The government has indicated that it will not shift from January 1, 2015 as the date to institute the value-added tax (VAT) regime, and, with the November 31, 2014 deadline for registration looming, the possibility of hundreds of thousands of dollars in fines and even possible jail terms for non-compliance is growing more and more concrete.
Guardian Business understands that the government may take a hard line in this matter.
The VAT Act and the attendant regulations allow the government to impose fines or jail terms - in some cases both - for a bevy of offenses, both administrative and otherwise. The government has even given itself a "just in case" option: Section 38(5) of the regulations provides that the government is allowed to fine a person up to $10,000 or imprison that offender for up to two years for contravention of, or failure to comply with, "any provision of the act or regulations for which no penalty is described under this part".
General offenses
The VAT Regulations 2014 allow a fine of up to $50,000 or a prison term of up to two years for "wilfully" evading VAT; improper collection and advertisement of VAT; impeding the comptroller or a VAT officer in the administration of the act or for failure to comply with a requirement of confidentiality.
Persons can be fined $1,000 for each false statement or failure to disclose information in a misleading manner (Section 92).
Other offenses
VAT registrants who contravene the VAT-inclusive pricing regime feared by the Bahamas Federation of Retailers (BFR) - or break other pricing rules - face up to $100,000 in fines, as much as a year in prison or both a fine and jail term. Failure to display a valid VAT registration certificate in a conspicuous place carries a maximum fine of $50,000 plus a year in jail.
Failure by taxable persons to register, face a maximum fine of $100,000 plus a year in prison. The same applies for a taxable person who leaves or tries to leave The Bahamas for an extended period without settling the VAT bill, and for a hotel or other person responsible for administration of condos that form a pool or other collective rental arrangement and fails to register.
Unregistered taxable persons who collect tax or issue VAT invoices, or fail to pay and account to the VAT department for VAT on taxable supplies and imports, face a maximum fine of $250,000 plus a year in prison. The same goes for an importer of taxable goods or services who fails to declare and pay in the prescribed time and for submissions of improper declarations.
The first schedule of the Value Added Tax Regulations 2014 contains 50 offenses for which the government can levy fines described as either "minor", "serious" or "very serious".
Section 96(h)(i) of the Value Added Tax Act 2014 sets a limit of $500,000 for penalties levied against those acting in contravention of the act, or not in compliance with it. For those who contravene or fail to comply with the VAT rules, the law allows a penalty of up to $300,000. Administrative fines are not to exceed $150,000.

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