Published by Neil Hartnell, The Tribune News, January 30th, 2025
The Bahamian tax authorities yesterday said they are “ahead of the game” even though 39,000 firms - more than half of anticipated filers - have yet to submit Business Licence returns just 48 hours prior to deadline.
Dexter Fernander, the Department of Inland Revenue’s operations manager, told Tribune Business it was “trying to change the culture” where both companies and individuals typically “wait to the last minute” to submit due taxes and the associated paperwork as the annual January 31 cut-off to provide Business Licence returns looms large tomorrow.
Disclosing that some businesses with annual turnover exceeding $5m have yet to provide their audited financial statements for 2023, as is now required by law, he confirmed that these companies have now been given a “hard-stop” deadline of this Friday with financial sanctions and penalties set to be imposed if they miss it.
Mr Fernander, though, told this newspaper that the tax authorities were seeing a compliance “peak” in the Family Islands where 65 percent of anticipated Business Licence filers have already submitted their returns ahead of deadline - an improvement he attributed to better taxpayer education and the Department of Inland Revenue (DIR) coming to the businesses themselves.
And he asserted that businesses and entrepreneurs in industries deemed “low risk”, such as taxi drivers and straw vendors, are now seeing their Business Licences processed and issued within 24 hours provided they have no other outstanding taxes or raise any other concerns for the Department of Inland Revenue.
Dr Leo Rolle, the Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief executive, yesterday said it has thus far received minimal complaints and concerns from its members over this year’s Business Licence filings and the submission of VAT payments/returns for December by the January 21 deadline.
He added that the only issue that has arisen was a temporary inability to access the Department of Inland Revenue’s filing and payment portal, which the agency quickly corrected. “There haven’t been any major reports of any consequence as to the process so far,” Mr Rolle said.
“In that week when the portal was down, businesses would have reached out and we would have assisted those businesses, but that was few and far between; very sparingly..... We’ve heard one or two issues, but not a lot of our members have been reporting problems.
“A few businesses indicate that they have taken advantage of the Department of Inland Revenue pop-ups at Harbour Bay and the Mall [at Marathon] and have been able to resolve any issues there. We applaud The Department of Inland Revenue for providing those easy points of contact,” he added.
“We will continue to monitor developments as we progress through this renewal cycle and will reach out to the Department of Inland Revenue if and when our members report specific problems.” That contrasts sharply with what occurred 12 months ago when frustrated businesses spoke out repeatedly over the challenges they were having in complying with the Business Licence and VAT filing and payment deadlines.
Besides consistent difficulties in accessing the Department of Inland Revenue’s portal, which was frequently down or off-line last January due to insufficient bandwidth to accommodate user demand, companies also complained that the tax authority was either not responding to calls or messages or failing to provide the answers/information they were seeking in response to their queries.
However, Mr Fernander said the Business Licence filing process - which requires companies to submit both their actual and estimated turnover for 2024 and 2025, respectively, by January 31 - appears to be functioning more smoothly for both the tax authority and corporate Bahamas the second time around.
“We had a new system last year and the learning curve is much easier with the same process,” he added. “We haven’t done anything. Nothing has changed. We’ve placed more information content on how to do it on our website and sent it out on e-mail.”
Repeating previous Department of Inland Revenue (DIR) requests for all tax-registrant businesses to provide it with their current e-mail addresses, as it still has too many with the redundant Coralwave and Batlenet variety, Mr Fernander said around 39,000 - around 60 percent - of the anticipated total 65,000 Business Licence filers for 2025 had yet to submit their returns just two days before the deadline to do so.
“As of today, maybe 39,000 are still pending and the deadline is January 31,” he told Tribune Business. “We’re at the half-way mark.... Other than that [challenge with e-mail contacts] we are ahead of the game. Those low risk companies and entities, as they submit, if they are under $100,000 in annual turnover there is no reason to hold up on their licence as long as they don’t hit any of the high risk factors.”
Asked what counted as a ‘high risk’ factor, Mr Fernander said “there are a lot of things we go through on the back end” such as the “trends” in a particular applicant’s industry, the size of its workforce and cross-referencing the turnover figures presented for Business Licence purposes with other available data such as National Insurance Board (NIB) contributions.
Citing straw vendors and taxi drivers as examples of “low risk” industries, where their annual turnover is likely to be below the $100,000 threshold, he added: “Once they’ve submitted it, by 8.05pm that night the Business Licence is issued provided there are no other issues such as outstanding taxes.”
Backing Dr Rolle’s comments, Mr Fernander acknowledged that the Department of Inland Revenue’s online filing and payment portal had encountered “a challenge” earlier this month but this had been resolved. “There were some complaints that people were not able to get to the web page,” he added.
“We increased the bandwidth because we saw VAT filings, quarterly and monthly for December, and Business Licence filings were happening at the same time. We had met with the developer, Cloud Carib, and they have increased the space for everyone to file. Hopefully not everyone will wait until January 31. We’re trying to change the culture; why Bahamians wait until the last minute.”
Mr Fernander, though, confirmed that “a decision has been made” that Friday, January 31, is the final deadline for companies with $5m-plus in annual turnover to submit their audited financial statements for 2023. Failure to do so will result in the imposition of penalties.
Pointing out that extensions for their submission had been granted from March to June last year, then June to August, and August to November/December, he said: “We are now in another fiscal period. The decision has been made that, after January 31, you may get an extension but you will be faced with the necessary penalties. They will decide what the fixed penalties will be.”
Accountants with corporate clients in such a position are now racing to meet tomorrow’s deadline so that they avoid potentially severe penalties for being “significantly late”. One, speaking on condition of anonymity, said: “We have some clients in that position.”
However, Mr Fernander said the Family Islands were proving a bright spot for returns compliance. “We have a peak in the Family Islands,” he told Tribune Business. “We see 65 percent of them have submitted so far. We attribute it to doing a lot of Family Island promotions and the Department of Inland Revenue coming out to help individuals file their returns and get the message out to submit preliminary financials.
“Whether you are a VAT registrant or not, you should have a POS (point-of-sale) tracking monthly revenue. You should have at least January to November, and just recalculate what was submitted in December. Quick Books can give out sensible information. We are looking for individuals to submit preliminary financial statements until the audit or review is done.
“We have increased our staff. We are working shifts; evening reviews, weekends. We’ve been out at various malls. The Department of Inland Revenue is coming out, partnering with NIB in sometimes going to these locations. We see individuals calling us, like at the Straw Market, asking us to go down there on specific days so people in that area and industry can have a one-stop shop where they pay NIB, Business Licence and Straw Market fee.”
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