Non-compliant taxpayers granted three months amnesty

Non-compliant tax payers will be given three months to regularize their tax status, after which the Inland Revenue Department (IRD) intends to pursue collection measures and where warranted, bring criminal charges.

During the 2018 Budget address on Monday February 5, Minister of Finance Camillo Gonsalves said the Inland Revenue Department (IRD) is owed $169.9 million in unpaid taxes and when penalties and interest payments are included, the arrears balloon to approximately $300 million, which is over 47 per cent of the budgeted current revenue, and some 28 per cent more than the entire planned capital expenditure for 2018.

“It is unacceptable that law-abiding taxpayers are being asked to subsidize the cost of such massive non-compliance,” Gonsalves said.

“Of particular concern is the failure of businesses and employers to pay over VAT, PAYE and withholding taxes to the Government. Today, outstanding VAT and PAYE amount to $58.2 million. Businesses that charge customers VAT and then pocket it, instead of remitting it to the Government, are committing a criminal offence. Further, in illegally keeping VAT monies, essentially as working capital, they are giving themselves an unfair advantage over fellow businesses that submit VAT in compliance with the law. The arguments are similar for PAYE.”

The Minister said in order to give non-compliant taxpayers an opportunity to regularize their status with the IRD, and in pursuit of a fair and inclusive solution to these outstanding debts, non-compliant taxpayers will be given a three-month amnesty which ends on May 15, 2018.

“During the next three months, we are inviting all non-compliant taxpayers to go into the IRD to negotiate payment plans and settlement options, in exchange for a waiver of a percentage of interest and penalties.”

The Finance Minister said at the expiration of the tax amnesty, the IRD will immediately commence collection procedures against those who did not negotiate appropriate arrangements to settle their arrears or those who breach the terms of their payment plan.

“This Budget provides for the hiring of three additional High Court bailiffs, who will be assigned exclusively to assist the IRD to strengthen their collection efforts. Additionally, where the facts and the law merit, the IRD will not shy away from sharing potentially criminal cases of tax fraud with the Director of Public Prosecutions.”

Gonsalves said, beyond tax cuts and tax collections, the Government intends to push through a number of reforms to improve administrative efficiency and equity in the system of taxation.

“Chief among those is the enactment of a modern Tax Administration Procedures Bill and amendments to the Income Tax Act. These measures will address organizational bottlenecks, close loopholes, clarify rules related to doubtful debts and management charges, and further our objective of halting tax evasion by conglomerates.

“Additionally, the capital budget includes a $7.5 million allocation for the purchase and retrofitting of headquarters for the Inland Revenue Department, and other offices. The Budget also makes provision to upgrade equipment and purchase of a vehicle.”