By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

The Government’s senior revenue official has pledged that large companies will receive “crème de la crème” service when the Large Taxpayer Unit is launched next month.

Shunda Strachan, the Department of Inland Revenue’s (DIR) acting controller, said an initial 50 firms have already been invited to come under the Unit’s remit in what will be a phased approach. The VAT Act’s newly-introduced legal requirement, which mandated companies with an annual turnover in excess of $5m submit their filings and pay the tax within 14 days of period-end, as opposed to the current 21-day deadline, is also being rolled-out in stages.

Addressing a Friday press conference, Ms Strachan said the initial 50 firms selected for the Large Taxpayer Unit are being notified and informed they will have to submit VAT payments within 14 days of the month’s end. “We expect to establish a Large Taxpayer Unit by September,” she said.

“The persons who are invited to join the Large Taxpayer Unit will be notified. I know there has been some questions relative to the amendment that spoke to large taxpayers having to file and pay by the 14th of the month, as opposed to the 21st. Well, that is really intended for those businesses that are going to be invited to be a part of the Large Taxpayer Unit. We expect that there will be at least 50 of the largest businesses and we’re going to notify them.

“So if you haven’t been notified, then you won’t be a part of the unit in the first instance. So everybody who’s considered a large taxpayer will not be invited to the unit first-off. But if you’re invited to join the Large Taxpayer Unit then you will be expected to file and pay by the 14th of the month, as opposed to 21st of the month,” Ms Strachan continued.

“Of course, they will enjoy other things. They will have the crème de la crème concierge service. So we will treat them as they want to be treated, and give them all of the services that they require. But, of course, on the other side to that is they will be expected to pay us a little bit earlier, the VAT.”

Ms Strachan also sought to justify the sharp increase in the occasional licence fee for public entertainment events to $750, explaining that this will be applied to ticketed for-profit events such as music concerts and not the likes of regattas or cook outs.

Confirming that this fee will have to be paid by the organisers of one-off events, and who do not hold an annual Business Licence, she said: “There is a new fee for occasional Business Licences relative to public entertainment. No, it’s not for cook-outs, it’s not for regattas or homecomings, or any kind of civil type of entertainment.

“But if you are a promoter, and you don’t have an annual license, and you’re having a public entertainment event, if you are bringing in somebody from the States to perform and you’re selling tickets… that’s the catch… You’re selling tickets, it’s at a public place on public premises, you’re inviting an entertainer, whether it be Bahamian or foreigner, selling tickets, and you’re going to put up this nice stage and have lighting.

“You’re spending money because you expect that you will generate a pretty sizable turnover, then your occasional license fee is $750…For those events, if a promoter does not have an annual Business Licence, then they will really need to get an occasional license and pay the $750.”

Moving to real property tax, Ms Strachan reiterated that non-Bahamians are now required to show proof that they are current with their payments prior to obtaining a building permit. She added that this was designed to catch the many foreign property owners who do not remain current with real property tax payments for vacant lots, as they will now be unable to build without bringing their taxes up-to-date.

Ms Strachan said: “Another thing relative to real property tax will now be that foreigners will require proof of payment if they are building. So if you go in, if you’re a non-Bahamian, and you’re going in to get a permit to build a home or to build whatever it is you’re building, you have to show proof that your real property taxes are up to date.

“And that’s really because we see a lot of cases where foreigners own vacant land. But the real property tax is not being kept current. And so now the Act requires them to show proof that real property tax has been settled before they are granted a building permit.”

Ms Strachan added that non-Bahamians must now pay VAT at the 10 percent rate on all property sales and transfers, and will not benefit from the ‘sliding scale’ of tax rates for purchases below $1m that Bahamians enjoy. She added that failing to declare property or submitting a false declaration now holds a “hefty” penalty of $100,000.

“The other change or amendment relative to VAT is in the area of property transfers for foreigners,” she said. “They now pay 10 percent. So it doesn’t matter what the value of the property is. If you’re a non-Bahamian and you’re purchasing land in The Bahamas, the VAT payable on the property transfer, the conveyance and stamping of the conveyance is 10 percent.

“If you haven’t declared your property, or if you’ve given us a false declaration, again, the penalty could be pretty hefty. And it could really be in the area of $100,000 or more. So that’s a big one.”

Ms Strachan also stressed that all businesses operating within and from The Bahamas are required to have a Business Licence, and that a fine of $150,000 can be imposed on those who fail to obtain this permit.

She said: “All businesses doing business in The Bahamas or from within The Bahamas still require a Business Licence. The only exceptions being if you are a holding company or an investment fund, there is no requirement for you to have a Business Licence. But, other than that, if you are doing business in The Bahamas, meaning you’re trying to generate a turnover or profit, you’re expected to have a Business Licence.”

“The penalty for not having a Business Licence, that’s $150,000. So, again, it’s imperative for all businesses doing business in The Bahamas or from within The Bahamas to have a Business Licence because you will avoid heavy, hefty fines and penalties if you do register on time.”