The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Department of Inland Revenue (DIR) yesterday asserted that just 1.3 percent, or 502 out of an estimated 38,000 Family Island vacation rental properties, are registered with it.

Dexter Fernander, the tax authority’s operations manager, emphasised to the Bahama Out Island Promotion Board’s annual meeting the need for much greater tax compliance from short-term rental operators. He added that recent research revealed that there are 38,000 short-term rentals in the Out Islands, but only 502 have registered.

Of this number, Mr Fernander said 55 percent are foreign-owned and registered as vacant lots. “The Ministry of Tourism and the Department of Inland Revenue engaged a company called Avenue for some research on the whole of The Bahamas,” said Mr Fernander.

“There are 38,000 in the Family Islands with short-term rentals. Out of those 38,000, only 502 are registered. Fifty-five percent belong to non-Bahamians who are registered with the Department of Inland Revenue as vacant land.”

Mr Fernander noted that Immigration officers should ensure visitors provide proof of where they will reside during their stay. He added that the Department of Inland Revenue (DIR) is not trying to close unregulated businesses but ensure they comply.

“If there’s somebody coming and saying they have a short-term rental at the airport, they should show proof of where they are staying. So there has to be someone on the island who is cleaning those rooms for those short-term rentals. We’re not trying to stop the business, but we are trying to regulate the business and ensure that they are in compliance with government rules,” he said.

Mr Fernander said that, going forward, the Government will be more actively enforcing the Business License and tax compliance requirements for short-term rental operators. This includes requiring them to register, obtain the proper licences, and report their revenues accurately.

He said it is important to protect consumers and ensure a level playing field for all tourism businesses, as unregistered short-term rentals can undercut licensed hotels and other accommodations, and he called for the community to report unlicensed operators.

“There’s someone cleaning the place. There’s someone leaving the car at the airport and there’s someone offering the private food,” said Mr Fernander.

“The only way the Department gets involved is when the tourist gets information when they reach to the island and there’s a cancellation of their booking, and they want to know who to sue. The representative or the property owner is not registered in The Bahamas. The property owner is based in Florida, so there is a need for a Business Licence for the taxable activity and property managing needs a Business Licence.

“The VAT Act says if you are a non-Bahamian in short-term rentals you must become a VAT-registered business.”