Dexter Fernander, the Department of Inland Revenue’s (DIR) operations manager, said they have seen a 20 percent voluntary compliance rate from short-term rental owners in registering their businesses and obtaining the necessary licences.

Speaking at the Office of the Prime Minister’s press briefing, Mr Fernander noted the department has had to take a more proactive approach, as many short-term rental owners and property managers are operating outside of the jurisdiction.

“We’ve passed the point of waiting for the individual to come in to us. So we’ve started to raise assessments for both VAT and business licence on the short-term rental,” Mr Fernander explained.

So far, we can see an estimate of the numbers of the individuals that are in working within our jurisdiction. We’re seeing about 20 percent come in, voluntarily come in. So we’ve reached a point where we need to start now raising assessments on those individuals.”

He said the department has been receiving information from its partners, such as Airbnb to identify these unregistered short-term rental operators and have sent out notices.

“We have received information from our partners, the Airbnb, Vrbo and so what we proceeded with was stop waiting for individuals to come to us. Once we got the information about it, we then sent out,” said Mr Fernander.

Mr Fernander said many of the owners of short -term rentals and their property managers are non- Bahamian and as such their properties need to be registered with the Department of Inland Revenue and the property managers need approval to work in the country.

“If you’re acting doing work within the jurisdiction, you need to have a business license for that service within the jurisdiction. So, two things are happening. The person needs to register the owner of the property, and the second thing is that property manager needs approval to work within this jurisdiction,” said Mr Fernander.

The department is also looking into other services associated with short-term rentals, such as car services, private chefs, and cleaning staff, to ensure that all relevant businesses are properly licensed.

“We are also asking Bahamians to be truthful. If you are in a Family Island, and you know that this is not registered on the Family Island, who’s cleaning the place, who’s providing the food for the place, who’s leaving the car at the airport. So, all of these features that are going beyond rental of property.  Now, car services, private chef, those things, those licences, need to be regulated,” said Mr Fernander.

With the increased focus on this industry, Mr Fernander urged all short-term rental owners and property managers to ensure they are properly licensed and warned that there will be consequences for short term rental owners that fail to comply with the relevant regulations

“There are fines and penalties, and including of some further things that we have in our arsenal that we can use. One of the things is we can double the tax of the registrant. There are many things that we can use, but we are asking people to be compliant,”

“If you’re in the jurisdiction you’re working, you should have a business licence for the nature that you’re operating within, here this jurisdiction. It’s not like you can go to any other jurisdiction and then do services, raise revenue in that jurisdiction and not report.”

When asked if DIR will continue its aggressive stance towards revenue collections this year, Mr Fernander said “yes, we are definitely to meet our mandate”.