By Neil Hartnell
Tribune Business Editor
nhartnell@tribunemedia.net
A Cabinet minister yesterday reiterated calls for web shop hold-outs to “stop hiding behind the lawyers” and pay millions in taxes due under the industry’s settlement with the government.
Dionisio D’Aguilar, minister of tourism and aviation, who has responsibility for gaming, told Tribune Business that the failure to-date of four web shop chains to comply with that deal was an “annoying distraction” that all sides needed to put behind them.
Expressing frustration over the “constant haggling”, Mr D’Aguilar argued that it was “unrealistic” for Island Game, Paradise Game, Asure Win and the FML Group of Companies to take the position that no retroactive taxes were owed for the 2018-2019 fiscal year’s first half.
Pointing out that all other Bahamian businesses and individuals were paying taxes, he urged them to “step up to the plate” rather than “hide behind legal technicalities”.
However, Mr D’Aguilar confirmed that the quartet collectively account for just 24 percent - less than one-quarter - of the industry’s total tax bill. The biggest payers, Sebas Bastian’s Island Luck and Ultra Games, together with the Chances chain, generate some 76 percent of the sector’s tax burden and are all currently compliant with the settlement terms.
Mr D’Aguilar spoke out as Carl Bethel QC, the attorney general, said the Government had received a letter on the matter from Wayne Munroe QC, representing all of the web shop hold-outs bar FML, late last week.
Disclosing that he would meet Mr Munroe later this week for further talks on a negotiated settlement, Mr Bethel borrowed a quote attributed to the late UK wartime prime minister, Sir Winston Churchill, that “jaw-jaw is always better than to war-war”.
Both himself and Mr D’Aguilar expressed a preference to resolve the dispute amicably, rather than through costly and time-consuming litigation. Neither would be drawn on when the Government’s patience would run out, although the gaming minister agreed that refusing to renew the quartet’s licences over the tax non-payment was “always the stick in the bag of tricks the Government has”.
“We would always like to have an amicable solution rather than go that route,” Mr D’Aguilar told Tribune Business. “My position is that it is unrealistic for them [the hold-outs][ to think they should not be paying any taxes. Everyone else is paying a tax, and I think it’s their duty to pay a tax.
“Every single individual and business is paying a tax, and they need to pay a tax as well. They should step up to the plate and do that.”
Under the mid-February settlement agreement, so-called “back taxes” for the first half of the 2018-2019 fiscal year - from July 1-December 31, 2018 - were to be levied at the old web shop taxation rate of 11 percent of gaming revenues. This was replaced by the new “sliding scale” operator tax, and its new rates of 15 percent and 17 percent, with effect from January 1, 2019.
However, Mr Munroe’s clients and FML have yet to comply with these terms some three months later. Tribune Business revealed last month that Paradise Games and Asure Win had paid taxes due for July 2018 and then stopped, while FML and Island Game had yet to pay anything at that point.
“It’s an annoying distraction I wish we could put behind is and move on rather than constantly haggling over this tax,” Mr D’Aguilar told Tribune Business. “It’s very frustrating, but it’s really in the hands of the lawyers. If you want to stay behind lawyers and litigate that’s your right, but it’s extremely tiresome.”
The minister declined to comment on when the Government’s patience will run out, and also refused to get into the legal positions the two sides are taking.
Tribune Business previously reported that Mr Munroe and his clients were basing their case on the fact that the old taxation structure, which required web shops to pay the greater of 11 percent of taxable revenue or 25 percent of earnings before interest, taxation, depreciation and amortisation (EBITDA), was repealed when the 2018-2019 Budget was passed at end-June 2018.
Mr Munroe told this newspaper in late December 2018 that, as a result of that repeal and the attorney general’s previous undertaking not to enforce the new regime after the industry took the matter before the Supreme Court, no taxes were due or owing by the sector for the first six months of the current fiscal year.
However, it is understood the Government believes it has a solid legal position to demand the payment of retroactive or ‘back’ taxes under the settlement agreement’s terms by virtue of the Interpretation and Clauses Act’s section 22.
This allows a repealed law, such as the old 11 percent taxation structure, to remain “in force” until the one replacing it takes full effect. “Where any written law repeals in whole or in part any other written law, and substitutes other provisions therefore, the repealed written law shall remain in force until the substituted provisions come into operation,” the Act states.
Mr Bethel, meanwhile, revealed that the Government received another letter on the dispute last week from Mr Munroe, who did not return Tribune Business phone calls and messages seeking comment yesterday.
“We got a note from Mr Wayne Munroe,” the attorney general revealed. “We haven’t had a chance to meet with him on it; later on this week we will have a meeting with him.”
Indicating a willingness to be patient, Mr Bethel added: “I guess another week or so is OK. One thing that is not good is to lose patience too quickly with people. It is what it is.
“We try to avoid the cost and expense and delays of litigation. It’s always better to jaw-jaw than to war-war. That was Churchill who said that, not me.”
Using the old “operator” structure for the 2018-2019 first half will likely generate around $11-$12m for the Treasury based on previous full-year collections of $21m. Given that 76 percent of taxes are generated by the three web shops that are compliant, this suggests that the sum being disputed by the hold-outs is around $5m plus taxes due under the new structure from January 1, 2019.
Comments
Sickened 5 years, 4 months ago
As soon as these four holdouts pay their tax you need to slap them across their faces (while saying 'try that again') and then cancel their licenses - for being greedy, nasty pieces of excrement!
Well_mudda_take_sic 5 years, 4 months ago
And that pales in comparison to what they should do to that slime ball of a thug Sebas Bastian.
TalRussell 5 years, 4 months ago
Comrade Dionisio James appears as a song and dance Imperialist red shirts as he comes across to populace as nothing but a bad beggar actor trembling in he washman's boots with hat in hand before Numbers Man's, please Mr Numbers Man's, can you spare few millions dollars PeoplesPublicPurse, yes, no has good rings it so I thinks I'm about bake some fresh Brownies to pen song lyrics to. "Please Mr Numbers Man's, Can You Spare Few Millions Dollars PeoplesPublicPurse."
birdiestrachan 5 years, 4 months ago
Are commercial washing machines still duty ??
Well_mudda_take_sic 5 years, 4 months ago
No, now duty free thanks to the corruptness of D'Aguilar!
bogart 5 years, 4 months ago
Isnt it obvious dat erry elected legislator will support anyting or against anyting in order to benefit....plane parts dutyfree.....dont want extra doctors....dont want competition foreign lawyers....
DonAnthony 5 years, 4 months ago
I know a business that was slapped with a $4500 fine for being 3 days late paying business license fees. How can these people get away with this crap? Slap a huge fine for each day they are late and if they refuse invalidate their license and shut them down. I would like to know who they are paying off in campaign contributions to still be operating without paying taxes.
Well_mudda_take_sic 5 years, 4 months ago
Minnis and his cabinet don't run the country. Symonette and his Lyford Cay boys, and that thug Sebas Bastian, are calling all the shots and getting filthy rich in doing so. LMAO
birdiestrachan 5 years, 4 months ago
The Master has spoken and the coloured folks should just say "Yes Master" after all he is annoyed. This man speaks down to Bahamians
screwedbahamian 5 years, 4 months ago
You can't be SERIOUS!!!! Please, someone give the members of our " Peoples time?????" Government a copy of this news paper because this stuff just cannot be made up. Really, who placed these KEYSTONE JOKEY POLITICIANS in government, The Bahamian people or the handful of NATION TERMITES webshop numbers boys. Seem that the answer is " Elementary my dear Watson"
BMW 5 years, 4 months ago
WTF stop talking and move to arrest and close them down. These criminals are allowed to piss in the face of law but a small business has to bend over backwards to do business. I CALL BULLSHIT ON THIS>
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