The Bahamas Institute of Chartered Accountants (BICA) has expressed concern over the potential for fraud or miscalculations under the newly-publicized value-added tax (VAT) regime and is urging the government to include a provision calling for the signing off of large companies' VAT submissions by licensed accountants.
Darnell Osborne, president of BICA, said the institution believes that it would be in the public interest to ensure that companies with revenue over a certain threshold on an annual basis should be required to have their VAT returns certified by a licensed public accountant, of which there are around 200 in the country.
"Missing from the (VAT) bill is requirement for BICA licensees to sign off on VAT submissions. This may not be practical for registrants who file monthly, but where they have gross revenue in excess of, say, $1 million, it should be similar to how the business license is handled, where you are required to have a BICA licensee sign off on the form."
Osborne said that such a provision would be in the "public interest", while admitting it would also create more business for BICA members.
"It would be good to have a licensed accountant sign off and verify the amount being calculated as owed to government and claimed as refunds from the government," she said.
"There's the risk for miscalculation or fraud, but if you have a certified accountant looking at it, there's a lot more to lose from an accountant's standpoint, if they participate in any fraudulent activity. That should be a mitigating factor in helping the Ministry of Finance collect the taxes. I think we'd all like to have everyone pay their fair share."
The government tabled the revised VAT legislation and regulations in late July. The legislation calls for VAT at 7.5 percent, which the government has promised to bring into effect on January 1, 2015.
Calling the January deadline for implementation "kinda tight", Osborne said that BICA plans to be "educational to our members at the wider public, and we'll be an adviser to the Ministry of Finance as it relates to the accounting issues".
Osborne has been appointed to the VAT Advisory Committee, and BICA will continue to sit on the Central Revenue Steering Committee.
To date, BICA has two seminars planned - one in Grand Bahama and one in Nassau - to address VAT education in late September, while the organization also intend to focus on the new tax regime from an accounting perspective during its week-long conference in November.
Nonetheless, Osborne conceded the release of the bill is "coming at a bad time", given the fact that many professionals in the association and throughout key sectors of the economy go on vacation during the summer months; BICA itself just began a new term in July, meaning that officials have yet to fully organize themselves in addressing the issue of VAT.
"Our non-accounting concerns generally would be the inflationary effect on businesses who are coping with increased costs, the independence of the VAT comptroller and their ability to act swiftly and fairly across the board. But our interest will be primarily on accounting issues and assisting the Ministry of Finance in informing the public."
"Our concerns that are really relevant to BICA would be the handling of the accounts receivables, the efficiency of VAT office, for example, the refunds process, [and] the understanding of accounting entries, because there'll be some specialized accounting entries that will be new to the business community and our members need to make sure they understand fully how to account for VAT so they are able to assist clients," Osborne added.

Click here to read more at The Nassau Guardian