The government yesterday deferred the implementation of the business license amendments it made during the budget exercise this summer, reverting to the old business license regime, after the business community and the opposition complained of the negative effects the changes would have on small businesses.
Prime Minister Dr. Hubert Minnis explained that because the government will have to take a broader look at this country’s tax system in light of changes brought on by pressure from international financial watchdogs like the European Union (EU) and the Organization for Economic Cooperation and Development (OECD), it will hold off on making changes to the business license regime.
However, he added that many small businesses also complained directly to him about the changes his government made to the Business License Act, which required businesses to have audited financials and bank statements in order for their licenses to be renewed. These requirements would have imposed extra costs on businesses.
“We have determined that given where we are, and the likely need for further reform of the tax system in light of the recently debated legislation around our offshore sector, we will defer these and other planned changes to the reporting regime until such is considered in the broader tax reform effort,” said Minnis.
“This will mean Mr. Speaker that, we shall revert to the status quo before July of this year, which required businesses with a turnover of $100,000 or greater, to submit with their renewal application, a certified statement of attestation, signed by a licensed member of the Bahamas Institute of Chartered Accountants.”
The prime minister warned though, that the Department of Inland Revenue will be increasing its vigilance to ensure that no businesses issue fraudulent statements.
“A word to the wise is sufficient,” he said. “We expect all businesses to file honest, accurate statements, as most reportedly do already. The pace and frequency of VAT (value-added tax) and other audits will increase.”
Amendments added to the bill passed in the House of Assembly yesterday, are part of the government’s move to increase the ease of doing business in the country, Minnis said.
an amendment in paragraph four that negates the need for obtaining regulatory approvals once again from all of the regulators, in order to renew a business license.
“Before, the government had used the Business License Unit as the enforcement arm for all regulators,” Minnis said.
“But that simply is not best practice and it served only to frustrate the businesses and the business license process. Thus, this move means that the Business License Unit will do its job – which is to license businesses.
“The regulators will provide the Business License Unit with information it has on delinquent licensees before the licensing period, or be required themselves to address the businesses otherwise within the parameters of the law.
“But the Business License Unit will no longer serve as the de facto policemen for these other agencies. They will have to fulfill their own obligations as it should be.”
He added that in the new year, businesses will be afforded faster service with less government bureaucracy.