• ‘Shaking the trees’: All islands to be targeted

• Business Licence filings key to spark probes

• Authorities targeting $4m Briland tax arrears

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The authorities are planning “several operations” throughout The Bahamas targeting other suspected tax delinquents, the Ministry of Finance’s top official revealed last night, while their Harbour Island sweep is still not finished.

Simon Wilson, the financial secretary, confirmed to Tribune Business that further raids and asset seizures are being readied by the Department of Inland Revenue, assisted by the police and other agencies, as a well-placed source - speaking on condition of anonymity - suggested the Government believes it can recover $4m in outstanding tax arrears from its Harbour Island crackdown alone.

While declining to confirm or provide numbers, Mr Wilson said the Ministry of Finance and Department of Inland Revenue are “shaking the trees a bit more” through a more aggressive enforcement approach against tax avoidance and evasion by companies over VAT and Business Licence fee payments.

Confirming that “quite a bit” of its investigation has been triggered by suspicious Business Licence filings, with some companies reporting turnover figures that are hugely inconsistent with their known level of commercial activity, he told this newspaper that the seizure of goods, corporate records and other assets was “not a step we take lightly” and is only undertaken following the necessary probe and obtaining of a court Order.

Asked whether last week’s Briland raids, which targeted Conch & Coconut and Andre’s Rentals, were intended to send a warning signal to other deadbeat taxpayers, Mr Wilson replied: “It will have a demonstrative effect, but the reality is that we have to do more. We have several operations planned, and this operation in Harbour Island is not completed yet.”

Confirming that other Briland businesses, who he did not name, have also caught the attention of the Department of Inland Revenue and its audit and compliance teams, the financial secretary added: “We’re shaking the trees a bit more with our investigation. As important as the revenue is, it’s more important to ensure these companies are operating according to the law and the National Investment Policy.”

Mr Wilson also confirmed that the crackdown will extend to suspected tax dodgers on other islands, including New Providence, and cover the length and breadth of The Bahamas as part of a drive to ensure all pay their fair share to the Public Treasury. He added, though, that the steps taken on Harbour Island resulted from a formal investigation process that ended with the tax authorities obtaining a court Order allowing them to seize the assets.

“It’s a process,” Mr Wilson explained. “Once we gather information and think we have probable cause we’ll take action. We have to get a court Order. We have to go to court under the legislation and present information in order to seize equipment, goods and records and so forth.”

The Department of Inland Revenue can employ its powers under both the VAT Act and Customs Management Act to obtain such seizure Orders, and the financial secretary said that “we’ll use both” according to the facts and circumstances of each particular case.

“We get intelligence, businesses and persons come in and tell us information on a business and then, based on intelligence, we do our own investigation and if the investigation identifies a problem we’ll go ahead. It’s a process. It’s not a step we take lightly. We have a process we go through,” Mr Wilson told Tribune Business.

Several companies have complained that the processing of Business Licence renewals this year was unduly delayed. However, Michael Halkitis, minister of economic affairs, said the Department of Inland Revenue and its officials have a duty to check all turnover figures submitted for accuracy, and ensure as best as possible they are consistent with the applicant’s known business activity, as means of preventing/catching firms under-declaring or reporting revenues.

Those able to get away with such practices are able to avoid/evade a portion of the due turnover-based Business Licence fee. Mr Wilson confirmed that the extra scrutiny applied to such filings this year had helped trigger several probes, saying: “Quite a bit of it is coming because of the Department of Inland Revenue filings. Then we get intelligence.”

Turning to last week’s Harbour Island sweep, he added: “In the case of the most recent one, we were getting reports for the last couple of months for certain operations that had us thinking something is amiss here; something is not correct here. We had intelligence to indicate something is not correct, and we have to take some extra steps.”

Mr Wilson confirmed that many of the assets seized from both businesses had been returned after Conch & Coconut and Andre’s Rentals subsequently approached the Department of Inland Revenue “in good faith” to resolve the allegedly outstanding tax arrears and pay them off.

“I think they have come in and started dialogue with us,” he said of both businesses, without naming them. “It’s process. The one thing we want from businesses is transparency in operations. I think they’ve started that process of being a little more transparent.

“They came in, had a discussion with us and are acting in good faith. We’re returned the assets. I think most of the assets have been returned. There’s no reason for us to hold them. It’s moving forward.” Tribune Business sources on Harbour Island, speaking on condition of anonymity, confirmed that Conch & Coconut still appeared to be operating having seen one of its tour boat excursions leave with passengers while its golf carts are still in use on the island.

Conch & Coconut, only founded in 2018, bills itself as Harbour Island’s “leading locally-owned and operated luxury concierge and experiential travel company”. Julian Shaquille Gibson, known as ‘Shaq’, its co-founder, and who is also a realtor with Corcoran CA Christie, denied that anything was amiss when questioned by Tribune Business last week about the tax authorities’ actions and asset seizures.

Briland contacts said he had subsequently been repeating the same message to others, suggesting that it was all a mistake or misunderstanding, and was in the process of being resolved. Internet research by this newspaper also linked Conch & Coconut to a Miami-based Cuban-American entrepreneur, Pablo Conde.

One posting from 2021 said he “currently runs....... Conch & Coconut”, while also referring to the “getaway” that is Eleuthera. And a Facebook page describes him as Conch & Coconut’s co-founder, and chief executive and co-founder of Pink Sands Spirits Company, the liquor brand that is being promoted on the former’s golf carts.

Asked whether The Bahamas might seek co-operation from the US federal tax authorities, such as the Internal Revenue Service (IRS), given Conch & Coconut’s US Florida connections, Mr Wilson replied to Tribune Business: “We are contemplating that.” Such co-operation is likely provided for in the various tax information exchange agreements that this nation has signed with Washington D.C.

Marc Tonis, proprietor of Andre’s Rentals, effectively confirmed that his golf carts had been confiscated when contacted by Tribune Business last Thursday. He said he was on a flight about to leave Nassau for Harbour Island, having met with his attorney, and voiced confidence that the situation will be resolved by Friday.

“Some stuff like that happened,” he said, when asked about the Department of Inland Revenue’s seizure of his golf carts and their transfer to Nassau. “I just finished with my lawyer, and everything should be sorted out tomorrow [today]. That’s why I’m going home.” When asked what had motivated the authorities’ actions, he replied: “It’s a couple of things”, but did not elaborate.

The island-wide sweep of companies in Harbour Island focused on businesses suspected of not being properly licensed, failing to pay VAT and other due taxes, and under-declaring or under-reporting revenues to avoid the full Business Licence fee and other levies.

While not identifying which sums applied to which business, Mr Wilson previously told this newspaper that the two Briland businesses were suspected of owing a combined $1.3m in unpaid taxes. “With one of the businesses we (are) investigating, there is an estimated $1m in taxes (owed). The other business, our initial assessment is $300k in taxes,” he said.

“In the case of the two businesses, one business declared $1 in revenue last year and they are making close to $1m in revenue. The next business declared $10,000 in revenue and that’s closer to $2m.”

Department of Inland Revenue officials previously confirmed around 30 golf carts, three sea craft and information from computers were seized from Andre’s Rentals, while 102 cases of Pink Sands Spirits liquor, 21 bottles of Vodka, boats, cars, two Mercedes vehicles, and three golf carts were secured from Conch & Coconut.