By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

The Ministry of Finance’s top official yesterday revealed he expects next year’s Business Licence fee revenues to be “extraordinary” following a 10 percent increase in collections this year.

Simon Wilson, the financial secretary, addressing the Bahamas Institute of Chartered Accountants (BICA) accountants’ week conference, gave the optimistic forecast when asked by an attendee to compare the revenue generated since the introduction of the new Business Licence Act and the administration’s enhanced enforcement and compliance efforts.

He added that while not a “fair comparison”, as the majority of Business Licence fees are collected between January and April, the tax authorities have seen a 10 percent increase when compared to the same period in 2023 and he expects collections to be “extraordinary” based on current indicators.

“Business Licence, as you know, is a calendar tax, so it’s not a fair comparison because the bulk of Business Licence is collected in the period January to April, but we are tracking roughly 10 percent above last year same time,” said Mr Wilson.

“We feel a structural change in compliance is taking place. We look forward to the tax period between January through April, and believe it will be extraordinary based on what we’ve seen so far.” The Government is forecasting that Business Licence fee revenue will increase by 44.4 percent or more than $62.5m for the 2024-2025 fiscal year, growing from $141m in 2023-2024 to $203.555m.

Another accountant, meanwhile, questioned what is being done to enforce tax compliance on unregulated businesses that operate in the informal economy. She adderd that many registered businesses have received compliance checks, and have to submit audits, while those in the informal sector are selling products that directly compete with them and could possibly be making above the $100,000 VAT registration threshold.

Mr Wilson, in reply, said compliance officers have “touched” most businesses several times. One challenge is that 90 percent of businesses declare they make less than $100,000, keeping them below the VAT registration threshold, but audits can reveal information about the businesses they engage with.

“Let me assure you, I also drive around this country, and I also talk to my compliance people almost on a daily basis. If a business is out there, chances are they have been touched by our compliance people several times, so we do have a high level of compliance,” said Mr Wilson.

“The challenge that we have is that 90 percent of businesses who register say they make less than $100,000, so that’s a challenge, and that’s why we do the audits and so forth. And we use the audits not only to gather information about the business we audited but the other businesses who are related through business transactions.”

Another participant said accountants are aware of the challenges involved in governing The Bahamas, but argued that if the Government would make more effort to explain how tax revenue are used Bahamians would not have the “overall perception that the economy is bad in the country”.

He pushed for the Government to be more transparent with its challenges and keep the public informed of its fiscal state to prevent negative outlooks. Mr Wilson said persons, who he did not name, are painting the the Bahamian economy in a negative light for their own purposes.

“Persons who have the bully pulpit and so forth have to use it responsibly because when they talk down the economy, they impact everybody,” he argued.”They are not just impacting the Government, they’re impacting everybody because, eventually, somebody in Toronto who’s in charge of risk at one of the Canadian banks can say, you know what, the economy in The Bahamas isn’t doing so good. We’ll reduce the credit levels.

“This will affect our ability to borrow. So we have to be responsible in terms of how we interpret information. I do not think it’s my responsibility to dictate how someone should feel the economy, but I am saying the information is available. It’s all there. People should utilise the information responsibly.”

Mr Wilson said a new economic impact study is being undertaken that could show the cruise industry makes a greater contribution than previously thought. He added that The Bahamas has seen a 20 percent year-over-year increase in cruise arrivals that is the envy of Caribbean competitors.

“We’ve seen a 20 percent year-over-year increase in cruise business. That’s a very powerful number,” said Mr Wilson. “When you talk to our competitors in the Caribbean, they will tell you The Bahamas is like a vacuum. They all see the impact of the resurgence of The Bahamas’ tourism industry on their numbers. All through the Caribbean, we talk to them, and they’ll tell you that.

“But yet, still in this economy, we who are benefiting directly and indirectly from this resurgence, it’s viewed as a negative, it’s viewed as it’s not good enough, or so forth. There has to be a balance, that’s all I’m saying.”