COCKBURN TOWN, San Salvador — During a recent town meeting in San Salvador the Minister of State for Finance the Hon. Zhivargo Laing said the new Business License Act 2010 that passed in the House of Assembly would make doing business in The Bahamas a lot easier.
Mr Laing explained to residents that with the new Act, which will come into Force in January 2011, businesses are going to be taxable every year, and a business owner would only need to send in the simple form explaining how much they made.
“Once I know how much you made, I will be able to assess your taxes, and it is going to be a Business License Tax.”
“If you are making $250,000 or less a year, for the next two years, you will have no Business License Tax to pay because you are exempt under this new law.
“Before it used to be $50,000, but now it is $250,000,” Mr Laing said.
The Act will also take the power to issue business licences away from Family Island District Councils, he explained. In New Providence, the Secretary for Revenue, resident in the Business License Unit, will have that responsibility.
On the Family Islands, wherever, there is a Business License Office that office will be responsible, where there is no Business License Office, the Treasury Office will be responsible, or the Administrator will be responsible, acting on the power of the Secretary for Revenue. Further, Mr Laing noted that every year, thousands of businesspersons in the country are required to renew their license.
“That is going to be finished with under the new law,” he said. “Under the new law, in 90 days time, you will have to re-apply, re-register your business.”
Mr Laing said with this new process, a business is registered forever unless the owner sends in a form stating that the business has closed. If that form is not sent in, then the Government assumes the business is still in existence. The forms are also very flexible, he noted.
“With one form you can change the name of your business, the location of your business, and pay your tax.
“Attached to that form will be instructions on how to fill it out. It will also ask what kind of business you are seeking to go into, and will tell you what the pre-requisites are for applying for that business.”
Individuals will be told up front what they are required to do, so that they when they carry in the application form, they would have all the corresponding documentation and will not be given the run around. No one will be given a negative answer unless something is found untoward about the proposed business, he said.
“In which case, the Secretary for Revenue or the Administrator can refuse or reject your application,” Mr Laing said.
The Government has also stopped individuals from having to apply for several separate licenses. For example, before if persons wanted to open a restaurant, they had to apply for a business license, shop license, music and dance license and liquor license. Persons can now apply for their business license and once they have been successful the license will state that they are hereby licensed to do X, Y, and Z without having to run around applying for several licenses, he said. While businesspersons may not have to renew their license every year, they would have to file their returns, which will be due March 31, Mr Laing said.
“If you do not do so, you will not have a Certificate of Good Standing from us,” he added.
“Many times I am not able to collect money from you, but the information is important for me to know what is happening in this economy,” Mr Laing said.
“What is happening with San Salvador’s economy and if you fail to give me that information then I do not know how to make proper policy decisions on your behalf.”
With the new Act, if an individual objects to a decision that has been made by the Secretary to the Revenue concerning a business, they can go before an Appeal’s Board and not a licensing authority, he said.
In New Providence it will be comprised of seven persons, but in the Family Islands, it is going to be constituted of five persons, Mr Laing explained. The chairman and two persons will come from New Providence while two local councilpersons will sit on the Board and hear the appeal on the island where the complaint is being made, he said.
The Government has also decided to simplify the process of calculating the business license fee “Now we assess business license tax only on turnover. There will be no deductions, just that top line revenue, what you make, we will take a percentage of that,” Mr Laing said.
The Government used rates so that what business owners are paying now is what they most likely will be paying under the new Act.
“So most of you will most likely be paying less than what you are paying now, the same as you are paying now, or if you are paying more, it is really very small in comparison to what you were paying before,” Mr Laing said.