Bowe: Don’t reward delinquency
Financial secretary insists govt has been trying to collect arrears
NASSAU, BAHAMAS — A leading accountant cautioned against the possible “moral hazard” of effectively rewarding delinquent taxpayers through real property tax amnesty programs.
On Monday, Prime Minister Dr Hubert Minnis announced in Parliament that the government is providing Bahamian property owners with up to a 50 percent discount on real property tax arrears.
Gowon Bowe, chief executive officer of the Fidelity Group, told Eyewitness News: “There is moral hazard we have to be careful about creating and I have often heard persons say that if they run up bills or haven’t been paying, they are going to wait until a tax amnesty is put in place because sooner or later, the government is going to give some amnesty.”
Bowe further noted: “We have had similar amnesty periods multiple times in the past two decades and ultimately it is one that is somewhat contradictory in that it is rewarding delinquent payers by giving them a discount while there are persons paying on an annual basis and not receiving the same benefit.”
Minnis noted on Monday that for Bahamian property owners, the government will waive 50 percent of the total amount of unpaid arrears for more than 180 days on such property, including overdue tax and accumulated surcharges, where full payment of all amounts due and payable is made on or before May 31, 2021.
“For those who are unable to pay 50 percent, if they enter into a payment agreement with a 25 percent down payment on or before May 31, 2021, the government will waive the total accumulated surcharge payable on taxes assessed on such property that has remained unpaid for more than 180 days,” the prime minister said.
Acting Financial Secretary Marlon Johnson told Eyewitness News yesterday the decision to give delinquent payers a break was a government policy decision and directed inquiries to State Minister for Finance Kwasi Thompson.
Attempts to reach Thompson were unsuccessful yesterday.
Johnson, however, told Eyewitness News the Ministry of Finance has been keenly focused on tackling the real property tax arrears, which, according to a recent auditor general’s report, amounted to roughly $600 million as of 2018.
“Long before the auditor general’s report, this is something I have certainly been focused on,” said Johnson.
“I met with the team some time back to take a look at that. We have, through the revenue enhancement unit, engaged a call center for well over a year now that has been doing their desktop exercise and they have yielded quite a bit of revenue in so doing.
“We have been continuing our work with an outside collection agency. There are any number of matters going through the court system because the challenge is when someone doesn’t pay you, then go through the process of taking them to court and seizing the property. That, in any legal system, takes a while. There have been a number of cases going through the legal system.
“It isn’t that we accept the point that there is this delinquency and we haven’t tackled it. We have been tackling it systematically.
“With regards to the real property tax programme, there is an element where foreigners can get a discount off their surcharge if they pay within the time frame. The discount on the actual tax itself is limited to only Bahamians.”
