FINANCIAL Secretary Simon Wilson.
By LEANDRA ROLLE
Tribune Staff Reporter
lrolle@tribunemedia.net
THE government’s top finance official says “hundreds of millions of dollars” is owed in VAT and other tax arrears — an estimate that does not even include the $800m owed in real property taxes.
Finance secretary Simon Wilson’s comments came as the government seeks to crack down on tax delinquents and businesses suspected of evading VAT and Business Licence fee payments.
Last week, the Department of Inland Revenue (DIR) conducted an island-wide sweep of Harbour Island companies, seizing assets of at least two businesses suspected of owing $1.3m in taxes.
Meanwhile, several courier companies have been temporarily barred from clearing imported shipments over their failure to pay up to “seven figures” in due taxes to the government.
“We’re not targeting businesses,” Mr Wilson told reporters yesterday. “We’re just going through a compliance strategy to ensure that we encourage businesses to be compliant. If you’re non-compliant, there are consequences of non-compliance.”
“The one thing we want from businesses is transparency in operations. I think they’ve started that process of being a little more transparent.”
Mr Wilson has said officials are planning several more operations throughout The Bahamas to recover outstanding taxes and will go after businesses that make false declarations.
“We have 50,000 businesses registered, alright, and about 40,000 of those businesses report turnover of less than $100,000 so they pay zero, so that’s all we know,” Mr Wilson said.
“That’s our universe and we work through that universe to determine instances of non-compliance. People don’t put a flag and say they’re non-compliant ya know. They try to be discreet in their non-compliance.”
Mr Wilson said about $800m in real property tax is owed.
“Most property taxes are owned by foreign-owned properties because you know Bahamians have a wide level exemption, so this is probably driven mostly by non-Bahamian-owned properties,” he said.
Asked yesterday about other potential penalties, Mr Wilson said he would like to see wage garnishments.
“Obviously with businesses, we tend to be more forthright with businesses in our discussions with them,” he added.
Last year, Mr Wilson revealed that the Revenue Enhancement Unit’s (REU) audits showed 50 per cent of registered companies were non-compliant with VAT laws.
“When you think of it from a statistical point of view, 50 per cent of persons audited were found to be non-compliant, which is a very, very high ratio,” he said.
“It is a cause for concern. When you think of that, one in every two businesses they’re going to for an audit have not filed or are charging VAT but not remitting the money to government, which shows a high level of non-compliance for that small sample size.
“If that cascades to the full population of VAT registrants, it shows the significance of the problem of non-compliance.”
Comments
Sickened 1 year ago
The scary thing is... if they do actually collect all of this we STILL won't see any improvements to infrastructure, health care, social services etc. Somehow this additional money will poof out of existence. Contracts will get bigger but yet the work will never be completed and the quality will be so poor that whatever is constructed or repaired will not be useable. The more money government gets the more money that disappears into the black hole of corruption.
becks 1 year ago
When it comes to Real Property Tax arrears they always try to pin the blame on foreigners. And without a doubt there will be some foreigners who are in arrears, it is statistics. But I am certain that a very large proportion are Bahamian property owners, especially commercial property owners. These will be many of the same persons who have traditionally been allowed to incur very, very large outstanding bills owing to BPL and Water&Sewerage. Much easier to pin the blame on “the others” than ones own.
The other big issue is that since the online RPT portal that was implemented in 2015 went down and finally disappeared in 2020 the existing dysfunctional and convoluted system for getting RPT bills, paying for them and getting the Tax Certificate has not made for an efficient or user-friendly ability to pay. This is a perfect example of the DIR and government being the authors of their own problem.
Bigrocks 1 year ago
Well, can he give us the number of non-compliant folks that are non-compliant because of posting errors at NIB and other agencies? Thought they were all on computers. Nobody know how to use them or are the computers so slow it takes years for them to update the data? Seems to me lots of folks are asleep at their government jobs even when they show up. Seems they know who everybody is but wait years to do again. A simple call from an agency could help a lot. But that is asking too much. And said here and many times, you cannot get them to answer their phones either. Even if you get things straight by going in by person, it still takes weeks and longer to get everything corrected. In the meantime, they block your imports. I guess after they bankrupt us all because of their foolish actions and being lazy, we can all go get "stay at home" checks.
Dawes 1 year ago
“Most property taxes are owned by foreign-owned properties because you know Bahamians have a wide level exemption, so this is probably driven mostly by non-Bahamian-owned properties,” he said.
So basically this is just a guess as he has no idea, but it sounds good to say it won't affect Bahamians .
DWW 1 year ago
is this a tail wag dog thing? am i missing something? The property tax role is, by law, supposed to be gazetted and published annually. Has that ever happened in the past 50 years? Why not simply name and shame the delinquents of property tax? seems a very simple exercise but then again the property tax office is such a mess that publishing would reveal clearly to the world how much of a dismal quagmire that office is in. I believe Mr. Wilson is underqualified for the position he holds which is why he makes these unfounded statements.
2nd point is that VAT registrants are tax collectors for the govt. A business is not paying but collecting VAT on behalf of the Bahamian people. Wilson said 'they aren't paying' when he should have said they are "not collecting". or does he mean to elaborate and state that they are collecting but not paying? which is in essence theft from the Bahamas Government and they should be prosecuted to the full extent of the law. but wait, do we have cronyism at work here? Will they got off with a slap on the wrist? such blatant in your face criminality happening all over the place in this country. they need to check into many other businesses, maybd hire that old secret shopper company to conduct due diligence throughout the Bahamas on VAT compliance?
Sickened 1 year ago
The problem is that every minister that gets appointed soon realizes that fixing this absolutely broken system is WAY too difficult, so they simply continue along trying to squeeze orange juice out of a sour lime. The ONLY success Government has had in the last 50 years is with the new process and technology for issuing passports.
themessenger 1 year ago
Mr. Wilson, how about you tell us when the hundreds of millions of dollars owed by the government to the peoples NIB Fund will be repaid? I paid yinna for fifty years but now its time for yinnas to pay me our money done spend and da well done dry.
moncurcool 1 year ago
Exactly. He needs to talk what government owes NIB.
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