Government’s revenue collection agency must stop “dilly-dallying” and go after businesses and individuals who evade taxes, the country’s oldest private sector grouping has advised.
The Barbados Chamber of Commerce and Industry (BCCI) is arguing that there is too much talk about the private sector owing Government hundreds of millions of dollars in taxes, and too little action by the Barbados Revenue Authority (BRA) to ensure those who owe taxes pay up.
“It is time to stop dilly-dallying and deal with the people that are evading taxes. Let us deal with those people,” BCCI Senior Vice President Ed Clarke told the annual Ernst & Young/BCCI breakfast forum at the Lloyd Erskine Sandiford Centre this morning.
Addressing the theme What Businesses Need to Know, Clarke acknowledged that private enterprises should be made to pay their fair share of taxes, especially at a time when Government needed to improve its finances.
However, he said it was up to BRA to use its legal teeth to get the defaulters to live up to their responsibility to the state, including offsetting what Government owes in tax returns to the businesses against what is owed to the state.
“There is an argument if you offset taxes Government will not get any revenue because so much is owed to private enterprises. But let us look at it differently. If the Government continues to say it is owed significantly, hundreds of millions of dollars in taxes by private enterprise, go and collect it. You have all the legal rights to go and collect taxes.
“If the Government of Barbados thinks people owe them I encourage the BRA to go out there and collect the taxes that are owed – whether it is land [tax], income tax, corporation tax or Value Added Tax. Stop talking about it and just do it. That is all we want you to do,” the BCCI official emphasized.
Soon after it was established, BRA declared in April 2014 that it would go after all employed people who fail to file tax returns, including those in the “underground economy”.
Revenue Commissioner Margaret Sivers warned at the time that no one would escape, as the revenue authority intended to deploy an intelligence gathering approach to capture those outside the tax net, adding that while it would first seek to encourage people to pay up, those who did not would be hit by tough penalties.
There is little evidence to show that BRA has carried out its threat, much to the annoyance of Clarke, who also recommended that those who are part of the country’s unrecorded and untaxed economic activity should be made to pay up.
“We are tired hearing about the unknown quantity of money earners in Barbados, the underground economy, which seems to get away with everything. Let us stop it. If I run a business and I have to file my tax return and I owe $10,000 a year in tax I pay it. If the coconut vendors, the minivan [operators] the food sellers, the traders that come in and trade have taxes to pay, let the BRA go after them,” he repeated.
Clarke also pointed out that Government could make it easier for businesses to pay up by facilitating online transactions.
This prompted a reaction from BRA’s Senior Auditor Neville Clarke, who gave the assurance that the revenue collection agency was working on a new database that would allow for all taxes to be paid online. He did not say how soon.
The BRA official also explained that the complexities of the tax system, including the various databases, “do not permit us to do the offsetting at this moment”.
“It is not that we wouldn’t want to offset, it is that it is difficult and it probably would cost more than it would be worth. But that will be something when we have our new tax system; that will be a feature that we will be able to offset across different taxes.
“When it comes to the underground economy, I am sure that we all would like everybody to pay their fair share of taxes. I can assure you that our revenue commissioner is of the same view and she is, I should say, feverishly working towards getting those things in place, getting her staff up to speed on doing what is necessary to make sure that all taxpayers comply voluntarily. And those who don’t comply voluntarily will be gone after and made to pay their fair share,” he assured.