Penalties waived

$1 billion tax amnesty approved

Government is owed close to $1 billion in outstanding taxes, and today Parliament paved the way for the recovery of at least some of this amount by waiving all penalties.

The House of Assembly approved amendments to the Income Tax Act to formally and legally accommodate an amnesty announced by Minister of Finance Chris Sinckler in August for the period starting September 15, 2016 through to February 15, 2017, which in essence will result in the waiver of all penalties and interest for outstanding taxes paid during the stipulated period.

Contributing to the debate this morning Sinckler said Government had gone out of its way to grant the amnesty, adding that this was perhaps the third time the Democratic Labour Party administration had offered such a programme since taking up office.

He said Government took the decision against the background of how much it was owed, as well as its understanding of the difficulties facing companies and individuals.

“We are, from time to time, looking at the number of arrears that we have built up in Government over many years, and it really runs into the hundreds of millions of dollars, probably even closer to a billion dollars. I really don’t know what the exact figure is now. The last time we had a general check on that I think it was somewhere in the vicinity of $700 or $800 million, it could be more by now.

“And that is some of the active ones. There are some of the inactive ones that haven’t been dealt with for decades now. Even though we haven’t in the accounting system written them off, they are deemed now, generally even by way of oral discussion, to be considered to be unrecoverable reliabilities,” Sinckler disclosed.

Therefore, the minister said, not only would the amnesty help businesses and individuals, it would also assist Government in recovering some of what it was owed.

“Of course it helps [Government] as well because the
more money the Government can get in on a cash basis the easier it makes the life of the Government in meeting those demands, which of course are ever more . . . sophisticated
from the public of Barbados for various goods and services from the state. There is a correlation between the two,” he stressed.

Warning that “another amnesty will not come for a very, very long time to come”, Sinckler advised those who had not yet taken advantage of the reprieve to follow the lead of those who had and pay up.

In his August 2016 Financial Statement and Budgetary Proposals, Sinckler had announced an amnesty across all tax categories – Value Added Tax (VAT), Income Tax and Land Tax.

“Using data from VAT and Land Tax alone, and considering the outstanding taxes of $568 million, it is expected that for the financial year 2016/2017 an amount of at least $15 million may be collectable, based on past experience,” he said at the time.

During today’s sitting, Sinckler announced Government would introduce legislation, including amendments to the Barbados Revenue Authority Act, to introduce a single taxpayer identification platform, which would allow for a single tax clearance certificate across all of the tax categories.

“We are going to move to amend the law that there be one tax clearance because there will be one taxpayer ID system. You will have a tax number that will be your number in the system whether you are paying VAT, income tax, excise tax, land tax or whatever the case may be. Therefore when that system is done and you are given that number, you will be required by law to get, for purposes of business transaction, a tax clearance certificate. It will be a tax clearance certificate issued on all,” he explained.

Parliament also amended the Land Tax Act to accommodate the ongoing amnesty.

9 Responses to Penalties waived

  1. Smith Maxine
    Smith Maxine December 14, 2016 at 2:19 am

    Wrong move Chris!

    Reply
  2. Hal Austin December 14, 2016 at 3:06 am

    Another amnesty for rogue taxpayers. This minister is a bad joke. Once again, this is transferring wealth from the poorest to the well to do.
    Small family-owned businesses should pay their taxes or be given three months to close down. They do not provide that many jobs, and most of them go to family members and friends.
    If self-employed professionals who do not pay within the same period they should have their permissions to practice withdrawn.
    Most low and medium paid people are on PAYE, their taxes are deducted at source.
    How can any reasonable government be owed nearly Bds$1bn in outstanding taxes, yet is prepared to underwrite (read pay) $12m to refurbish a relatively new hotel?

    Reply
    • Eugene December 14, 2016 at 7:02 am

      I like a person like you! Who are the well to do that have small businesses? Youare obviouly a Public Sector person, who hard or soft, work or not, will be paid. Small businesses struggle to stay afloat, and believe it or not, may not owe taxes because they have such losses. Some self employed persons barely make a living, but they continue because they do not want to have to depend on social services for handouts. You obviously know a lot of wealthy self-employed or small business owners. Check their accounts!!! They are probably in a hell of a lot of debt just to survive.

      Reply
    • Babsie December 15, 2016 at 2:18 pm

      Your government is calling upon young persons like myself to open their own businesses, what would you call that (not a small business).

      Second point closing small family business for failing to pay taxes and they should be given 3 months to close (your words).
      You would be doing the same thing the government did to the NCC and debushing workers which has resulted in the lost of income to the workers and a big lost of TAXES and NIS to the government.

      Reply
  3. Sheron Inniss December 14, 2016 at 6:33 am

    So what about the rogue government that owe tax payers money. I would like to know how much they owe. Do you know it is almost March again and some people are still waiting on income tax returns. And Hal what about the government entities that owe. Steupse

    Reply
  4. jrsmith December 14, 2016 at 6:43 am

    This is the end product of a government not governing, not managing , not caring .. What is the issue around (VAT) and its collection , in countries where taxes is enforced and reasonably organised ,apart from ordinary taxes , the collection of and non payment of (VAT) is deemed criminal and fraudulent , I know of small business people spend prison time in the (UK) for not paying vat……
    The trouble we are bordering on the edge as like Greece, all thats needed the efficiency in collecting the taxes , the friends and family and party members attitude is gradually eroding the fair and honest democracy for some bajans, you cannot have a law for them and a law for us and because the so and so has hit the fan and ….. ( control is lost by government )… shifting the ante for another amnesty with out any enforcement is just hot air…

    Mr, Minister please take note .. you install a couple of large bill boards on the motorways , and stick up around the island….
    ………………………………………………………………..
    ALL OVERDUE TAXES MUST BE CLEARED BY (31/01/2017) FAILING THIS, WOULD BE COURT PROCEEDINGS AND NAMES OF THE COMPANIES MADE PUBLIC…….

    Reply
  5. Brigitte December 14, 2016 at 9:21 am

    Still waiting for Tax refund for 2014!! How’s that for being overdue !! When it finally comes(if ever?!) will the government be paying me interest on it? This is beyond ridiculous…..

    Reply
  6. James Franks December 14, 2016 at 10:12 am

    Not just the sewerage system is collapsing but the entire Island from an economic viewpoint.

    Reply
  7. F.A.Rudder January 3, 2017 at 11:38 am

    If you are interested in keeping your home-land prosperous it will be a national call by all politicians whom you as a national have sent to represent you to have a policy in plan to keep unemployment at a low!

    Reply

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