Businesses to receive $18 million in tax credits

The government has granted $18 million worth of tax credits to Bahamian businesses that kept more than 7,000 employees on their payroll levels during the COVID-19 pandemic lockdown measures, the Ministry of Finance revealed yesterday.

The move was a part of its Tax Deferral and Tax Exemption Program, which was implemented to provide businesses with the cash flow needed to preserve employment levels.

“As at July 20, 2020, the program saw the granting of $18 million of non-reimbursable tax credits and deferred taxes combined, thus resulting in the retention of more than 7,000 Bahamian employees,” the ministry stated.

Eligible companies, those with annual revenue above $3 million, must have committed to retaining 80 percent of their staff count as at February 2020; and must have a minimum of 25 employees to benefit from the tax deferral program.

The initial phase ended on June 30 and covered the period between April and June.

Approximately 200 companies were expected to benefit from the program.

“Given the continued uncertainty and economic challenges posed by the COVID-19 pandemic, the government has launched phase two of this program, extending and expanding it to all qualifying VAT-registered businesses with a turnover in excess of $100,000 (as opposed to the current $3 million floor). This will also include hotels in an effort to provide payroll support, encourage employee retention and thus eliminate the need for further layoffs,” the ministry noted.

“Businesses that may have received assistance under phase one may also benefit from phase two and are also encouraged to apply. It is important to note that tax relief approvals will be based on staff complement rather than the turnover of businesses as previously granted under phase one.”

Businesses that are not eligible to receive assistance under the tax deferral program include food stores and food wholesalers, pharmacies and related wholesalers, gaming houses, banks and financial entities, insurance companies and the regulated telecommunications sector.

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source https://thenassauguardian.com/2020/07/24/businesses-to-receive-18-million-in-tax-credits/