The Department of Inland Revenue (DIR) has moved out of a season of ease of doing business and turning out business documents extremely fast, and is now in a season of ensuring the government's revenue is collected, or punitive measures are taken against businesses that are non-compliant, DIR Acting Controller Shunda Strachan said yesterday, adding that the DIR will begin to use its powers of enforcement much more.

Strachan, who made the comments during a press conference at DIR's offices, said while the department reported arrears of more than $1 billion a few months ago, that number has dropped to $875 million.

She said the department's recent action of carrying out its first search and seizure of businesses on Harbour Island has done a lot to convince other Bahamian businesses that the DIR has tightened enforcement.

"You have not seen this level of enforcement before," said Strachan. "But it is critical now. As the country moves in a particular direction, and our expenses increase, we need the revenue in order to satisfy those expenses.

"And so while the Department of Inland Revenue doesn't deal with expenditure per se, we do deal with revenue collection. And when you're getting to the point where, okay... so probably a couple of months ago, we reported our arrears are over a billion dollars. And we took that very seriously.

"And really, it's for us to bring that those arrears down. So, while arrays are continuously added to the bucket, and there's an upward kind of action going on, we really don't want those arrears to be in the billions. But, it's still alarming that we have such great arrears out there.

"Real property tax is still leading the way. So we still have more than $600 million in arrears for real property tax. But value-added tax [VAT] is the new tax. And I don't know if you remember, when we implemented that, it was said, 'oh, we won't allow that [VAT] to be another real property tax'. And so for us to ensure that we keep on top of things relative to our arrears, we really have to use the powers of enforcement."

Strachan said DIR has frozen and garnished "quite a bit" of bank accounts and will be enforcing the myriad fines that the department can levy against a business or individual for non-compliance with tax laws.

She said DIR recently found ten courier services to be non-compliant in their tax obligations and denied them access to the packages they imported for customers until they made arrangements with the DIR to correct those infractions.

Strachan added that some businesses have been found operating without business licenses, while others collected VAT but did not remit it to the DIR.

She explained that fines for infractions can range from $5,000 to $150,000.

She said the department has more search and seizure operations planned, as the DIR continues to go after the government's revenue.

"As I said, throughout the Commonwealth of The Bahamas, we will be doing things weekly, bi-weekly," Strachan said.

"We do have other operations planned. And so it's got to be a consistent thing.

"We do know that in order for it to be successful, meaning in order for persons to maintain and keep current with their obligations, we really have to be more active.

"I think that has been something that we did learn from the private collectors, the more you contact, the more you are out there, the more likely it is for businesses to remain compliant or to do the right thing."

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