On Monday, 30th March 2020, the Deputy Prime Minister and Minister of Finance, the Honourable K. Peter Turnquest addressed the House of Assembly to provide an overview of the expected economic fallout in The Bahamas from the Covid-19 pandemic along with some details as to the Government’s proposed stimulus measures to support citizens and businesses alike during this time of uncertainty. In doing so, certain tax credit and deferral programmes were announced to incentivize employers into retaining a significant workforce and discourage the specter of mass layoffs and redundancies in businesses that qualify.
Under the Tax Credit & Tax Deferral Employment Retention Programme (“Credit and Retention Programme”), as it is termed, the Government set out it’s policies with the hope of providing qualifying businesses with payroll support in an effort to retain up to 10,000 full-time paying jobs. Under the Credit and Retention Programme, the following criteria must be met:
- Business must have an annual turnover of $3 million or more and must have a minimum of 25 non-executive employees.
- A business must commit to the retention of 80% of its employees as at the end of February 2020 through to the end of October 2020.
- Additionally, the business must be in good standing with the Value Added Tax Department or Business Licence payments as at February 2020 (i.e. a Tax Compliant Certificate will likely be required).
- Not involved in the retail or wholesale grocery, hotel and resorts, regulated financial and insurance entities, regulated telecommunications businesses and gaming businesses.
Once a business meets the above criteria, they would be classified as a “Qualifying Business” and eligible to receive on approval up to $200,000 per month for up to three months. Once a qualifying business is approved at the maximum funding level, then one half of that monthly sum, or up to $100,000, will be in the form of a non-reimbursable tax credit. The other $100,000 will be deferred until 21stJanuary 2021 when it will be paid back by that qualifying business in equal interest free monthly installments over 12 months.
This is certainly an additional option now available to employers to assist in the preservation of jobs as the Government has now undertaken to underwrite the cost of 50% of the payroll of qualifying business for up to 3 months.
For further guidance on the roll out of this new option, please refer to https://inlandrevenue.finance.gov.bs
Dwayne Fernander, Partner – [email protected]
John Minns, Partner – [email protected]
Sydney Rolle, Associate – [email protected]
Please note that this publication is only a guidance note and as such is for reference purposes only, it does not constitute legal advice and should not be relied upon as such. Specific legal advice about your particular circumstances should always be sought, and our legal team is available to assist you with any questions or issues that you may have.