By Fay Simmons

Tribune Business Reporter

jsimmons@tribunemedia.net

A Cabinet Minister yesterday pushed back at concerns that recent Business Licence reforms have imposed unfair pressure on accountants and turned them into “tax collectors”.

Responding to complaints voiced at the Bahamas Institute of Chartered Accountants (BICA) Accountant’s Week seminar, Michael Halkitis, minister of economic affairs, argued that changes to the Business Licence regime should be viewed as an opportunity for the profession to expand its services and help educate the business community on compliance.

During the question-and-answer segment of his presentation, an accountant argued that while the profession accepts its role in supporting government revenue collection, the legislation has effectively turned accountants into tax collectors and subjects them to heavy penalties if clients fail to comply.

The accountant questioned the extent to which the new system has improved the collection of Business Licence fees, and the extent to which the Government has seen a significant increase as a result.

“The Business Licence legislation that was recently passed placed severe burdens on the accounting profession, and we accept it because we play a role in the collection of government funds. However, it made us tax collectors and placed a burden on us such that, if we weren’t happy with what was going on, we could face severe penalties,” he said. 

“Could you speak to that and tell us the difference it has made in the collection of Business Licence fees? Because we think that you must have seen a tremendous increase from that.”

Responding to the concerns, Mr Halkitis said the Government does not view the reforms as a burden on accountants. Instead, he described them as an opportunity for the profession to expand its services and help educate the business community.

“We don’t look at it so much as a burden being placed on the accounting profession. I think it also represents an opportunity for you, not only to increase your services, but also to impart some education to our business community,” said Mr Halkitis.

He acknowledged that The Bahamas has struggled for a long time with low tax and Business Licence fee compliance rates, and improving this situation requires certain enforcement measures. 

“We have been plagued for a long, long time with low compliance, and unfortunately we have to improve compliance - and we have to use some instruments to do it. We have seen an improvement that speaks not only to our performance, but to the performance of the country as well,” said Mr Halkitis.

He added that the Government remains open to dialogue with the accounting profession and BICA, recalling that past issues have been resolved through mutual discussion and co-operation.

“I would say that as far as I’m concerned - and I think I speak for Department of Inland Revenue (DIR) and everyone else - we always maintain an open and listening ear. When we had some issues a couple of years ago, we were able to sit down, talk through them and come to a resolution,” said Mr Halkitis.

“We don’t look at it as a burden. We have to improve our clients’ compliance culture, and sometimes you have to use certain instruments to achieve that.”