Wednesday, February 12, 2025
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
A Bahamian financial services provider yesterday branded the demand to disclose all corporate clients’ real estate dealings by week’s end as “outrageous”, adding: “They have just killed ease of doing business.”
Paul Moss, Dominion Management Services’ principal, voiced doubts to Tribune Business that his firm will meet the February 15 deadline for filing the 16-page ‘real property declaration’ on behalf of its 100-plus clients as he blasted MPs for changing laws without seemingly understanding “the pain and suffering” it will cause to the private sector and The Bahamas’ competitiveness.
Asserting that it increasingly appears as if entrepreneurs “are in business to work for the Government”, given the ever-increasing taxation and compliance burden they face, he echoed the concerns of other registered offices and agents that they simply do not have on-hand access to all the information being sought by the Department of Inland Revenue.
The Government reformed the VAT Act in the 2024-2025 Budget to require all registered offices and agents to supply, on behalf of all their Companies Act and International Business Companies (IBCs) Act clients, details on all their Bahamas-based real estate holdings, plus every property transaction these entities had entered to and completed over the past year.
Mr Moss, though, told this newspaper this has “placed the onus on registered agents to verify” the accuracy of information they do not necessarily possess as it is instead held by their clients. This, he warned, could reach the point where registered agents “perjure” themselves if a declaration proves inaccurate, while this expansion of their duties is not supported by their governing law, the Companies Act.
“Listen, it’s outrageous,” the Dominion Management chief said of the ‘real property declaration’ and looming February 15 filing deadline. “I doubt we can make the deadline. I’m not even actually sure [how many clients we have], but it’s well over 100. It’s difficult to get this information, too.
“I don’t understand the necessity of it because, quite honestly, they [the Government] have the information already themselves. Any time there’s a conveyance in the name of the company, that name must be registered with the Department of Inland Revenue. They know it. They have it.”
The ‘real property declaration’ is designed as a tool that will enable the Government to crack down on VAT avoidance/evasion involving the sale of commercial and high-end residential real estate. However, Mr Moss argued: “It’s very foolish. They talk about the ease of doing business. I can tell you they have just killed that.
“There’s no way you can get business done quickly or efficiently because every time you complete a transaction there’s an amendment. It seems the politicians don’t know what’s going on in the country. They allow these amendments to be made with no thought of the pain and suffering it’s going to cause people to get it done. It’s crazy.
“To be quite honest with you, I don’t know what they’re going to do, but I doubt it’s going to get the response they’re [the Department of Inland Revenue] looking for. It puts the onus on the registered agent to verify, and I don’t know how we can because we simply don’t have the information,” he added. “It’s ridiculous.
“I’m not sure the people who came up with this understand private industry. This is not what a registered office is about.” Mr Moss said registered offices and agents are supposed to be the address were summonses and notices are served on corporate clients, while they also perform the annual filings with the Companies Registry, associated fee payments, and maintain regular records - not details on property holdings or deals.
“How would we know there’s a transaction that the company may have?” he added. “We just don’t know. Listen. To be quite honest with you this is occupying the bulk of our time trying to come up with these things and it’s quite difficult to complete because we don’t have the information. We have to rely on the client.
“I wasn’t aware of this until the beginning of this year. Notwithstanding any guidance or notes sent out, from my vantage point there’s no way for a registered office to know for certain, this registered office to know, the full effect of what this requires. One has to be very careful about signing something that could put you in a perjury situation.
“It’s a big distraction. It’s the beginning of the year. We have to do so many compliance things with the Securities Commission. We have to do Business Licence filings. It’s just unbelievable, totally unbelievable; just disturbing. There just seems to be no one who you can go to and say: ‘Check yourself. Please don’t do this’,” Mr Moss said.
“This is what it seems like to me: Your in business to work for the Government. You’re working at their behest. It’s not comfortable to do things this way when they give you timelines like this. It’s just difficult and you have other things as well. It’s crazy; just crazy. Very depressing.”
Mr Moss said the ‘real property declaration’ mandate will be more palatable if it applies just to corporate entities who have engaged in real estate transactions rather than adopting a blanket, across-the-board approach for all.
“I can understand you doing it for companies that have some property,” he added. “They want you to do it for all. That’s just garbage. It makes no sense to me. I didn’t see any amendment to the Companies Act for this to be true. That tells me what my requirements as a registered agent are, not the VAT Act. “
All registered offices and agents - typically law offices, accounting firms and corporate services providers - must now submit declarations for all corporate clients incorporated as Companies Act or IBCs Act entities by February 15. They have to detail all their clients’ real estate holdings, and all property transactions they were involved in during the past year.
The 16-page form, which has been seen by this newspaper, requires registered agents to declare that all the information supplied by their corporate clients is “true and correct” even though they will not necessarily be able to verify its total accuracy. Details on all beneficial owners/shareholders; property addresses and their tax assessment numbers; and taxpayer identification numbers are just some of the details sought.
Also sought by the Department of Inland Revenue is information on whether a particular property is jointly owned with another company or person; if it is being held in trust for someone; and if a corporate entity or person is holding it in trust for the reporting company. These specifics must be provided for, and repeated, for all properties owned by the reporting company, as well as all sales and purchases it has participated in.
Comments
Sickened says...
Mr. Moss needs to start a class action lawsuit against the government on this crap! This is not how government should get this information.
Posted 12 February 2025, 11:48 a.m. Suggest removal
ExposedU2C says...
It's not just the recent ridiculous amendment to the VAT Act, but also the fact that Bahamians and their businesses were not carved out of and made exempt from the onerous economic substance form filling that their registered agents must do annually under CESRA, 2023, even though most of these companies only do business in the Bahamas, and in many instances only hold real property in The Bahamas for their Bahamian owner(s).
Our doofus AG and the other incompetent douchebags who hold leadership positions with departments and agencies that fall under the Ministry of Finance, like Inland Revenue, have little if any common sense, and they behave as if they have a mandate to make life as difficult as possible for honest and hard working Bahamians.
These imbeciles wrongfully assume we are all crooks and tax dodgers in order to justify their own laziness in adopting a draconian "one-size-fits-all" policy to everything because of their immature power crazed mentality that drives their insatiable appetite for more and more form filling and paperwork, no matter how outrageously costly and unfair the burden may be for Bahamians, their businesses, and their service providers.
The cost of doing any kind of business in the Bahamas is literally putting legitimate and hard working Bahamians out of business and denying young entrepreneurs the opportunity to establish new "start-up" businesses. Dare I ask, just how stupid can doofus AG Pinder, corrupt PM Davis, Always Angry Simple Simon, and Dumbo Halkitis, all actually be??!!
Posted 12 February 2025, 12:07 p.m. Suggest removal
Dawes says...
Government has no idea what it is doing. It just creates new laws with the hope it may raise revenue and with no consideration of the amount of time and work it takes the private sector to enforce. But then again Government is lead by numerous people who never would make it in the private sector if it wasn't for their public connections.
Posted 12 February 2025, 1:17 p.m. Suggest removal
sheeprunner12 says...
Lawyer run businesses. The DPM is a businessman.
There are numerous businessmen in Parliament.
That is no excuse for these stupid laws. Paul Moss is right that the Government wants to take the lazy way out by making untold demands on the private sector to account in order for the public sector to collect Revenue on the cheap.
Posted 13 February 2025, 5:56 a.m. Suggest removal
ExposedU2C says...
This is but the tip of the iceberg because, as a constitutional democracy, I do not recollect a national referendum ever having been held whereby the Bahamian people approved an amendment to the Constitution of the Commonwealth of The Bahamas to empower the government to impose income tax of any kind on our people. Yet the government has been using the Business License Act as a backdoor means of taxing businesses owned by Bahamians based on their revenue which is tantamount to an unconstitutional taxed based on income.
Also our government now plans on using the OECD/EU economic substance reporting platform built into CESRA, 2023, as a spring board for eventually imposing direct income tax on all Bahamians and their businesses at a minimum rate of 15%. This too would be unconstitutional without an amendment to our Constitution duly approved by the Bahamian people in a national referendum.
Our Constitution only empowers the government to fund itself by way of customs duties, license fees, stamp taxes, excise taxes, real property tax, and similar funding mechanisms like VAT. Nowhere in our Constitution does it state that the government is empowered by the people to impose on them or their businesses any kind of direct or indirect income tax based on the income, gains, or profits they derive from their own personal work effort or business activities.
The ever increasing funding demanded from the private sector by our corrupt and incompetent politicians, and their local and foreign cronies engaged in much waste and fraud associated with rampant crony capitalism, only serves to fuel, nurture and grow (exacerbate) the already grossly over-bloated size of our very costly government, thereby creating an unsustainable social welfare state that is increasingly vulnerable to quick collapse under the weight of enormous continuing deficits and a national debt that cannot be repaid. This would leave us fitting the very definition of what President Trump calls a "shiit-hole" nation.
Posted 13 February 2025, 9:41 a.m. Suggest removal
Sickened says...
We also need to think about the level of education the people have who are receiving these 100's of thousands of forms. There is a 90% chance that they cannot read very well and are not capable of transposing the words on the forms into an electronic database of some sort. So I would humbly suggest that these forms be completed by hand and in join-on (or cursive). In that way the information provided will never be read by the VAT office but you would have completed your obligation.
Posted 13 February 2025, 8:44 a.m. Suggest removal
bahamianson says...
How about seeing it as The Freedom of Information Act? The same should be for political candidates and current ministers . Corruption is like candy in the country.
Posted 13 February 2025, 11:33 a.m. Suggest removal
ExposedU2C says...
***Question: Does the Constitution of the Commonwealth of The Bahamas empower the Bahamian Government to impose income tax on the Bahamian people?***
**ChatGBT Response:** The Constitution of the Commonwealth of The Bahamas does not explicitly grant the government the authority to impose income tax on its citizens. Instead, the Constitution outlines the procedures for introducing and passing "Money Bills," which pertain to the imposition or increase of taxes. According to the Constitution, a "Money Bill" is defined as a bill that makes provision for the imposition or increase of any tax. Such bills must be introduced in the House of Assembly and, upon passage, are sent to the Senate. The Senate may not amend a Money Bill, and if it does not pass the bill within one month, the House of Assembly may proceed to pass it without the Senate's consent.
However, the Constitution does not specify the types of taxes that can be imposed. Historically, The Bahamas has not levied an income tax, capital gains tax, inheritance tax, or corporate tax. Instead, the government relies on other forms of taxation, such as consumption taxes, property taxes, and import duties. For example, the Value Added Tax (VAT) was introduced in 2015 at a rate of 7.5%, increased to 12% in 2018, and now stands at 10%.
In summary, while the Constitution provides the framework for the government to impose taxes through the legislative process, it does not explicitly empower the government to impose income tax. The absence of an income tax aligns with the country's historical tax policies.
***Question: Is a national referendum necessary to amend the Constitution of the Commonwealth of The Bahamas in order for the Bahamian Government to be empowered to impose income tax on the Bahamian people?***
**ChatGBT Response:** To empower the Bahamian Government to impose income tax, an amendment to the Constitution of the Commonwealth of The Bahamas would be necessary. The Constitution does not explicitly grant the government the authority to levy income tax; therefore, such a power would need to be introduced through a constitutional amendment.
The process for amending the Constitution is outlined in Article 54, which specifies that Parliament may alter any provision of the Constitution by passing an Act of Parliament supported by at least two-thirds of all members in both the House of Assembly and the Senate. Additionally, the proposed amendment must be submitted to the electors qualified to vote for the election of members of the House of Assembly, and a majority of those voting must approve the Bill.
Therefore, a national referendum is required as part of the constitutional amendment process to grant the government the authority to impose income tax. This referendum allows the electorate to approve or reject the proposed change, ensuring that such a significant alteration to the nation's tax system reflects the will of the people.
Posted 13 February 2025, 9:25 p.m. Suggest removal
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