Good move

A Government backbencher says the tax amnesty currently being offered shows that Government is willing to work with Barbadians.

 

Member of Parliament for St. Michael West Central, James Paul, made the comments as he contributed to the debate in the House of Assembly yesterday on the Income Tax (Amendment) Bill, as he maintained that given the current environment, persons should not take the offer for granted. He made the point as he contended that too often businesses are not paying taxes as they should and are utilising the taxes they have deducted not to pay the relevant entities, but as cash flow for the businesses.

 

“We have the culture that has crept up in Barbados where it seemingly appears that there are many businesses when they are set up … do not factor in, or do not allow for the fact that they have to pay taxes,” he said.

 

Paul argued that many business consultants can attest to the fact that very often when they examine the books of businesses, those businesses do not factor in tax payments. He said that this behaviour is not becoming and he is adamant that it has to be addressed as those taxes are revenue that Government requires to run the day-to-day operations of the country. He made the point as he said that not only is this behaviour affecting the Barbados Revenue Authority, but also the National Insurance Scheme, and in the latter case it has a direct impact on employees.

 

“So when businesses are planning their operations, we need to take into consideration the fact that part of the cash flow includes paying the taxes on time,” he said.

 

Paul suggested then that the amnesty also offers businesses the opportunity to restructure their balance sheets in a positive way, reducing the liabilities section on the balance sheet, making the businesses more attractive. He made the remarks while noting that if unpaid for a considerable time, the penalties and interest accrued on the principal sum of the tax can often exceed the original tax figure.

 

“I think we have to give the Government credit for the fact that it is at least seeking to provide this service to businesses and giving them an opportunity to make things right. And I really believe that at a time when businesses are going through a lot of stress, that their balance sheets are looking unfavourable in some cases, that it offers them an opportunity to present more favourable balance sheets. That is of course providing that they actually put it unto the balance sheet the amount of levies, in terms of penalties and interest that they actually have due to Government,” he added. (JRT)