foreign investment projects, of all sizes and
locations across the nation, attest to the
success of our strategy in this area. I will
return to a fuller discussion of these projects shortly.
MODERNIZING TAX ADMINISTRATION
Mr. Speaker,
We have also implemented the most important tax reform exercise in the history
of our nation, with the introduction last
year of a Value Added Tax, in combination
with the reduction and elimination of other taxes. As well, we have launched major
reform exercises in respect of the administration of our major taxes. Not only will
these measures lead to an enhanced revenue yield from our tax system but they
will also lead to enhanced efficiency and
growth of our economy.
[16]
2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE
The Customs Modernization Programme
is continuing, with Customs committed to
processing all entries electronically as of
July of this year. In addition, Customs aims
to have the online payment of entries by
September, using the same payment methods utilized for VAT.
Customs enforcement will commence
operations of a canine unit in both New
Providence and Grand Bahama this summer. This complements the recently established Marine Unit and improves the
ability of the Department to address law
enforcement challenges. In addition, the
number of X-ray machines will be expanded to all major ports of entry, to increase
the ability of Customs to conduct more
non-intrusive searches for contraband.
To comply with FATF and CFATF requirements, Customs will also commence currency declaration procedures in June for
individuals leaving the Bahamas with more
than $10,000 in cash.
As well, a vendor for the Electronic Single
Window system will be selected by the
end of this year. This will make the entire
Customs process automated and create a
one-stop shop for importers. Like many
of the reform initiatives, this is being funded through an IDB loan.
an extended process, made complex by
historical underinvestment, but the Government is committed to delivering to the
public a fairer tax, one with a broadened
base that will allow all taxpayers to benefit
from a lower tax rate.
In July 2015, the Department of Inland
Revenue (DIR), which previously comprised the Real Property Tax and Business
Licence Units, merged with the VAT Project Unit. The DIR also relocated to new
modern facilities located at the Shops at
Carmichael Plaza, Carmichael Road.
The Business Licence was first implemented in The Bahamas in September 1980.
Over the past thirty plus years, the processing system has remained virtually the
same. In 2015, a determined effort was
made to modernize the Business Licence
process by having it converted from manual to fully automated. In this regard, significant progress has been made. Applications for new licences and renewals of
existing licences are now processed online
and this is supported by either online payment or direct payment through the banking system.
The Department has modernized Real
Property Tax by implementing a Property Tax Computer-Assisted Mass Appraisal (CAMA) software. The new Tyler is a
World software was launched in December 2015; and shortly, also in conjunction
with Tyler Technologies, the Department
will embark on a programme to update
its data collections and imaging. The aim
is to increase the number of registered
properties and bring greater equity in
both the assessment of properties and the
overall Real Property Tax System. Currently, there are 99,556 properties on the
property tax register, with 12.6 per cent
classified as residential, some 57.2 per cent
as owner-occupied, 23.6 per cent as vacant
land and roughly 6.5 per cent as commercial properties.
A total of 43,003 properties are now fully exempted from the payment of property taxes. During this fiscal year, 42.5%
or 24,008 of taxable properties have paid
taxes amounting to just over $100 million.
There were several property tax initiatives
introduced in July 2015 which included a
10% discount for property owners who
pay their taxes in full by March 31 and a
fifty percent discount for Senior Citizens
on their Owner Occupied property bills.
The reform of the property tax system is
Additionally, communication with clients is
conducted online and customers can now
print their own licence upon paying the
prescribed fees. This can all be achieved
without the customer having to physically
visit the Business Licence office. Licences
are also now issued with a barcode that
allows for easier verification of authenticity. While there have been some growing
pains, it is acknowledged that there have
been marked improvements over the
manual system previously operated.
From January 2016 to the present, the department has approved 10,430 licences,
almos t 70 per cent of which are for businesses with turnover of $50,000 or less.
Another roughly 20 per cent are for those
with turnover from $50,000 to $500,000
and some 12 per cent or so for those with
turnover from $500,000 to $5 million. Licencees with turnover in excess of $5 million number 265.
Business Licence revenue collected, thus
far for the current fiscal year, is just under
$92 million. The focus is now on educa-