The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government’s Revenue Enhancement Unit is already achieving “significant results”, the deputy prime minister said yesterday, voicing optimism it will “achieve our targets”.

Speaking ahead of a Cabinet meeting, K Peter Turnquest said: “We are up and running with our Revenue Enhancement Unit, and they are achieving significant results. We are anticipating that we will achieve our targets with respect to the initial objective of that unit.

“One of the things we encourage all residents to appreciate is if we are going to keep our taxes low, then all of us have to pay our fair share to ensure no one is paying any excessive or undue share. If we all do that then we can continue to keep taxes low and meet all of our commitments as a government.

“The whole idea behind the Revenue Enchantment Unit is to help us achieve the compliance rate in order to provide the Bahamian people with the services that they deserve.”

Marlon Johnson, the Ministry of Finance’s financial secretary, told Tribune Business in a May 2019 interview that the Revenue Enhancement Unit (REU) could reclaim up to $100m per annum from tax dodgers once it begins operations.

He argued that there were “substantial opportunities” to improve the government’s revenue intake by targeting fraud, tax evasion and avoidance, plus monies that slipped through cracks in the system due to inefficiencies and poor administration.

In particular, he said the Ministry of Finance felt there was still significant “under-reporting” of VAT and Customs and Excise Taxes. To counter the former, the REU will be charged with comparing VAT registrants’ returns with their annual business licence fee fillings, as gross revenues should be the same, and with returns submitted by similarly-sized peers in the same industry.

The failure to establish the Revenue Enhancement Unit, and make it operational in time for the 2018-2019 fiscal year, was one of the factors blamed by Mr Turnquest for the predicted $240m revenue shortfall faced by the Government. The unit was supposed to generate $80m of that figure.

The Minnis administration has been heavily criticised by its political opposition for disbanding, and failing to continue, with the Revenue Enhancement Unit that its PLP predecessor set-up to target the same tax and revenue streams following Hurricane Matthew in October 2016.

Moody’s, the international credit rating agency, revealed in a mid-summer 2017 report that the Christie administration’s unit had yielded some $90m in revenues during its first six months in existence, putting it on target to generate $180m in extra annual income for the Public Treasury.

Its successor, though, argued that the Christie administration had failed to provide the unit with any legal basis for its activities. It also argued that it was staffed by foreign accountants, with few to no Bahamians, and no training programme to enable them to take over.

The Revenue Enhancement Unit will focus on VAT, business license, customs duty and real property taxes, targeting higher-risk taxpaying firms and those who have significant discrepancies between payments of different tax types.