Wednesday, August 12, 2020
By NEIL HARTNELL
Tribune Business Editor
Some $19.5m in Inter-American Development Bank (IDB) funding has been reallocated to payroll support for Bahamian businesses amid COVID-19, the deputy prime minister confirmed last night.
K Peter Turnquest told Tribune Business that the multilateral lender had approved switching funds previously earmarked for improving Bahamian workforce skills to the government’s expanded tax credit and deferral initiative.
“We decided we don’t need to proceed with that at this time,” Mr Turnquest said of the skills initiative, “given all the other needs so we requested those funds be reallocated and the IDB agreed, so we repurposed the funds.”
The move was confirmed by the IDB, which said in an August 6, 2020, document that $19.513m was being switched “to finance the support to vulnerable populations through the tax credit and tax deferral employment retention programme in industries affected by the coronavirus”.
Mr Turnquest added that the initiative had been “well taken up” by the Bahamian private sector during its first three-month run to end-June and the close of the 2019-2020 fiscal year. “We believe it is having an impact in terms of helping to maintain some level of employment,” he said. “We will continue as long as we can. Right now we’ve extended it for a further three months.”
The government previously said the first round of the initiative saved 7,000 Bahamian jobs through providing businesses with $18m worth of COVID-19 relief via tax credits and deferrals.
The second phase, which the IDB funds will help finance, is being expanded to include all qualifying VAT registrants with a turnover of $100,000 or greater plus the hotel industry. The first phase was targeted only at firms with annual turnovers exceeding $3m and a minimum of 25 employees.
Qualifying businesses were able to withhold due VAT or outstanding business licence fees between April and June to enable them to meet payroll expenses. The tax deferrals and credits were split 50/50, meaning that the $9m worth of deferred tax payments in the first phase will have to be paid back by those companies in 2021 via a 12-month payment plan to be agreed with the government.
Companies that may have received assistance under phase one can also apply for further assistance in phase two. “It is important to note that tax relief approvals will be based on staff complement rather than the turnover of businesses as previously granted under phase one,” the Department of Inland Revenue said previously.
“Additionally, there are certain categories of businesses that will not be eligible to receive assistance under this programme, including: food stores and food wholesalers; pharmacies and related wholesalers; gaming houses; banks and financial entities; insurance companies and the regulated telecommunications sector.”
“We want to assist as many businesses as we possibly can to retain as many of their employees that they are able to and encourage them to apply online at (http://atlas.revenue.gov.bs),” said Gaynell Rolle, Inland Revenue’s acting controller.