legal fraternity against tax clearance certificates
The legal fraternity here is suing Government over some aspects of the tax clearance certificates, a measure announced in the June 15 Financial Statement and Budgetary Proposals aimed at ensuring all professionals pay their fair share of taxes.
When he delivered the budget in the House of Assembly Minister of Finance Chris Sinckler announced that, with immediate effect, persons covered under the Profession, Trade and Business Registration Act would be required to produce a valid tax clearance certificate from the Barbados Revenue Authority (BRA) in order to renew their licences to practice here.
Sinckler said once this was done, it would broaden the tax base, allowing Government to collect enough revenue to run the country while lowering the tax rates.
But the Barbados Bar Association is concerned that the strict requirement for a certificate in order to practice has serious implications for the right of attorneys to work.
“We are going to bring a constitutional motion against the Government. We met with Sinckler and he wouldn’t change his mind on it. It has serious implications,” a senior attorney with intimate knowledge of the proceedings told Barbados TODAY this afternoon.
“Can you imagine having a dispute with the Inland Revenue Department or VAT Department and they don’t give you a tax clearance certificate and you can’t practice? It is as serious as that. It affects your right to work,” said this lawyer.
The senior attorney contended that this did not mean they objected to paying taxes.
“But you can’t stop a man from working because you have a dispute on tax with the Government. Under the VAT Act, if you have a dispute, you can go to a tribunal, then you can go to the court, then you can go to the Court of Appeal. You might even end up in the CCJ. So that dispute may be 10 years in the making and you can’t work . . . and it’s not just lawyers, it’s all professionals,” he explained.
In his June 15 financial statement, Sinckler noted that there were some loopholes in the law which had previously prevented BRA from effectively bringing a larger group of non-salaried or independent professionals into the tax net.
“This has been a longstanding bugbear for tax administrators in Barbados as these individuals still have full access to, and utilize all of the public goods and ‘free social services’ and amenities which our country so generously provides,” Sinckler stated then.
The minister also announced at the time that there would be a reduction in the fees and licences for small and medium-sized enterprises. He said these would decrease by 25 per cent this year and a further 25 per cent next year.
In spelling out the professions that would benefit, Sinckler listed the general wholesale sector, which will pay $7,500 from this year, down from $10,000 and a further reduction to $5,000 next year.
He said wholesale licence fees would fall from $5,000 to $3,750 this year and to $2,500 next year, while retail would decrease from $1,000 to $750 before being reduced further to $500.
President of the Bar AssociationTariq Khan could not be reached for comment.