That’s how Minister of Finance Chris Sinckler today dismissed suggestions coming from within the local entertainment fraternity that he had turned a blind eye to their concerns about taxation.
In an interview with Barbados TODAY, Sinckler also responded to reports that members of the entertainment fraternity were plotting an offensive against the imposition of the 17.5 per cent Value Added Tax (VAT) on the industry, which they contend could be catastrophic should it be allowed.
He made it clear that while Government would be going to Parliament on December 15 to formalize the current arrangements under the VAT Act, the amendments were nothing new.
In fact, he pointed our that “public entertainment has always been taxed and was always intended to be taxed since the inception of the VAT”.
Sinckler drew reference to this weekend’s Hennessy Artistry Show, pointing out that a 12 per cent withholding tax has always applied to the use of foreign artistes at local events.
“It is also known that they [promoters] are liable to pay income tax,” the Minister of Finance said, while emphasizing that all the Barbados Revenue Authority (BRA) was seeking to do right now, as the leading tax enforcement agency, was “make it far clearer as to what is required of persons who engage in promotion of public entertainment activities”.
“[However], it has always been the policy of the Government, both this Government and the last Government which has been responsible for the VAT, that entertainment should be taxed at the standard rate [which was initially 15 per cent and is now 17.5 per cent].
“And if you look at the provisions that have been put in the [VAT Amendment] Bill, the amendments to the existing act, those are not new things,” Sinckler stressed.
He also said that under the amended legislation the process of registration for promoters was basically the same.
“You have to go in, you have to notify that you are having a show or whatever event it is. You have to produce your tickets . . . . Staff of the BRA would have to be present on the night or day of the event and there is a cross-checking of what comes through and what was stamped at the office . . . . All of those things are already in existence; so I m a little lost as to why we have to have all of these extensive consultations on what is already the practise,” he told Barbados TODAY in response to the concerns raised by the promoters in Friday’s ePaper.
The Minister of Finance also dismissed any suggestion that promoters should not have to pay VAT and that VAT should not be levied on tickets for events, while arguing that it was the consumer and not the promoter who pays VAT.
“What the promoter is doing is acting as an agent on behalf of the BRA as all businesses do in Barbados that are required to collect VAT. They are collecting the VAT and paying it in to the Barbados Revenue Authority,” he stressed.
He also cautioned the promoters that there was nothing in the VAT law called a “complimentary ticket”. Therefore, he said, the onus was on them to control the distribution of all event tickets to ensure that they were not left holding the bag.
“People usually say, ‘Oh, a sponsor will give me such and such amount of money and therefore I am giving them 200 free tickets, but it just does not work that way, because each of those tickets you gave away, without collecting the VAT, not only causes you to lose a sale . . . but it causes the rest of the country to have to forego revenue because you have automatically waived the VAT which you do not have the authority to do.”
The Minister of Finance emphasized that it was at the sole discretion of BRA – and not him – to waive any percentage of VAT.
And while officials of BRA were willing to meet with promoters to work out an accommodation on this vexed issue of complimentaries, “it has to be within reasonable means”.
“A person cannot come in and say, as has been happening, you do a show, you print 3,000 tickets and you come in nd tell me 1,500 or 1,200 are complimentary. That is just not acceptable . . . The free for all stuff cannot be permitted to continue,” he warned.
Sinckler said as Minister of Finance he stood ready to meet with the promoters to clarify the situation. However, contrary to reports, he said to date no group of promoters had asked to meet with him in relation to the VAT or any challenges to do with BRA.
“I have had individual promoters who have contacted me by way of phone or otherwise, and have raised these concerns and I have tried to answer their concerns as best I could. . . . so I don’t want it to go out that I am opposed to meeting with anybody and I don’t care and I have this callous attitude to promoters. I treat all of the business people the same way in relation to concerns which they raise.”
However, he clarified that “meeting with me does not mean that because you have a view that I must be convinced by your view”.
Sinckler said he had met for over two hours with Minister of Culture Stephen Lashley and officials of both ministries earlier this year to discuss the promoters’ concerns.
However, at the end of the day, he said it remained the Government’s policy, and not Chris Sinckler’s that VAT should be charged on entertainment events.
He also said Government was determined to bring order to the operations of the sector, where he said “it was more the practice not to pay [tax], than to pay”.
Suggesting that the Cultural Industries Bill held the key to unlocking any waivers from taxes and other benefits for operators in the sector, he said:“That is where you go to get the incentives that have been specifically designed for the cultural industry and that is where this discussion ought to be taking place.
“The tourism people have to go through the same process, small business people have to go through the same process to get concessions. There is always a structured way to do it because we cannot do this on an adhoc basis.
“So somebody jumps out of the woodwork; I am holding a show and I want to have duty-free or I want to have VAT-free and I want to have this tax off or that tax off. It cannot be done that way. If you do it that way, you open yourself to pure confusion.”
In response to suggestions that the tax requirements were likely to put promoters out of business, Sinckler said those in the industry who felt they were not making any money and were barely surviving should find something else to do.
His comments came against the backdrop of efforts by entertainers, promoters, musicians and deejays who are expected to form an association to lobby against the contentious levy.
A group of over 30 people met with Minister of Culture Stephen Lashley Thursday night at his office in Haggatt Hall, St Michael, to discuss their concerns.
And according to a source, various interest groups that made up a coalition of the affected did not plan to sit idly by and allow the process to continue without a fight.