The Government yesterday unveiled plans to shrink the Value-Added Tax (VAT) payment window by seven days, and other revenue enforcement measures, amid the numerous tariff rate cuts consistent with a pre-election Budget.

Prime Minister Perry Christie, in unveiling the 2016-2017 Budget, revealed that the Government wants to reduce the time allowed for VAT payments from 28 days to 21 days.

The change, which is scheduled to take effect from January 1, 2017, would cut a whole week off the time that the 6,000-plus VAT-registrant businesses currently enjoy to submit due taxes to the Government.

That is likely to increase the compliance pressure on small and medium-sized registrants, in particular, who may already be grappling with the administrative costs involved, and lack the accounting systems necessary for rapid filing/submission.

“We are proposing measures to enhance compliance and reduce the potential for fraud at Customs, which will have minimal impact on businesses that are fully compliant,” the Prime Minister added yesterday.

These initiatives include increasing the Customs storage charge for vehicles from $30 per week to $50, although the bulk are targeted at the shipping industry and importers.

In particular, shippers/importers who fail to provide the cargo manifest and loading list “at least 12 hours” before the ship or plane lands in the Bahamas will be hit with a $2,500 fee - up from the current across-the-board $75.

A fee equivalent to 25 per cent of the imported good’s value will be levied on the parcel list used by cargo ships, while a $5,000 per goof charge will be levied on shippers “if prohibited or restricted goods are found on board their vessels”.

A licensing regime will be introduced for cargo couriers, while the electronic submission of Customs entries will be mandatory come July 1 this year. Some 90 per cent of entries are already submitted in this manner.

“As well, we are introducing measures to improve the administration of, and compliance with, our major taxes,” Mr Christie added.

“Namely, we are proposing to adjust the requirement of the Tax Compliance Certificate to cover major shareholders with over 20 per cent of the shares, as well as companies with similar shareholders.”

He said the Government would also “increase the enforcement provisions under the Excise Stamp (Tobacco Products) Control Act to allow for the compounding of penalties, and for Customs officers to better monitor tobacco manufacturing”.

Other reforms include amending the Stamp Act and VAT rules for real estate to better define ‘transaction value’ as the sum a property would “fetch on the open market in a sale”.

“In the event of a dispute [on value for tax purposes], then the Treasurer should be able to use the transaction value of an adjoining property, which has been sold in the last year,” the Government’s Budget notes said.

“In the case of a forced sale (foreclosure or court ordered sales), the value derived from the sale would be accepted. For a transaction between related parties, the transaction would be determined by an independent assessment of value by a licenced appraiser.”

Among the so-called ‘carrots’, Mr Christie said the Government would “provide a full amnesty on the surcharge which is now applied for late Stamping of conveyances and other documents for 90 days, and the application of a fixed penalty of 10 per cent of the applicable Stamp duty thereafter”.

Stamp Tax payable on marina slips is being reduced from 10 per cent to 2.5 per cent to bring it into line with the rate for real estate conveyancings.

The City of Nassau Revitalization Act and Family Island Development Encouragement Act are being extended for another year to June 30, 2017;

And Customs duty exemptions and real property tax concessions will be extended to owners of derelict buildings in New Providence who intend to demolish and/or renovate these buildings for commercial, educational or social purposes

The real property tax concessions granted to residential properties in 2015 are now being extended to commercial properties, with the exception of those subject to collection.

Mr Christie said the Government would also “expand the tariff concessions available to light manufacturing by allowing items not on the approved list to be granted full duty exemption on approval of the Minister”.

The Government has also pledged to create a framework for the Minister of Finance “to take steps through the Tariff Act to protect Bahamian agriculture and manufactured products”, the Prime Minister added.