A “compliance officer,” as required under the Financial Reporting Act 2000, should be mandated for travel agencies collecting departure taxes on behalf of the Government, Senators were told on Monday.
While supporting the Passenger Tax Act Amendment before the Senate, Senator Michelle Pindling-Sands expressed her concern over the apparent “lack of accountability” with respect to the collection of revenue generally.
The purpose of the Act to Amend the Passenger Tax Act is to establish certain procedures and mechanisms to ensure the collection and payment of passenger and ticket taxes.
The country is facing fiscally challenging times because of external forces and internal realities, Senator Pindling-Sands said, but “There appears to be a lack of appreciation for the direct relationship between government revenue, the collection of government revenue and government expenditure. The government could only operate on what funds it has collected and if it fails to collect then it can’t provide.”
She said that while The Bahamas has no control over what affects its revenue outside the country, it can however, control what happens within the country. The introduction of the Bill, she said, does exactly that.
“What our people should be most outraged about,” she continued, “is the fact that Departure tax, unlike Real Property tax, is perhaps the one tax that Bahamians, or rather the traveling public willingly pays, because… we are ready to travel and don’t want any hiccups in our plans at that time.”
Bahamians want things to happen instantly, she observed. But, she noted, if there is no relationship between the government’s ability to collect revenue and its ability to provide much needed services and fund projects, then there should be no surprise when the country learns about neglect and disrepair at the Prince George Dock and Nassau International Airport.
Reiterating her support of the Passenger Tax Act, Senator Pindling-Sands suggested that a similar approach as in the Financial Transactions Reporting Act be made.
Those who will have the responsibility for issuing tickets and handing the tax over to the Comptroller of Customs, should identify within their travel agency and to the Comptroller of Customs a particular person whose responsibility it will be to ensure full compliance with amendments proposed under the Bill, and the compliance officer should be made responsible for ensuring that a similar paper trail is created.
The Financial Transactions Reporting Act, 2000 was designed to combat money-laundering. The law requires banks, trust companies, law firms and accounting firms – institutions which hold moneys ostensibly for the account of someone else and not for their own account – to appoint a Compliance Officer.
“What I am suggesting is that we take away all discretion of persons who have the responsibility of determining what and how much ticket and passenger tax is paid to the Comptroller of Customs,” she said.
“I have heard it argued that all this amendment is now doing is taking away the discretion from the airline and transferring it to travel agents. I am suggesting that to avoid making the same mistake, that is should be incumbent upon the travel agent and the compliance officer in the travel agency to ensure when making a booking, that no ticket be issued until the ticket agent or compliance officer verifies the identity, status and ages of all persons traveling,” Senator Pindling-Sands suggested.
Before a ticket is issued and paid for, she said, the travel agent must ensure that valid passports or birth certificates of other travel documents be produced immediately for booking. That way, if a diplomat is traveling, that information would be stated on their travel document.
This three-step approach, which includes the verification of the identity of the traveler is particularly important in cases of group travel and in cases where travel arrangements are made by telephone where the ticket is charged to a credit card, or where the traveler has no cause or reason to personally set foot in the travel agency, the Senator said.
“This three-step approach eliminates the ability of the Passenger Tax Confirmation Report and Passenger Manifest to be completed at the discretion of the person with responsibility for completing the form,” Senator Pindling-Sands said.
If the Bahamas does not react seriously to accountability, the country will continue to suffer dislocations in the economy, which can be avoidable. This, Senator Pindling-Sands said, is a measure that can go a long way toward expanding and shoring up the existing revenue base.
By Khashan Poitier, The Nassau Guardian
