Businesses 'not screaming' over VAT refunds


Gowon Bowe


Tribune Business Editor


Businesses “have not been screaming like in the past” over delayed VAT refunds, it was argued yesterday, despite the opposition leader’s assertion that the government is not paying legitimate claims.

Gowon Bowe, former head of the Bahamas Chamber of Commerce and Bahamas Institute of Chartered Accountants (BICA), told Tribune Business that while this had periodically been a problem in the past it had “not bubbled up” at any recent meetings of the professional organisations he is involved with.

“To be perfectly honest it’s not a major issue that’s bubbled up that I’m aware of, and businesses have not been screaming like in the past,” he said. “I’m not aware of any delays in the refunds with the timeline of payments coming back.”

Mr Bowe spoke out after Phillip “Brave” Davis accused the government of failing to make timely VAT refund payments to businesses deserving of them, saying that three owed a collective $7m had approached him to complain about the matter.

Any undue delays in paying VAT refunds can cause the private sector significant cash flow and liquidity problems, potentially tying-up capital required to cover operational expenses and further investments.

While Tribune Business has periodically covered such problems when they have reared their head following VAT’s 2015 introduction, Mr Bowe said it had not been raised as an issue recently during meetings where he was involved.

“There continue to be disputes or challenges with various VAT filings because various nuances pop in terms of how things are interpreted,” he told Tribune Business. While the private sector has the ability to challenge the Department of Inland Revenue’s decision through the newly-constituted VAT Tribunal, Mr Bowe said he was unaware of how quickly these cases were being dealt with.

“I am aware of a number of matters that have been raised with the VAT Department that are going through the Tribunal process,” he added. “You have to pay your taxes before you can challenge.

“There may be concerns with delays at the Tribunal, and having cash tied up. If there are delays it’s not in the best interests of companies needing liquidity, but there is nothing that I am aware of that says delays there or delays in payment.”

K Peter Turnquest, deputy prime minister, also brushed off Mr Davis’ concerns, saying: “There’s nothing unusual. There are always going to be some delays in refunds due to the nature of the process and cutting the cheque... In the last couple of years we’ve been working very hard to improve the process.”

Mr Davis, who said he had been asked to intervene on behalf of aggrieved businesses, said: “I’ve had at least three people do so, and I’m told there are many, many more. If the Government is truly committed to transparency, they should publish the level of VAT refunds which are approved but not yet paid.

“As chairman of the Public Accounts Committee and leader of the opposition, I will be compiling a list of vendors for government or from state-owned enterprises, whether domestic or international, who are owed refunds for long periods and are facing financial hardships as a result.

“Through this communication, I am calling these vendors and VAT registrants to present their claims for payment of VAT or other tax refunds to me on a confidential basis and I will seek clarity from the prime minister on the settlement of these claims.

“I should add that I will also bring to the attention of those who independently review the fiscal state of this country – including the IMF, Moody’s and Standard and Poor’s – the magnitude and nature of these claims to ensure that the government properly accounts for these claims in its fiscal accounts.”


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