Tax clearance certificates no big deal, says McClean
Minister of Foreign Affairs Senator Maxine McClean said she was at a loss to understand the controversy over the Barbados Revenue Authority Amendment Bill 2017.
The amendment has been sharply criticized on the premise that it infringes on the rights of property owners seeking conveyances.
According to the amendment, those wishing to obtain a tax clearance certificate to facilitate a conveyance of land, must pay all taxes, interest and penalties accrued under the Land Tax Act, Cap 78A.
People are also required to repay all input taxes in accordance with Section 48(4) of the Value Added Tax Act, Cap 87 where such tax was previously allowed under Section 46 (2) of that Act.
Applicants who may not have the means to settle their arrears in full have the option of paying ten per cent of the taxes, interest and penalties which have accrued under the other taxing Acts, and enter into an agreement with the BRA to make scheduled payments to liquidate the sums owed under those Acts.
However, opening the debate on the bill in the upper house yesterday, McClean argued this was by no means a new revenue collection strategy, as it is already widely used in many countries.
“The issue of a tax clearance certificate is not new; it is not peculiar to Barbados. It is something that has existed in many countries. I remember in the late 70s or 80s Trinidad and Tobago required tax clearance certificates for persons seeking to travel abroad.
“There are a number of countries in Europe and Africa that require it for a number of purposes . . . .We are looking to do this in Barbados as part of an effort to improve the work of the Barbados Revenue Authority,” McClean argued.
She also said the consolidated approach to tax collection would go a long way in stamping out tax evasion, as it would place the onus back on taxpayer to ensure that they are fully paid up to the state.
“In the past Government relied on individuals to declare in various places . . . . This is particularly so of persons who are self-employed because the law expects those persons to voluntarily present themselves to the tax collector,” she contended.
However, in a statement last month, President the Barbados Bar Association (BBA), Liesel Weekes warned that the amendment would have “constitutional implications” and would “cause more mischief than it cures.”
Weekes said then that other than the Land Tax Act, taxes due and payable under the other Acts were not charges on land “and ought not to be treated as such”.
Such taxes are personal to the tax registrant and are debts due to the Crown, and there were legal remedies available to the state in the event of default by a taxpayer, she argued.
The BBA head also said a review of the bill had revealed a failure to consider sums that had been assessed by BRA as payable but disputed by the taxpayer.