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TUESDAY, JUNE 10, 2025
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Ex-minister: Reforms let tax authorities ‘run amok’ By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
• D’Aguilar hits VAT credit restriction, DIR power A FORMER Cabinet minister is accusing the • ‘Making it more difficult’ Government of devising for law-abiding firms laws that permit the tax authorities to “run amok” over law-abiding busi- • ‘We’re not all criminals’, nesses who are constantly placed at a disadvantage. don’t treat us as such Dionisio D’Aguilar, ex-minister of tourism and aviation under the Minnis administration, told Tribune Business that the changes to VAT and other tax-related legislation accompanying the 2025-2026 Budget are reinforcing the belief that the Government is focused on “designing systems that make it more difficult” for tax-compliant businesses to invest and grow. Asserting that “a new level of bureaucracy” is seemingly being imposed on the Bahamian private sector “every single day”, the Superwash principal, who has multiple other business interests, said politicians then turn
round and “wonder why” the Bahamian economy’s annual growth is projected to slow to 1.7 percent, and then remain flat at 1.6 percent, over the next three upcoming Budget cycles to 2027-2028. And, while agreeing that the Department of Inland Revenue must be “empowered” to collect all outstanding taxes due to the Government, Mr D’Aguilar told this newspaper that existing laws as well as the reforms tabled in Parliament alongside the Budget “give them all the power to the detriment of the business and consumer”.
In particular, Mr D’Aguilar pointed to the existing statutory requirement that businesses must pay over the entire VAT sum that is in dispute before they can challenge the Department of Inland Revenue’s assessment before the Tax Appeals Commission. Suggesting that the uncertainty, time and expense associated with mounting such challenges means many businesses elect not to bother, he also argued that those who succeeded often faced a long wait to recover their funds - the exact opposite of tax authority demands that
DIONISIO D’AGUILAR taxpayers make timely payments in full. And, besides pointing out what he hinted were double standards, Mr D’Aguilar also slammed proposed reforms that effectively mean Bahamian businesses will have to close down before they can claim a refund of VAT credits if these are not used up in the tax reporting immediately after the one in which they were created. He added that “no rightthinking, decent Bahamian will think that’s right”.
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• Fiscal Report: Bill ‘expected to be tabled’ • Taxpayer pension payouts to hit $238.1m • Fears will ‘crowd out’ public service spend
THE Government is “expected to table in Parliament” legislation to tackle unfunded civil service pension liabilities - forecast to hit $4.1bn in only seven years’ time during the current Budget debate. The just-unveiled Fiscal Strategy Report 2025, which has been seen by Tribune Business, identifies the public sector pension ‘black hole’ as a “significant structural risk” that is projected to require a near-$50m annual increase, or 25.5 percent jump, in annual Bahamian taxpayer funding over the next four fiscal years to 2028-2029.
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
SIMON WILSON
DAVID MORLEY
CARLA SWEETING
real estate sales and nor are they responsible for legally closing transactions. Pointing out that these duties fall to attorneys, not realtors, she suggested that the Government could employ a much easier
method to check whether it is receiving the full VAT due on a Bahamian property transaction. This, Ms Sweeting explained, would involve imposing a legal requirement for attorneys to submit the VAT invoices
they receive from realtors to the Department of Inland Revenue. Realtors typically invoice attorneys for their commission, which is normally 6 percent of the purchase
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Ex-AG’s warning of ‘disastrous consequences’ on law’s reform A FORMER attorney general is warning that legal reforms intended to combat real estate-related VAT evasion will have “disastrous consequences” for the industry and all related sectors if passed as is. Sean McWeeney KC, now consultant counsel at Graham, Thompson & Company, in an e-mail analysis seen by Tribune Business sounded the alert that, if proposed changes to the Conveyancing and Law of Property Act are not altered, they threaten to create multiple “title woes and legal controversies” when the Government’s new fiscal year begins on July 1.
The report reiterates that, if not addressed, the unfunded civil service pensions will “exert increasing pressure on the fiscal balance” and “crowd out resources” needed for investment in critical public services, such as education, healthcare and national security, plus infrastructure upgrades. However, there has been no mention yet of the proposed Pensions Bill’s House of Assembly tabling so far during the 2025-2026 Budget debate. Instead, Prime Minister Philip Davis KC announced an imminent salary increase for civil servants, with ‘middle managers’ set to enjoy a rise in their endJune pay cheques. And
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Realtor’s commission bid on $57m sale dismissed
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
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Budget debate awaiting unfunded $4.1bn civil service pension reform
By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net
BREA: VAT reforms ‘unequitable’ in law THE Bahamas Real Estate Association (BREA) has warned the Government it is “unequitable in law” to impose the compliance burden, and related penalties, for property sales VAT on its members. Carla Sweeting, BREA’s president, in a letter sent to senior tax officials prior to the four-day holiday weekend argued that proposed reforms to the VAT Act are unfair to Bahamian realtors because they do not handle any funds related to
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Asserting that the present Bill should be “abandoned”, he added that its intent - rendering all real estate transactions closed since July 1, 2022, “void” unless they have been recorded in the Registry of Records - creates numerous unanswered questions such as whether, and how, a “void” conveyance can be “resurrected from the dead” and brought into compliance with the amendment. Mr McWeeney, acknowledging the Government’s legitimate desire to promptly collect all VAT due on real estate sales, amid the belief that it is losing $100m in revenue per year to avoidance and evasion in this area, argued that the problem could be tackled by reform
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A BAHAMIAN realtor’s bid to be paid a 4 percent commission on the $57m sale of a prominent Lyford Cay property has been dismissed by the Supreme Court. Diane Holowesko, former Town Planning Committee chair under the Minnis administration, had sought a court declaration and Order that she was entitled to be paid a $2.28m commission plus VAT for arranging the April 2022 sale of the nine-bedroom, 11-bathroom Harbour House that covers two acres at Lyford Cay’s marina entrance. However, senior justice Deborah Fraser, in a June 5, 2025, verdict rejected Mrs Holowesko’s claim and ruled in favour
of the purchaser, Fabio Mantegazza, a Swiss businessman described in media reports as being “fabulously wealthy”. His father, Sergio, is said to have founded and launched the Cosmos Holidays travel firm, and at one point also owned Monarch Airlines. The judge, while acknowledging that Mrs Holowesko may have been placed in “an unfortunate position”, found the latter was not due the 4 percent commission because she was unable to meet the agreed contractual stipulation that she close Harbour House’s $57m purchase by Mr Mantegazza no later than 10pm on the same day she was formally engaged. However, the very next day, the corporate entities acting as directors
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Gov’t touting vendor arrears cut, eyes accounting switch By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net THE GOVERNMENT says it has further slashed payables owed to its vendors by a sum equal to 0.4 percent of gross domestic product (GDP) as it bids to switch to accrual-based accounting within two years. The just-released Fiscal Strategy Report 2025 discloses that the Davis administration cut its arrears payables to the
equivalent of 1.7 percent of nominal economic output at year-end 2024, as opposed to 2.1 percent one year earlier, while acknowledging that its unpaid bills still represent a significant fiscal risk. Based on nominal GDP figures for the 2023-2024 and 2024-2025 fiscal years contained in the Government’s Budget data, these percentages translate into $272.952m in outstanding arrears or
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