Government must move to improve tax enforcement and update and improve its customs duty collection at the border, Chairman of the Bahamas Chamber of Commerce and Employers' Confederation (BCCEC) Mike Maura told Guardian Business yesterday.
His comments came on the heels of Moody's releasing its latest report, in which the international credit ratings agency maintained the country's Baa3 rating, based on the country's prospects for debt stabilization, supported by the government's fiscal consolidation program, contained liquidity risk and the fact that The Bahamas' credit metrics remain in line with Baa3 peers.
Maura insisted that the collection of customs taxes "requires investment, if it is to return greater tax income". He added that customs and law enforcement have to tighten their screening activities in order to diminish the smuggling of drugs and weapons.
"The border, as an example, continues to be plagued by fraud and illegal activity," he said.
"The border is also in need of modern container and cargo scanning technology and a container examinations facility.
"This will directly assist customs and law enforcement in screening import and exports while the cargo and containers are still in the port. This will result in greater efficiency to the legitimate trading community, as they will experience less physical intrusion and delay in their supply chain process."
According to Maura, the government should expedite its electronic single window (ESW) project, which he said will "significantly improve the risk analysis and fraud detection capability of Bahamas customs". However, he added that the project has already been delayed, its completion pushed back from October 2017 to March 2018.
"The ESW system will not only serve to address fraudulent under-valued import declarations, but also serve to identify potential smugglers of contraband to include illegal drugs and weapons," he said.
Maura said he is also concerned that the country's value-added tax (VAT) rules have not been finalized, "and in some instances are not in line with international best practices".
"My worry is that our current fiscal state has resulted in a current VAT application which is not in line with best practices," he said.
"Too many VAT registrants complain of VAT refunds that are over a year old. And specific to the port, the application of VAT is convoluted and not in line with best practices."
Maura said when Moody's visits The Bahamas again, it will want to see evidence that improvements have been made in areas like energy.
"It is unlikely that they will provide us with another pass," he said.
"The Minnis administration has been focused on housekeeping. Fiscal responsibility must also be about investment in the economy. We need growth now."

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