By Fay Simmons

jsimmons@tribunemedia.net

The Government is expecting to realise an extra $3m in revenue from the recent crackdown on Harbour Island tax cheats, its top tax official said yesterday.

Shunda Strachan, the Department of Inland Revenue's acting controller, said: “We did some investigations in Harbour Island. We're not done. But so far we know that in terms of revenue, it's probably over $3m for the businesses that we have started to review.

"And I'm saying it like that because the audits are ongoing. The audits are not done for those businesses as yet. We're still in the midst of gathering data, going through systems, going through revenue reports, receipts, bank statements. So far, we're probably at the $3m mark. And I don't know where we'll end up."

Ms Strachan said the Department of Inland Revenue is currently auditing nine businesses in Harbour Island and three in mainland Eleuthera, with the tax compliance and enforcement drive set to extend throughout the wider Bahamas.

"For Harbour Island, we're auditing about nine businesses and then we are still doing preliminary investigations for mainland Eleuthera. But mainland Eleuthera, so far there probably about three businesses. Like I said, we still have a lot to go. We will do more visits. But it's not just Harbour Island or Eleuthera; it's throughout the Commonwealth, it's throughout The Bahamas," she added.

“It is ongoing and it will not stop. There's no timeframe, it's just us staying consistent with what we're doing across the board. So we don't have a timeframe to when we're going to stop because we're not going to stop. It will be ramped up. That's what you're going to notice.

"We will be doing things weekly, bi-weekly. We do have other operations planned. And so it's going to be a consistent thing. We do know that in order for it to be successful, meaning in order for persons to maintain and keep current with their obligations, we really have to be more active.”

Ms Strachan said the major findings from the Harbour Island investigation were businesses failing to obtain a Business Licence, under-reporting revenue and companies charging clients VAT even though they are not registered or authorised to levy the 10 percent tax.

She said: “We’re noticing businesses not applying for the Business License, not reporting accurate turnover, not registering for VAT even after having gone over the $100,000 threshold. And, even more egregious, is businesses that are not registered for VAT but are charging VAT. And we saw that when we went to Harbour Island. That was alarming. You can't have businesses not registered for VAT but charging VAT and not remitting the VAT to the Government.”

Dexter Fernander, the Department of Inland Revenue's head of operations, added that investigations into Family Island businesses reveal many are operating outside of the scope of their Business Licence.

He said: “We noticed that individuals are having Business Licences, and they are operating with certain things that are outside the scope of their Business Licence. And so what we are currently doing now is just making sure that everyone is in a level playing field - that they're in accordance with whatever regulator they are under.

"And so as we are into the Family Islands, this now gives us the opportunity to gather material. So we're asking for businesses to be, first of all, honest and comply with the Business Licence to VAT and even the Real Property Tax Act. There are various Acts. As you sign up as a business, there are some obligations, and we would like them to enforce those that are under the Act.”

Ms Strachan revealed that in addition to obtaining warrants, Harbour Island businesses had records and assets seized. She emphasized that the Department of Inland Revenue is not trying to close businesses, but rather ensure that they are operating in a way that is compliant with all tax laws.

She said: “A lot happened because that was really our first seizure where we actually initiated a warrant. We went into businesses, we seized records, and we actually seized some of the assets. We have the ability to search and seize. That's one of the things that we're doing now where we are getting warrants. And I think that was all the flurry on Harbour Island that we actually went into businesses; we seized assets.

"And, more importantly for us, we seized records. And that's critical. Because once we have records then we're able to properly assess, and so the Department is assessing businesses. So if you aren't reporting, if you aren't declaring your turnovers, we are assessing you and we have the right under the law to do that. And, again, on the VAT side, those assets, once seized, can be sold to recover the taxes. And that's really where we're headed.

"I think our increased enforcement measures are going to decrease businesses doing the wrong thing. More businesses are now coming forward. They are contacting us. They are saying to us: 'Listen, I had no Business Licence for five years. Work with me what you could do.' We are working with them. We are not trying to put businesses out of business. That's not our goal. We trying to get you on the road to compliance to the right thing.”