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Bahamas: Fraudulent Invoices Hit 29% Of Bahamas Trade

The Ministry of Finance’s top official yesterday admitted there is “substantial” revenue loss from fraudulent invoices that are impacting up to 29 percent of The Bahamas’ trade.

Marlon Johnson spoke out after Global Financial Integrity (GFI), an advocacy group that acts as a watchdog on “illicit financial flows”, unveiled a report showing The Bahamas has one of the world’s highest rates of customs duty and “border” VAT leakage due to the practice of submitting phony invoices that significantly undervalue import shipments.

Basing its findings on United Nations (UN) and International Monetary Fund (IMF) data, GFI found that more than one-quarter of The Bahamas’ goods trade with advanced economies such as the US and Canada was impacted by such tax evasion practices.

Branding this as “trade misinvoicing”, GFI said: “Several nations have trade misinvoicing levels significantly higher than the global average, including: Sierra Leone (39.8 percent), Georgia (34 percent); Botswana (31.1 percent); Maldives (29.6 percent); Ethiopia (29.3 percent); The Bahamas (29 percent); and Cameroon (26 percent).”

Employing two different evaluation methodologies, the GFI report said one estimated that “underinvoicing” affected almost 64 percent – nearly two-thirds – of incoming import shipments to The Bahamas. With this nation’s total physical goods trade pegged at $4.646bn annually, it added that some $2.994bn was being impacted by fraud-related tax evasion.

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