NASSAU, BAHAMAS — The Department of Inland Revenue is placing greater focus on verifying the gross turnover of businesses across the country, with its top official yesterday expressing serious doubt that only 9,000 of the nearly 50,000 registered businesses have an annual gross turnover of $100,000 or more.
Businesses with an annual gross turnover of $100,000 plus are required by law to be Value-Added tax (VAT) registrants.
Acting Controller of Inland Revenue Shunda Strachan during a press briefing at the Office of the Prime Minister yesterday noted that if the Department of Inland Revenue is able to verify the turnover of businesses it will be able to meet the government’s target of $124 million this year from businesses license fees.
She noted that up to this point, only $14 million in business license fees have been collected, with the lion’s share of the target amount expected in March. She noted that around $91 million was collected in business license fees for 2021/2022.
“The biggest challenge for inland revenue is turnover. Your turnover is everything that comes into the business before any deductions. What we find is most businesses don’t report true turnover and the challenge is verifying what the true turnover amount is,” said Strachan.
She added: “We had just just under 50,000 registered last year only 9,000 registered for VAT. More than 40,000 businesses said that they generated less than $100,000 a year. I don’t know about that. We’re going to have a dialogue with businesses when they submit their application.”
Strachan noted that based on amendments to the Business License Act last year the Department of Inland Revenue has reverted to having all businesses license expire on December 31.
Strachan also noted that the Department of Inland Revenue will be seeking information from business owners who have landlords in an effort to insure that the appropriate fees are being paid by commercial property owners. She noted that this will in no way impact the processing of the tenant’s business license application.
“We have the right to garnish the rent. If the tenant pays monthly we may go to the tenant and appoint them to pass the rent over to inland revenue,” said Strachan.
She also noted that the Inland Revenue Department now has the authority to exercise the power of sale overall properties other than owner-occupied Bahamian properties.
“That’s major. That’s one thing coming down the pipeline. We have several private collection companies engaged even overseas and we have seen them begin to make some headway. A lot of accounts have been outsourced to the private collection but unfortunately what that does is it adds an additional 40 percent to the tax bill,” said Strachan.