NASSAU, BAHAMAS — Businesses seeking to access the government’s tax deferral and tax credit assistance program must be in good standing with Value-Added Tax (VAT) or business license payments as at February 2020.
Guidelines released yesterday for eligible businesses read: “To be eligible, enterprises would be required to: Be in good standing in VAT or BL payments as at February 2020 (not including BL due for current 2020 cycle); have annual sales of $3 million or more (businesses under $3 million can access support through the Small Business Continuity Loan program); have a minimum of 25 employees; commit to retaining 80 percent of staff levels as at February 29 2020 levels, though to October, 31 2020.”
The concession is not available to businesses in the hotel & resorts retail or wholesale grocery food establishments; regulated telecommunications sector; regulated financial & insurance business and gaming.
If a company’s payroll cost is greater than $200,000 in any given month within the qualifying period, the approved tax relief provided will not exceed $200,000 for that month, to a maximum of $600,000 over the qualifying period. If the payroll cost is less than $200,000 per month within the qualifying period, the approved tax relief will be equivalent to the payroll cost.
It was noted that qualifying businesses will be allowed to apply the full amount of the approved tax relief firstly to the outstanding business license fees where applicable.
“Where the outstanding business license is greater than the ATR, fifty percent of the approved amount will be in the form of a non-reimbursable credit applied to the debt and the remaining fifty percent as a deferred tax that would be payable starting January, 2021.”
Qualifying businesses can also use the approve tax relief on business license fees owed regardless of the period in which the debt arose. They can also use any excess ATR after accounting for outstanding business license where applicable as a non-reimbursable or tax deferral credit in the VAT owed.
Also, where there is no business license fees outstanding, the full amount of the approve tax relief will be applied to the VAT outstanding balance.
Fifty percent can be in the form of a non-reimbursable credit applied and the remaining fifty percent as a deferred tax liability that would be payable starting January, 2021. Qualifying businesses can also use any unapplied remaining balance of the non-reimbursable credit, to offset any future VAT liability that may materialize in the qualifying period cumulatively.
Bahamas Chamber of Commerce and Employers Confederation chief executive Jeffrey Beckles told Eyewitness News that the business community has been waiting with ‘great anticipation’ for the details surrounding the government’s tax credit and tax deferral program according to Bahamas Chamber of Commerce and Employers Confederation (BCCEC) chief executive Jeffrey Beckles.
Last week, the government announced that in an effort to protect up to 10,000 jobs within the private sector it would introduce a payroll support initiative for qualifying businesses, as it will forego some $60 million in revenue over the next three months.
Under the program qualifying businesses can receive assistance under a tax credit and tax deferral to help cover payroll expenses. In order to qualify, a business must have a minimum of 25 employees.
Beckles said: “As of now that is the primary expectation. Many companies are still waiting for the unveiling of the details surrounding it. We think that it is an important component of the overall strategy to help businesses keep their doors open. We do now that work is still being done and we are very encouraged that the work continues and we do look forward to those details being unveiled shortly.”
“By in large the business community is holding out with great anticipation the unveiling of those details and embracing those opportunities because we worked and collaborated to ensure that no stone is left unturned with regard to how we keep our economy going under these very difficult circumstances.
Beckles said: “The BCCEC continues to work especially at a national level. We have representation on the National Advisory Council and we are doing everything to ensure the concerns of the business community are heard. These are challenging times and these times require all of our minds thinking creatively and thinking outside the box but more importantly working collaboratively.”