GOV’T LAUNCHES TWO-MONTH VACATION RENTAL REGISTRATION

THE GOVERNMENT is today launching a twomonth drive for all vacation rental owners to register their properties with the tax authorities by offering several financial incentives for them to do so.

The Department of Inland Revenue, in a statement detailing its long-awaited move, said the initiative was designed to ensure vacation rental properties pay their fair taxation share while also maintaining a high service standard for their guests.

Starting today, owners are being required to register their properties with it by April 30, 2023, via a newlylaunched online portal.

“There is a great need to regulate the short-term vacation rentals industry,” Shunda Strachan, the Department of Inland Revenue’s acting controller, said in a statement. “Currently thousands of short-term rentals within the country operate according to different standards.

“Many of these property owners are engaging in other forms of unregulated activities such as renting cars and boats without adhering to Bahamian laws.

We also have property managers overseeing properties without Business Licenses. These unregulated activities are circumventing tax obligations and having a negative impact on the local tourism market.”

Many vacation rental owners would likely beg to differ about the “negative impact on the local tourism market.” To incentivise registration compliance, the Government is dangling a variety of financial benefits such as a total exemption from 2023 Business Licence fees. Registration is being billed as free, and the initiative is also offering “free” promotion and the possibility to access financing via agencies such as the Small Business Development Centre (SBDC).

Simon Wilson, the Ministry of Finance’s financial secretary, told Tribune Business in a recent interview that the online portal has the ability to “go back several years” to collect data on the revenue, room rates and bookings that Bahamian vacation rental properties have enjoyed.

“We have identified close to 7,000 properties which are engaged in vacation rentals. The vast majority are in New Providence, Abaco, Exuma and Eleuthera,” he said. “The portal itself is very impressive in terms of the amount of information. We can go back several years to see what has been the takeup so that we can estimate revenue over the last two to five years.

“For some properties, we can go back to 2015. We can see what the room rates are over that time. We have a very nice tool which we think can help.” Mr Wilson said the revenue authorities were partnering with Avenu, a consultancy that works with state and local governments in the US and Canada to help them with tax administration, on the vacation rental initiative.

Ms Strachan, meanwhile, acknowledged the important role short-term vacation rentals play in increasing room inventory and expanding access to tourism ownership opportunities for Bahamians.

“We must strike a balance between regulation and fostering growth,” she added.

“Our immediate objective is to identify up to 10,000-plus short-term vacation rental properties throughout The Bahamas. This can be done through the simple act of registering, which will enable us to move forward with our plans to strengthen and promote the industry.”

Property owners are being encouraged to register via the vacation rental tab on the Department of Inland Revenue (DIR) website inlandrevenue. finance.gov.bs to become

CRUISE PORT HAILS NEW 28,554 VISITOR RECORD

NASSAU Cruise Port (NCP) hailed its latest visitor record with some 28,554 passengers arriving at its facilities yesterday on board six ships.

“We are extremely pleased to report another record-setting passenger day here at Nassau Cruise Port,” said Michael Maura, its chief executive. “The expanded berths are certainly delivering on the sizeable investment that we have made in them, creating the additional capacity required to achieve this extraordinary new record today.

“Incredibly, our record today does not include the crew count, which is an additional 10,302 people at Nassau Cruise Port. That’s thousands of visitors exploring downtown Nassau, learning about our island and culture through our restaurants, taxis and tours, and making wonderful memories of The Bahamas that will surely drive them to return.”

The six ships in port yesterday were Royal

Caribbean International’s Wonder of The Seas and Harmony of the Seas; Carnival Cruise Lines’ Mardi Gras; Celebrity Cruise Line’s Reflection and Beyond; and MSC Cruises’ Meraviglia

The Nassau Cruise Port will celebrate its $300m transformation with a May grand opening that features a weekend of private events together with local and international entertainment.

Head of Facilities and Maintenance

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When joining King’s College School, The Bahamas, you will join the family of the award-winning Inspired Education Group, the leading global group of premium schools, with over 80 schools operating in 23 countries. We offer a competitive salary and benefits and access to best practice and career pathways with some of the very best schools worldwide.

To apply please send a CV and letter of motivation to admin@kingscollegeschool.bs officially recognised by the Government. Registrants will be required to provide their name, detailed location of the property, real property tax assessment number, and other relevant details when registering on the portal.

Once registration is approved, vacation rental owners will then be eligible for various sources of funding for medium-sized enterprises through entities such as the SBDC, Bahamas Entrepreneurial Venture Fund and Tourism Development Corporation.

The Government is also exploring ways of highlighting registrants within the domestic and international tourism markets as official short term vacation rental providers.

Mrs. Strachan said: “We are asking the public to assist us in regulating this industry by complying willingly. Ultimately, as a result of these efforts, we will have more uniform standards, more consistent vacation rental experiences, expanded opportunities for property owners, increased government revenues from previously uncaptured sources, and an improved tourism product.

“If you are a property owner, it is in your best interests to register your vacation rental properties as soon as possible.” Members of the public seeking more information on the registration of their properties can contact the Department of Inland Revenue at (242) 225-7280.

The Government had initially been seeking to launch its registration drive in time for last May’s Budget. Chester Cooper, deputy prime minister, and also minister of tourism, investments and aviation, said then that the Davis administration will investigate the renting of boats and vehicles to guests by vacation home owners who lack the necessary licences and permits to do so.

Suggesting that such practices were especially prevalent in the Family Islands, he added that the Government was also moving to levy VAT on the full value of the vacation rental rate rather than just the commission paid to sites such as Airbnb and VRBO.

“I foreshadowed that the Government would look to tax in a meaningful way vacation rentals. There is already a Memorandum of Understanding (MoU) with Airbnb, and at the moment we are collecting VAT on the fee that vacation homes would pay. We are seeking to make an amendment so that the VAT applies to the entire amount of vacation rentals,” Mr Cooper said then.

However, the situation described by Mr Cooper was supposed to have been addressed by the Minnis administration in the original 2021-2022 Budget passed by the previous Parliament in June. It sought to extract an extra $31m annually from the vacation rental market by “levelling the playing field” as it related to taxation.

The VAT Act was changed to make clear to Airbnb and its competitors that taxes must be levied “on the full value of the rental”, rather than just the commission paid to their platforms. “We are amending the law to clarify that all vacation home marketplaces, such as Airbnb and VRBO, are required to pay VAT on rentals and commissions,” ex-prime minister, Dr Hubert Minnis, said then.

The Bahamian resort industry has long argued that vacation rentals should be taxed so as to create a competitive ‘level playing field’ with itself and ensure the sector also contributes to the upkeep of critical infrastructure that itself and its guests rely upon.