‘HUNDREDS OF MILLIONS IN TA ARREARS REMAIN

THE MINISTRY of Finance’s top official yesterday said “hundred of millions” in tax arrears remain outstanding even though VAT revenues are 7 percent ahead of projections for the first nine months of the 2022-2023 fiscal year.

Simon Wilson, the financial secretary, told reporters yesterday that March was a “good month” for revenues as the Government enters the final quarter of its fiscal year that closes at endJune. The first three months of the fiscal year, including March, is typically the strongest revenue-earning period for the Government as it includes peak winter tourism activity, Business Licence fee payments, the bulk of real property tax payments, and commercial vehicle licensing.

However, Mr Wilson confirmed that significant amounts of VAT and other unpaid taxes remain outstanding. And that does not include the estimated $800m in real property tax arrears estimated to exist at end-March 2023.

“There are two different scenarios,” Mr Wilson said of real property tax delinquents. “There are people who come in and say ‘This is what I should pay’, and people who try to evade the system. Obviously we don’t know that amount. Most property taxes are owed by foreign-owned properties because Bahamians have a wide level exemption.

So this is primarily driven mostly by non-Bahamian owned properties.”

Following reforms passed with last year’s Budget, the first $300,000 of a property’s value is exempt from real property tax. All inhabited Bahamian islands are thought to contain properties that owe tax arrears to the Public Treasury.

Mr Wilson, meanwhile, pledged that the tax enforcement and compliance drive will continue. He added that the Government is “not targeting” specific companies, but added that there were “consequences” for those deliberately avoiding or evading their obligations to the Public Treasury.

“So it’s not targeting,” he said. “Targeting gives a thing that you’re picking on people. We’re just going through a compliance strategy to ensure that you encourage business to be compliant, and if you are non-compliant there are consequences for non-compliance.”

Speaking earlier at a Ministry of Finance procurement workshop, Mr Wilson said the Prime Minister had directed that officials come back to him with “something to show” progress on implementing the Government’s new procurement system.

This is being effected via the Bonfire electronic platform, and he added: “The previous procurement system we had did not keep good records. It’s a very old system. So what we’re doing is we’re backfilling information on the new Bonfire system to publish contracts and so forth.

“So, to be clear, all government contracts are public knowledge. So there’s no black budget. So if the Government signs a contract, obviously the Government wants you to know because this is the public’s money. It is the reporting format that is a challenge, right. So that’s what the issue is. All contracts the Government signed are public knowledge. The Government does not sign contracts in the dark. All of the vendors are known and so forth.”

Turning to the Government’s planned renewable energy roll-out, which initially is focusing on Family Island microgrids and roof-top installations with financing provided by the Inter-American Development Bank (IDB), Mr Wilson said: “Our focus is primarily in the southern Bahamas in MICAL… We believe that renewable energy can be transformative to a return of our economy and a return to our way of life.

“So we are very, very eager to get this project started to get contractors in the field to get things done. This is very, very important for us. Our goal is by this summer we will start focusing on not just MICAL, but in Abaco as well. Then also we have a couple of rooftop installations in New Providence where we think there is a huge opportunity in the school system, and we have completed three so far and we have several more planned.”