By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The first-ever Value-Added Tax (VAT) returns have given the Government “a lot of comfort” that it will generate the forecast $300 million in annual revenues, Tribune Business has been told.

John Rolle, the acting VAT Comptroller, told Tribune Business that the tax had got off to “a great start overall”, amid suggestions there was now “near full compliance” among monthly filers with their January returns.

While not disclosing any figures for VAT revenues realised in January, Mr Rolle said the first-ever returns had passed “without incident” in terms of companies being able to connect with the Government system and submit due payments.

The acting VAT Comptroller also did not reveal any compliance statistics for the expected 550 monthly VAT filers, despite being pressed by Tribune Business to do so.

He confirmed that some registrants had missed the March 2 deadline, while “no more than a dozen” had sought extra time to complete their returns and submit the due payments.

“The most important thing was to get the confidence in the system being able to receive the reports [returns] without incident. That has happened,” Mr Rolle told Tribune Business.

“Businesses who were filing followed through on submitting payments. We see very strong compliance in terms of paying over to the Government the amounts assessed.

“We’re doing follow-ups with businesses in terms of giving pointers, giving assistance in terms of completing reports. Nothing, again, that’s serious in that regard,” Mr Rolle added. “We think it’s a great start overall.

“The filings went without any major incident. A couple of businesses requested a few extra days to complete their returns; not a lot of them. I don’t think it’s even a dozen. “Some have missed the deadline, and a small few have requested extensions.”

The Government’s 2014-2015 Budget projections forecast that VAT will generate $150 million in revenues for the six months to end-June, and $300 million for the 2015-2016 full-year.

Mr Rolle said that while the total VAT take for January was still being assessed, it had reaffirmed the Ministry of Finance’s confidence in the accuracy of its forecasts.

“The numbers are still being tallied, but while I can’t say the amount, the returns do give us a lot of comfort against what was expected,” the acting VAT Comptroller told Tribune Business.

The anticipated 550 monthly filers only account for about 9.2 per cent of the total 6,000 VAT registrants. Yet because they are the Bahamas’ largest businesses, with annual turnovers exceeding $5 million, the Government is forecasting that they will collect between 50-80 per cent of total VAT revenues.

Mr Rolle explained that the Ministry of Finance would have even greater certainty over its VAT revenue estimates come April 28, for this is when the majority of its registrants - companies with annual turnovers between $400,000 to $5 million - must file.

“We don’t want to generalise too much for January, as business returns vary from month to month, but we are confident it [April] will give us comfort for our projections for the year.”

High VAT compliance is vital to ensuring the Government hits both its revenue and wider fiscal targets, plus fostering private sector confidence in the new tax’s fairness, transparency and efficiency.

Concurring, Mr Rolle said the Government had “no desire” to alter other parts of its tax system if VAT failed to deliver the promised returns. And he suggested that VAT’s success would allow the Christie administration to reduce the burden elsewhere in its revenue base.

“It’s very important,” he told Tribune Business of compliance. “It will trickle into the revenue collection. There is no desire to revisit this tax, and the taking of alternative measures to make up for what VAT was supposed to deliver.

“Compliance is important in terms of delivering on VAT revenues, as this will give the Government the flexibility to see what positive reforms they can do elsewhere in the tax base.”

Mr Rolle said high compliance rates would also free up the VAT Unit’s resources to focus on other areas associated with the tax.

Tribune Business revealed that a week before the March 2 deadline, less than 13 per cent - 70 - of expected filers had submitted their returns and associated payments.

This is likely to have improved significantly in the final seven days, given the tendency of many to wait until the last minute, but it is unclear to what extent.

Gowon Bowe, the Bahamas Chamber of Commerce and Employers Confederation’s chairman, told Tribune Business he had been informed, via information from the VAT Education Task Force and the New Zealand consultant, Don Brash, that about 75 per cent of monthly filers met the March 2 deadline.

However, he subsequently told this newspaper that the VAT Unit was still assessing the January returns for accuracy and completeness, and determining who may not have filed that was expected to.

Edison Sumner, the VAT Education Task Force’s co-chairman, told Tribune Business that the compliance rate among January return filers was “much greater than 50 per cent”.

“I think we were close to full compliance,” he said. “We’re near full compliance from all those who should have filed by that deadline.

“I know the numbers have increased or improved since the 27th. I’m advised that when the deadline expired, a significant number of businesses had complied.”

Mr Rolle told Tribune Business that while some late filers would receive penalties and warnings, the VAT Unit’s ‘light touch’ regulatory approach still prevailed.

“It’s not at the stage where it needs to be heavy handed,” he said. “We just need to sensitise businesses to the importance.”

Having completed the January filings, the same 550 registrants now have 26 days to finish the same thing for February.

One owner of a monthly filer, speaking on condition of anonymity, said he would prefer that the time allowed to submit returns and payments be extended to 45 days.

“It’s hard for me to do accounts in 30 days, let alone file a VAT return,” the owner said. “It’s tough.”