Government owed more than $350m in taxes and fees
More than $350 million in unpaid taxes and fees is owed to the Government, the Minister of Finance revealed yesterday.
Curtis Dickinson warned that almost half the cash would probably never be collected.
He was responding to questions from Opposition leader Cole Simons on the total of unpaid accounts receivables for Government’s consolidated fund.
Mr Dickinson, speaking in the House of Assembly yesterday, said that the balance at the end of the last financial year stood at $357.6 million.
He added that $158.38 million – 44 per cent – was listed as “doubtful accounts” – money never likely to be collected.
Mr Dickinson said that the figure increased gradually over several years.
He highlighted that in March 2017, when the One Bermuda Alliance was still in office, uncollected revenue stood at $285.34 million.
Mr Dickinson said the figure was “wholly unacceptable” and that the Government had hired consultants to help collect the debts.
He rejected suggestions from Mr Simons that Government had “written off” some of the unpaid revenue.
Mr Dickinson said: “It has never been Government’s practice to ever write anything off its books with regard to accounts receivables. With respect to the last three years the answer is zero.”
But he added: “I can tell you that there is considerable work that needs to be done with respect to the management of accounts receivable.
“Government is currently without an Accountant General and also a vacancy for an assistant Accountant General post currently is open.
“I said in my first Budget statement that it is wholly unacceptable that monies owed to Government are not being collected as aggressively as they need to be. Renewed focus will be placed in this area.”
Mr Simons later condemned the figure and said that it was far higher than the initial estimate of $100 million.
He said: “With the latest statistics being just released, we now understand that from 2018 to 2020, for each year, Bermuda’s gross receivables hovered around $333 million, with an average annual provisional reserve allowance of $141.25 million, which is an allowance for doubtful amounts.
“The result is that government believes it will only actually be able collect approximately $200 million dollars.
“The problem is so chronic, that the Minister of Finance has had to engage the audit firm PwC and another firm to manage the recovery process.”
Mr Simons accused the Government of a failure to tackle the problem “in an expeditious manner” and reduce Bermuda’s debt burden.
He said: “By not collecting these funds, the Government cannot address or deliver the services that the people of Bermuda voted to receive, such as the development of infrastructure projects like school and road repairs or issues associated with healthcare, pensions, youth programmes and many other social initiatives.
“It is obvious that the Minister also believes that this is unsustainable, as it negatively impacts the unabated level of debt that the country currently enjoys.
“Given this glide path, the Government will have no choice but go back to the banks and capital markets to finance its debt.”