Gov’t to plug tax loopholes
Government is seeking to shore up its tax collection system to ensure that it gets what is due to it.
This, says Minister of Finance and Economic Affairs, Christopher Sinckler, is to be achieved through an amendment to the Barbados Revenue Authority (BRA) Act. According to the finance minister, the amendment will “plug the loopholes” that exist in the system, which now allow some persons owing taxes to the State to escape that responsibility. Moreover, he said it will also assist in building out the single taxpayer platform that the BRA is intended to be.
As such, he told the Lower House yesterday morning, that it was decided that since the BRA has the principal responsibility of the administration of all of the taxes which fall under it, the legislation should reflect that fact. As such, he said, Government was advised that the Act should be amended to recognise the Revenue Commissioner as the person responsible for the administration of the taxes in full, and secondly for the holder of that office to be provided with the authority to issue a BRA tax clearance certificate ensuring that liabilities across the system are paid. Sinckler indicated that the issuance of this single tax clearance certificate rather than tax clearance certificates for each tax payable to the State, would ensure that persons were up to date in all their obligations and that they were not undercutting the system.
“In quite a few, and I should say too many cases, we have instances Mr. Speaker Sir where persons seek to dispose of property, but who are indebted to the Crown up and down the stream some of it because of business failures, others because of deliberate denying of the Crown of its due, operating under the very fortunate circumstances where they could dispose of property owned by them… garner unto themselves, because they have a land tax clearance certificate approved because they owed no land taxes... But these persons, some of them, would dispose of the property, take that money unto themselves and disappear or refuse to pay the taxes and other things which were owed to the Crown and we’ve seen that happen on many, many occasions,” he said.
Sinckler maintained that he does not believe that the system was designed to work in that way, and argued that it went against the standard principle of tax administration and tax law.
With that in mind, he said that once passed, the amendment to the Act will allow the Commissioner to issue tax clearance certificates where they are satisfied that no taxes are due under the various taxing Acts including Excise Tax, Income Tax, Land Tax and Value Added Tax; that all taxes, interest and penalties which have accrued under the Acts have been paid; or that 10 per cent of the taxes, interest and penalties which have accrued has been paid and there is an agreement with the BRA for the purpose of liquidating the sums owed.
“The Act states very clear, you are given a tax clearance certificate in good faith if you pay a 10 per cent and you make an arrangement to pay over time. That is a good faith act on the part of the Crown, on the part of the Revenue Authority, to assist you to continue to conduct your business while getting you to recognise you have a liability and that you are going to deal with that liability,” he stated. (JRT)