Businessman Wilfred Espinet has slammed the process for the payment of Value Added Tax Bonds which the government is insisting will only be done for businesses whose taxes are paid in full and up to date.
In a letter to the editor, Espinet, who was the chairman of Petrotrin under the Rowley administration and of Heritage Petroleum, said he was not against paying taxes but disagreed with the government’s approach
He said: “Today I received a circular notice on the issue of Government/Sovereign Bonds in lieu of overdue VAT Refunds to business. The circular stated that a condition of receiving the Bond is having all taxes paid up to date. While irrational behaviour seems to be the hallmark of today’s politicians, it is unimaginable that a Government will intimidate the population while flagrantly breaching the regulations in question.”
Espinet argued that the payment of VAT is due at specific times defined in law. The payment of refunds similarly has a defined period to be paid. He said delays in the payment of either VAT or Refunds are subject to penalties.
“Over time, the practice of neglecting VAT refunds has become the norm and a method of funding the National Budget, from debt that is neither negotiated nor accounted for. A recent statement by the Minister of Finance put it into perspective when he stated that payment of VAT Refunds would not normally be paid out (especially to large firms). This practice is perpetuated because legal action against the State has no effective relief, even from a favourable ruling,” Espinet lamented.
He explained that the recent decision by Government to regularise this through the issuance of Bonds, as a swap for Refunds, has been promoted as a relief to businesses and said that his decision to highlight the absurdity of demanding that taxes be paid up to date is not an attempt to escape or delay payments of taxes.
“However, I would like to point out the flaws of the process. Companies are required to pay taxes quarterly. The basis of calculating taxes due in any one quarter is the profit made for the comparable period the previous year. The law states that should there be reasonable grounds that your profits are reduced from the previous year, you can apply for a reduction in the taxes due. However, in recent times these applications for reductions have been ignored or disregard. A case in point is the recent “Shutdown” imposed on businesses by Government, that in most cases, has eliminated all revenues,” Espinet wrote.
He said to demand taxation based on the comparative period of the year before is nonsensical.
According to Espinet: “The issue of the Bond is a concession from the Businesses to the State. This should not come with conditions. Additionally, the regulations should be amended to allow Companies to offset VAT Refunds against any Tax Payments that are due.”