By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas top executive yesterday asserted “we’re glad to get that off our plate” after the company conceded its tax fight and paid the total $3.538m sought by the Government.

Franklyn Butler, the BISX-listed communications provider’s president and chief executive, told Tribune Business it “made no sense” to continue the battle with the Department of Inland Revenue after the company’s attorneys advised “it is more likely than not” the Bahamian tax authority would win its claim for unpaid VAT and Business Licence fees.

Cable Bahamas’ “strategic decision to settle the dispute and avoid further financial exposure” is disclosed in its just-released financial statements for the year to end-June 2025. Besides giving up its full $2.313m deposit, a sum equal to the disputed taxes and which it had to lodge to pursue its Tax Appeals Commission challenge, it has paid a further $1.225m to ensure post-settlement “compliance”.

Mr Butler, telling this newspaper that “nobody wants to fight with the tax collectors”, reiterated that Cable Bahamas and its Aliv mobile subsidiary are “glad to have that behind us” and are committed to being “a good corporate partner” that “pays its fair share of taxes” to finance critical public and national infrastructure.

The dispute with the Department of Inland Revenue centred largely on whether VAT was incurred on international inbound roaming and call charges plus insurance proceeds. Cable Bahamas’ share of the payment is $1.039m, comprised of $718,830 that was accrued during the disputed four-and-a-half year period through to end-June 2022, and a further $320,206 incurred between then and settlement.

The majority, amounting to almost $2.5m, was incurred by Aliv. Besides some $1.594m that the Department of Inland Revenue alleged was unpaid and owing for the period between January 1, 2018, and March 31, 2022, a further $905,102 has now also been paid to cover the period between the latter date and the two parties’ settlement.

“As of June 30, 2024, the company and Aliv were involved in formal disputes with the Department of Inland Revenue (DIR) regarding assessments issued by the DIR for unpaid taxes and fees totalling $2.313m,” Cable Bahamas’ audited 2025 financial statements confirmed. 

“Aliv’s assessment, covering the period from April 1, 2017, to March 31, 2022, amounted to $1.595m and related to VAT and Business Licence fees on insurance proceeds, international inbound roaming charges and other items. The company’s [Cable Bahamas] assessment, covering the period from January 1, 2018, to June 30, 2022, amounted to $718,830 and pertained to VAT on international inbound voice charges.

“The Group, with the assistance of legal counsel, had initiated formal disputes against the Department of Inland Revenue and, to avoid potential penalties, had deposited the disputed amounts with the Department of Inland Revenue. These payments were made without waiving any rights in the ongoing disputes, and the group intended to vigorously contest the assessments,” Cable Bahamas added.

“However, as the matter progressed during the year, further legal evaluation and discussions with legal counsel indicated it is more likely than not that the dispute will be resolved in the Department of Inland Revenue’s favour. Considering this evolving context, the group made a strategic decision to settle the dispute and avoid further financial exposure.”

Cable Bahamas’ financial statements said that, as a result of the settlement, the deposit paid to the Department of Inland Revenue was “expensed” during its 2025 financial year and recorded under ‘government and regulatory fees’. As a result of forfeiting the $2.313m to the Bahamian tax authority, these fees increased by more than $4.45m year-over-year to hit $19.197m.

The BISX-listed communications provider also disclosed that, beyond the $2.313m, it made a further $1.225m payment to cover any outstanding taxes owed over the same issue between the disputed periods and the settlement date.

“Furthermore, in connection with the settlement and to reflect ongoing compliance for periods subsequent to the assessments, additional amounts of $905,102 for Aliv and $320,206 for the company, relating to the period from the end of the respective assessment periods to the settlement date, were also expensed under government and regulatory fees during the current year,” the financials added.

Mr Butler, explaining that Cable Bahamas and Aliv are looking forward and not back, told Tribune Business yesterday of the settlement: “Nobody wants to fight with tax collectors. We’re glad to get that off our plate. The Government is a partner of ours, we’re a Bahamian organisation and we want to pay our fair share of taxes so that the country has the roads and infrastructure it needs.

“It made no sense. We’re really trying to be partners with the Government and be a good corporate partner paying our fair share of taxes. We’re glad to get that behind us.” Cable Bahamas’ year-end 2025 financials also disclosed that it is in talks with the Utilities Competition and Regulation Authority’s (URCA) ruling that it pay a fine over its pay-TV service’s non-compliance with quality standards in 2021.

URCA has demanded the BISX-listed communications provider pay a fine equal to 2.025 percent of its monthly recurring pay-TV charges for that year. “On November 21, 2022, URCA issued a final determination and order against the company with respect to certain matters relating to its compliance with quality of service standards in the provision of its pay television services during the period January to December 2021,” Cable Bahamas recorded in its financials.

“At June 30, 2025, and 2024, a provision has been recognised for what the group considers to be a probable future outflow and included under amounts payable to the government and statutory agencies. The parties are in negotiations to settle the matter.”

Mr Butler yesterday confirmed that the pay-TV issue with URCA was not settled yet, but added: “We are trying to be a friend to all regulators.” URCA’s late 2022 decision stemmed from an investigation it launched more than a year earlier in July 2021.

This came “in response to numerous complaints from customers following Cable Bahamas’ price applications to restructure/repackage its pay television packages in October 2020 and January 2021 for residential and business customers respectively”. Recurring complaints of outages, error messages and pixelated channels were probed.

Elsewhere, Cable Bahamas said the licences permitting its susbidiary, Cable Freeport, to operate in The Bahamas’ second city have been renewed for a 15-year period through to 2039. However, its legal battle with URCA over whether the latter, or the Grand Bahama Port Authority (GBPA), has regulatory authority for communications in Freeport continues.

“In prior years, URCA issued preliminary determinations outlining perceived breaches by the group relating to the non-payment of fees with respect to its operations in Grand Bahama. URCA asserts that the group is in breach of Parts IV and XVI of the Communications Act and, as such, has pursued regulatory measures against the group with the view to resolve this matter,” Cable Bahamas said. 

“The group has maintained that, based on provisions of the Hawksbill Creek Agreement, URCA does not have a legal basis to licence its operations in Grand Bahama, and has commenced legal proceedings to defend this position.

“At June 30, 2025 and 2024, a provision has been recognised for what the group considers to be a probable future outflow and included under amounts payable to the Government and statutory agencies.”