NASSAU, BAHAMAS — An out island boutique resort operator claims the government has lost "a ton" of annual revenue due to dragging its feet for more than five years over the regulation of the short-term vacation rental market.
Edwin Mulford, owner of Cat Island's Pigeon Cay Beach Club told Eyewitness News the recent announcement by the Department of Inland Revenue last week about mandatory registration was a "feeble move".
"The government has already lost a ton of revenue annually for dragging their feet on this for over five years now since this sector became lucrative, so now they initiate a feeble move," said Mulford.
The Department of Inland Revenue announced that all property owners operating short-term vacation rentals are required to register their properties in a newly launched portal by the end of April.
In a statement, the department said the end goal of the registration initiative is to ensure that all owners within the short-term vacation rental market are maintaining a high standard of service and meeting all tax obligations.
Mulford said: "The site only gets a property owner registered as a rental, that's it, with no mention of cost or further requirements as far as I see. What's the next step and how long will it take to implement?
"I see it as a request–only- for all to comply instead of a requirement with stiff penalties for non-compliance. Then there is the issue of policing which will be tough, especially when dealing with persons that use management companies and not Verb or Airbnb which can be traced–not to mention direct bookings and repeat guests."
He continued: "I saw no mention of licensing or acquiring a business license which in reality would be required by law, so what's the answer? For starters, all should be required to apply for a business license to operate, just like any business. This takes out registering which is a wasted step and can be done online."
Mulford said that in order for the government to ensure that it effectively regulates and taxes the industry it can either implement a per-bedroom annual fee/tax for each business license or have each obtain a TIN number and pay VAT on a quarterly basis."
In a statement last week Acting Controller of Inland Revenue Shunda Strachan noted that there is a great need to regulate the vacation rental industry.
"Currently thousands of short-term rentals within the country operate according to different standards," said Strachan.
"Many of these property owners are engaging in other forms of unregulated activities such as renting cars and boats without adhering to Bahamian laws. We also have property managers overseeing properties without business licenses. These unregulated activities are circumventing tax obligations and having a negative impact on the local tourism market," she said.
Click here to read more on the Eye Witness News website
