't make everyone suffer for what they might perceive is happening. There's enough regulation already."
Gowon Bowe, BICA's president, previously told this newspaper that much of the information sought by the new Business Licence regulations "seems like overkill" given that the fee is based on just one item - a company's annual turnover or top-line revenue.
Comments
John 5 years, 5 months ago
I dare anyone to put a set of financials in front of Marlon Johnson and have them analyze them. Give him a bank statement and have him reconcile it. Clearly a political lackey who doesn’t know what the hell he’s doing. Except trying to invade the privacy of Bahamians and businesses for information he himself cannot interpret or has no use for. Will he skip town after next election and go back to St Kitts or is he no longer welcome there?
Well_mudda_take_sic 5 years, 5 months ago
Precisely! LMAO
proudloudandfnm 5 years, 5 months ago
Marlon needs to go back to the private sector. He just doesn't get it....
Well_mudda_take_sic 5 years, 5 months ago
Johnson doesn't have anything in that brain dead head of his with which he could ever get anything, especially when it comes to understanding anything of a financial nature! He knows even less about debits and credits than Minnis does, and that's saying a whole helluva lot! LMAO
hallmark 5 years, 5 months ago
LOLOLOLOL! Well listen who talking about financial statements not standing up to scrutiny!! The Bahamas Government???????
John 5 years, 5 months ago
Go back to the private sector? His flower shop closed down long time.
Well_mudda_take_sic 5 years, 5 months ago
The entire business community should be up in arms insisting that Minnis finally give this bozo his walking papers. God only knows how Minnis could have ever blessed this useless twit being appointed Financial Secretary!
SP 5 years, 5 months ago
Just for some measure of clarity, are we to understand that this same government that cannot tell us where the VAT money evaporated to, how many work permits they issued, how many illegal Haitians and others are employed all around them right under their noses, how much waste and corruption is in the PHA, education, BEC, water & sewage, RBPF, RBDF, registry, and cannot account for over 50% of Customs duties, want to put business's that are already stressed to the breaking point and barely hanging on for survival, under a microscope?
What "hands-on experience" and businesses have Marlon Johnson ever operated? Any jackass can wear a suit and tie, sip cocktails, point fingers, find fault, and pretend to actually "know" something!
"In the land of the blind, the man with one eye and poor vision is king"
bogart 5 years, 5 months ago
In all fairness to Mr. Johnson.he was..... hired...... by others .....to carry out a task. Yes he was a seasoned executive at Batelco and senior firm in Belize...??....Decisions of dis weight are not solely Johnsons....odderwise....we would joining that line of persons seeking help longside Shirley St...Nassau Street......Mackey St....outside the foodstores.....Village an Shirley....Salvation Army....Potters Cay....Churches Soup Kitchens....Da bank accounts hav too much questionable info for some. Many years ago he did have the terminity to dare open a Flour shop Bakery...a few buildings near a Centerville enterprize selling similar pastries and did have some of the most delectable pastries. In this present situation he of course is expected to try erry chance to get the mostest outta erryone...and of course tax dodgers exist in erry country......what is hilarious is the Head of da Chamber spoke 24 jours or so ago in the papers and shortly afterwards...it seemed to be too excessove...and 24 hours later....Johnson...talking shoddy accounting..........meanwhile the pore people from Pinewood Gardens taliing flooding when it rains amd drcades later det still talking flooding....
bcitizen 5 years, 5 months ago
Every MP, Minister, PS, and all upper level government workers should have to submit 12 months worth of their personal banks statements to the general public for examination. This is shameful. Every companies private information all over the place for the whole country to see. What kind of privacy protection are they offering? What the hell can you gleam from a bank statement anyway? Check # 11567 for 300 dollars. Deposit for 2,406 dollars. Are they gonna think deposits to a payroll checking account from a operating account are income? It tells nothing. Who the hell is the government to tell me how to run my business? If l want to operate out of a tin can that is my business not theirs as long as my taxes are paid.
professionalbahamian 5 years, 5 months ago
Simple- some of the bigger companies need to band together and take the government to court for invasion of privacy! Imagine how confidential that information will be sitting on a desk in the tax office! Absolute crap! Improve laws to go after those who have questionable declarations. A simple system of investigation, requests for clarification, fines, etc. I know people who won't be opening offices here as a result and others that will close - This is Not a police state people!
bogart 5 years, 5 months ago
MOST OF THE GUBBERMINT AUDIT VAT COLLECTION TEAM MAY SEEM.. TO BE..... FORMER BANKERS.........many Bank account managers have experiemce in dealing wid Commercial Business Checking account Activities.....dey monitor the business accojnts.....watch...instant...computer activity....as Businesses cheques ...fluctuate account activity....monitor Overdraft activity....loan amounts...gives the approval....to persons who call in cheques...whether to bounce it....ENCROACHMENT..on limits set....valuation of collateral security...within safe limit.....to protect bank.....these Officials IN BANK..MAY HAVE seen..business cheques made out to erry other conceivable purpose...hehhehheh..!!!...At end day checks prepared to go to da Clearing house...where dey may be scanned copied...back up record...plenty people sees dem.....Clearing Banks ....den settle amounts wid each odder banks......hehheh.....plenty people gets opportunity to see ya checks ....payee gets cheque SHOW IT AROUND...goes to anodder bank....dat teller sees it....supervisor sees it...clearkng people sees it copy scann person sees it...bank ...on...on..on...dese da same people May...may not now working fer gubbermint..noone knows......NOW...IN AN IMPARTIAL JURY....if dey have prior knowkedge....dey cant be employed to judge....IF da Tax people sees credit card payment for da sweetheart hotel stay...or fraud...do dey tells ....who....da shareholders....
truetruebahamian 5 years, 5 months ago
I closed my business bank account years ago and run everything quite satisfactorily out of pocket. It works better that way. cash where needed, certified cheques where needed. There is no reason to go back to an unsatisfactory method of payment and receipt. My books are quite accurate and up to date. The need for banks in this case is proven unnecessary. What about areas where banks have pulled out and business is run by this same traditional method. Opening a bank account is an unnecessary pain and only adds to the costs of already expensive enterprise.
DWW 5 years, 5 months ago
When all mps have disclosed their financials, including those who have been voted out over the past 20 years have all provided disclosures to the public, then come back to the private sector for more BS paperwork. Talk about shoddy accounting, call it what it is if they man enough.
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