NASSAU, BAHAMAS: The Department of Inland Revenue plans to increase enforcement against delinquent real property taxpayers, including the use of its power of sale, as it moves to reduce outstanding tax arrears, Controller Shunda Strachan revealed.
Strachan said the department has recorded improved compliance among owner-occupied property owners but continues to face challenges collecting taxes owed on vacant land and commercial properties.
“Yes, we have seen better compliance, especially in the areas of owner-occupied property,” she said.
“We still think there is room for improvement in the categories of vacant land and commercial properties.”
Strachan said the department has spent considerable time working with property owners to settle their outstanding obligations but has not achieved the level of compliance it anticipated.
She warned that the government will consequently intensify its enforcement efforts.
“You will see us doing more in the area of, unfortunately, power of sale, because we think quite enough time has elapsed where we’ve been working with people, and we’re not necessarily seeing the type of results we expected to see by now,” Strachan said.
“So enforcement, unfortunately, will be increased.”
According to Strachan, approximately 15 properties have been sold since the department began exercising its power of sale to recover unpaid real property taxes.
The government has increasingly used power of sale as a collection tool against property owners with longstanding arrears. The process allows the government to sell properties to recover outstanding taxes after the required notices and procedures have been completed.
Strachan stressed that tax arrears remain a significant concern for the department despite improvements in overall revenue collections.
“This year, we really will be focusing on decreasing our arrears, which we still are quite concerned about,” she said.
“You will hear some more from us in the area of arrears collections very soon.”
The increased enforcement push comes as the Department of Inland Revenue prepares to collect more than half of the government’s projected revenue for the current fiscal year.
Strachan said the department performed well against its collection target during the previous fiscal year, collecting close to its approximately $1.8 billion revenue forecast.
“Our collections—we actually did very well last year,” she said.
“As I said, our budget was some $1.8 billion, and we collected just around that amount. Collections for us—we are actually doing well, but of course, there’s always room for improvement.”
The department’s revenue target has climbed to just over $2.3 billion for the current fiscal year, accounting for more than 52 percent of the government’s overall projected revenue.
That represents a significant increase from 2013, when the newly established Department of Inland Revenue had a revenue budget of $256 million, equivalent to approximately 17 percent of total government revenue.
The department is responsible for collecting several major revenue streams, including value-added tax, business licence fees, real property tax and VAT stamp tax.
Strachan said the department’s expansion has been accompanied by an increase in staffing, from fewer than 90 employees in 2013 to just over 330 employees currently.
“In 2013, the revenue budget for the Department of Inland Revenue was a mere $256 million, or 17 percent of the overall government’s revenue budget,” she said.
“This year, we are expected to bring in just over $2.3 billion, and we will be accounting for more than 52 percent of the government’s overall revenue.”
Strachan added: “From $256 million to $2.3 billion—I think the Department of Inland Revenue is doing an exceptional job. But, like I said, there’s room for improvement.”
