by Linda Straker
- NNP administration waived millions in taxes without announcing tax amnesty
- 1-year tax amnesty announced by Prime Minister Mitchell on 5 December 2022
- Ministry of Legal Affairs’ advice being sought
The ruling Dickon Mitchell Administration has said that the former Dr Keith Mitchell–New National Party (NNP) administration (Feb 2013–Jun 2022) waived millions in taxes while in office without announcing a tax amnesty.
Press Secretary Tahira Carter said that in the past 5 years, the Government of Grenada waived over EC$17 million in tax penalties and interest across all tax types, including Value Added Tax (VAT) and Pay As You Earn (PAYE) taxes. Because of these waivers, a tax amnesty has been in effect for many years.
“The Government of Grenada, through the Minister of Finance, has been waiving interest and penalties on all tax types, including PAYE and VAT, over many years. In fact, in the last 5 years, in excess of $17 million has been granted in waivers of penalties and interest across all tax types, including VAT and PAYE,” Carter said in response to a series of questions emailed on 10 January 2023.
The questions sought clarity on the legal requirements for the 1-year tax amnesty announced by Prime Minister Mitchell on 5 December 2022, and a news release from the Inland Revenue Department announcing its enforcement until December 2023.
A news release from the Ministry of Finance dated 10 January 2023 said that the Ministry of Finance wished to inform the public that the Inland Revenue Division is currently implementing a 1-year Tax Amnesty programme. “The Tax Amnesty will provide a 100% waiver on ALL interests and penalties to ALL taxpayers with existing tax arrears owed to the Division, up to December 31, 2021,” said the release.
Carter further said in her response that “by definition, a Tax Amnesty will require taxpayers to pay all (or a portion of past taxes) but will forgive all (or a portion) of the interest and penalties due on those taxes. Accordingly, a ‘Tax Amnesty’ has been in effect for many years, including after the passage of the Tax Administration Act,” she said in her email reply dated 19 January 2023.
Referring to the legal requirement, she pointed out that “Regarding the definition of Tax under the TAA, the Act states… ‘unless the context otherwise requires, includes interest, late fee, or penalty in relation to a tax.’ This has the interpretation that there are circumstances where the tax definition does not include interest and penalties.”
Carter assured that the Ministry of Legal Affairs’ advice regarding implementing the tax amnesty is also being sought. “Notwithstanding the above, we have requested assistance from the Ministry of Legal Affairs in ensuring that all the legal requirements, including for the Tax Amnesty, are met to give effect to all the fiscal measures announced in the 2023 Budget and to facilitate timely and successful implementation,” she said.
Given that there has been a tax amnesty in effect over the last five years, why would this government with its eye on transformation continue forgiving delinquents while others of us bear the full burden?