SBA head: What about our tax returns?
With millions of dollars still owed to businesses and individuals in the form of VAT refunds and income tax returns, concerns have been raised that today’s ministerial statement did not address the issue.
In presenting the statement in Parliament today, Minister of Finance Chris Sinckler announced that Government had decided to offer “a short term amnesty to all taxpayers across all tax categories on the interest and penalty accrued on taxes owed at December 31, 2014”.
He said access to this facility would be on the basis that the taxpayer pays the total outstanding principal owed to the Barbados Revenue Authority (BRA) on or before March 15, 2015.
Sinckler also promised a review of the Municipal Solid Waste Tax.
While welcoming the amnesty and proposed tax review, the Chief Executive Officer of the Small Business Association (SBA) Lynette Holder said she was concerned that “nothing was said in the statement to address the monies owed by Government to small businesses”.
“We have been lobbying and intervening on the part of members relative to outstanding VAT refunds. I have seen documentation where Government owes many small and medium enterprises [as little as] $20, 000 and [as much as] $70,000. I am talking about months in VAT refunds.”
However, she lamented that there no word forthcoming on this “and no effort it would appear to try to bring some relief to the sector and nothing in this statement.
“While we welcome an amnesty that is to those who owe Government, but what about those businesses that Government owe? Nothing!”
The SBA head acknowledged that Government had a cash flow problem.
However, she pointed to a programme that was set up to assist small businesses with getting payment for products and services that they provide to Government agencies, saying that a similar facility could be set up to assist with the payments of VAT refunds.
While acknowledging that many businesses owed Government, Holder said she was more concerned that many small enterprises were depending on Government refunds to stay afloat.
“When I look at the Ministerial Statement that is the concern we have. It is a bugbear it is a serious impediment to effective cash flow management and the maintenance at this point of a profitable entity,” she added.
Meanwhile economist Ryan Straughn said it was interesting that Government chose to offer an amnesty for taxpayers but made no reference to the refunds in the statement.
“In a situation like this, you really shouldn’t have an amnesty because any tax that you may owe to the Government should be offset against anything that they owe you. So the truth is that the concept of an amnesty really doesn’t make a lot of sense unless it is the case that they are of the firm belief that people owe them substantially more than they owe people, which at this point is questionable,” said Straughn, who felt it was “unreasonable” for the Government to expect people to pay their taxes when it was not meeting its financial commitments to them.
“It is a concern and he [Sinckler] should have provided some reasonable response to that, and the truth is that he didn’t, other than to admit that the programme is not working.
“That is the biggest reflection of it. I think that again when it comes to the ability to plan, if you are not getting your income tax refund for 2014 in as timely a manner as possible, and you are saying that [the revenue measures are] going to continue beyond April 2015 – and he did say that the budget is going to come in April, which doesn’t make sense – but if the budget comes in April, it means then there may be new taxes given the talk about widening the base on certain things. It is disappointing,” added Straughn.