Inland Revenue Department announces new Tax Refund Policy

Effective tax season 2024, the Inland Revenue Department (IRD),will be implementing a new Tax Refunds’ Policy whereby Personal Income Tax refunds would ONLY be issued to taxpayers via direct deposit to their financial institution accounts, as opposed to the current method of issuing refunds by physical cheques. Prior to the direct deposits being made, taxpayers would receive notice of the refund via personal email address ONLY – provided to the IRD by the taxpayer or taxpayer representative.

This new Tax Refunds’ Policy well aligns with the mandate of the Government of St. Vincent and the Grenadines (GoSVG) under the Caribbean Digital Transformation Project (CARDTP), to improve digital public service delivery and modernise government operations.

Under the CARDTP, the government has flagged the development of citizen-facing digital government services as a key priority, to improve the user experience for citizens accessing public services and to improve the efficiency of internal government operations.  To this end, the IRD, in October 2022, launched its debit/credit card payment option for the payment of taxes and licenses at the IRD.  Also, under the CARDTP, the IRD will be procuring a new Tax Information Management System. Additionally, later in 2024, the IRD will be launching an E-filing portal which would encourage more efficient and timely filing of returns and would eliminate the need for paper submissions.

The IRD also intends, imminently, to commence the issuance of automated electronic receipts to taxpayers.

As indicated, this new Tax Refunds’ Policy will see the issuance of Personal Income Tax refunds being made ONLY via direct deposit to taxpayers’ financial institution accounts and notice of available refunds being sent ONLY via email.

The previous method of issuing refunds involved the printing of paper notices and the delivery of same via post.  Over the years, as access to technology increased and postal services became less utilized, tax refund notices were not being collected by taxpayers.  This has ultimately led to a high level of uncollected refund notices and unclaimed tax refunds over the years. The IRD has estimated that approximately 40% of refund notices go uncollected on a yearly basis, with a similar percentage of refunds being unclaimed. Sending tax refund notices via email, would create an immediate notification to taxpayers and limit the amount of paperwork and time needed to process refunds.

Additionally, the issuance of tax refunds via direct deposit will eliminate the need to travel to Kingstown to collect cheque payments, an issue that was particularly relevant to taxpayers in the Grenadines and rural districts.

To facilitate this new refund process, the IRD is soliciting taxpayers’ assistance in providing the following information:
• Full name (e.g. John F. Brown)
• Date of Birth (day, month and year)
• Current Address
• Tax Identification Number (‘TIN’)
• Email Address
• Financial Institution name and account number.

Taxpayers can scan the QR Code in the graphic that accompanies this article and provide details on the form provided.

Additionally, taxpayers are advised to provide accurate and up-to-date financial institution account information and a valid email address when filing their Personal Income Tax returns.

This information is being requested strictly for the purpose of populating the IRD’s database in order to process tax refunds through direct deposit and to issue electronic notifications.

The IRD is confident that this new initiative will be highly beneficial to the taxpaying public and as such, anticipates the public’s co-operation and support (IRD).