by Linda Straker
- Tax amnesty went into effect without amendments to 2016 Tax Administration Act
- Bill to address recoverability of outstanding taxes, arrears, and to improve compliance
- Opposition warned about potential for abuse of amnesty clause
Prime Minister Dickon Minister has disclosed that individuals and corporate bodies owe the Government over EC$750 million in outstanding taxes and penalties up to 2021, and the tax amnesty offered for 2023 aims to reduce the sum significantly. “In the budget speech, we quoted a figure of in excess of EC$600 million …the actual figure from the Inland Revenue Department is closer to EC$777 million,” he said while contributing to the debate of the Tax Administration Amendment Bill.
The tax amnesty went into effect as of 1 January 2023 without the necessary amendments to the 2016 Tax Administration Act. The Tax Administration Act defines tax as “a compulsory payment to government imposed under a law which this Act applies regardless of whether that payment is designated as a tax, fee, duty, levy or otherwise, and, unless the context otherwise requires, includes interest, late fee, or penalty in relation to a tax”.
However, the Government did not present a bill to Parliament seeking to adjust or amend the Tax Administration Act requirement to coincide with the start date of 1 January 2023 for the Tax Amnesty.
The Prime Minister, who served as Finance Minister until 31 March, told the Parliament sitting that the Government recognised the error and is correcting the mistake. “We recognise that, and based on our stated policy of granting amnesty, we need to make sure we correct the anomaly by getting the law amended.” He told members he had received many requests for those owing outstanding taxes to relieve them of penalties.
Philip Telesford, Leader of Government Business, explained that the Bill seeks to address the recoverability of the outstanding taxes, the arrears to these taxes, and to improve compliance. “The strategy of the Government is to provide a waiver, provide an opportunity where businesses and individuals who are owing the government tax can pay those taxes without having to service fees and penalties associated with the arrears on those taxes,” he said. “An amendment to the principal act is required to effect this tax amnesty as presently, the Minister for Finance has no expressed authority under the principal act to waive interest and penalties on outstanding tax arrears.”
Opposition members warned about the potential to abuse the amnesty clause in the Bill in the future. “Some who are supporters of the party may feel they have an inalienable right to get it because they help bring the Government into office,” said Opposition Leader Dr Keith Mitchell.
The next action is for the Bill, backdated 1 January 2023, to receive approval in the Upper House or Senate.
