Inland Revenue has been garnishing accounts since early April

Chester Robards- Nassau Guardian

The Department of Inland Revenue (DIR) has made good on its promise to begin garnishing the bank accounts of businesses that are severely in arrears and have not made arrangements to correct their debt to the government, DIR’s Head of Communications John Williams told Guardian Business yesterday, adding that this has been done to “many” businesses since early April.

Minister of Economic Affairs Michael Halkitis also told this paper yesterday that garnishing bank accounts is done in only…most extreme circumstances, where “some people basically give the government the finger when it comes to taxes”.

A photo was making its way across social media yesterday with the author of a post complaining that a company’s staff members were unable to be paid recently because the government had frozen the business’s account.

Williams explained that accounts have not been frozen per se, but have had holds placed on them and in some cases money garnished for unpaid taxes.

“DIR has been sending out garnishing notices to banks and financial institutions with regards to accounts, many that are significantly in arrears with any taxes, but specifically VAT (value-added tax),” said Williams.

“The actions were not to freeze any account, but for banks to remit funds to us for businesses that had serious VAT arrears.

“In instances where the VAT arrears was paid off or a payment plan was entered, the DIR releases the hold on the business’s bank account.”

Williams said in a typical timeline of events, a hold is placed on a businesses account and the owner notified that DIR is about to garnish that account.

He said if the owner comes in to DIR to correct the debt issue, the money is not immediately taken. However, if the owner does not contact DIR, the money owed is moved from the account.

Halkitis said this action by the DIR is not a first resort action against a company, but a last resort when “cajoling and begging has failed”.

He said some business go so far as to charge VAT, collect it and never remit it to government.

Two companies on Harbour Island were recently audited and raided by DIR for serious infractions against the country’s tax codes. In those raids the government seized 30 golf carts, three sea craft, and information from computers from one business; and from another 102 cases of Pink Sands beer, 21 bottles of Vodka, boats, cars, golf carts and two Mercedes vehicles.

At least one of the businesses was accused of charging VAT and never remitting it to the DIR.

“You’re talking about some hard cases where people just want to ignore the law,” said Halkitis. “The government can’t sit back knowing that people actually collect VAT from the public, and refuse to remit it to government. I mean the government has to use the tools at its disposal to make sure that they collect the money.”

The DIR and the government’s Revenue Enhancement Unit have begun working hard to ensure all of the state’s revenue is captured, and the recent Harbour Island seizures was the first in what the DIR has said in past communications with the public will become a no tolerance approach to tax non-compliance or evasion.

Last year, Acting Controller of the Department of Inland Revenue Shunda Strachan warned that the government would garnish the wages of those who have been delinquent in paying their taxes.

She warned in January that while the DIR did not garnish any wages between last year and the beginning of this year, “garnishing is coming”.

Strachan specifically mentioned garnishing the income of landlords who are delinquent in paying their real property tax, but who still collect rental income.