Approximately $25 million in income tax refunds have been paid out by the Barbados Revenue Authority (BRA) for the 2017 tax filing period, Minister in the Ministry of Finance Ryan Straughn has disclosed.
He did not say how much the total was to be paid out for that tax period.
At the same time, Straughn, who was leading off debate on the Income Tax Amendment and Validation Bill in Parliament on Tuesday, promised that over the next three years Government would be paying the $116 million it owed to individuals for income tax returns for the 2008 to 2016 tax period.
At the same time, the Christ Church East Central Member of Parliament said Government would be settling its arrears with the private sector and the National Insurance Scheme (NIS). This was important, he said, as Government sought to do some “cleaning up” and renew its relationship with residents and businesses.
“That is important because we must now get people accustomed to doing business in the way it should be done,” said Straughn.
He acknowledged that Government was still a little behind on paying out refunds for the 2017 income tax period, which should have been completed by the end of October. However, Straughn said it was late because Government had to ensure it had the cash flow to meet that obligation.
The Minister said for the tax period 2008 to 2016, Government owed approximately $96 million in income tax, $23 million in reverse tax credits and £102 million in Value Added Tax (VAT) refunds.
“This is the context in which, having inherited the Government we understood that we needed to start to rebuild the trust,” Straughn said. He insisted that in order to restore confidence the first step for Government was to stay current and not build up any more arrears.
“Having just paid about $25 million in personal income tax for 2017 we will in the next phase, be settling those VAT returns for the second quarter of this year and we will also be settling the reverse tax credit for 2017 as well, because in staying current with our obligations we are effectively changing the nature of the relationship that people would have had with Government and establishing something new,” he said.
The Income Tax Amendment and Validation Bill was eventually passed. It makes way for the measures outlined in the June 15 mini-budget to be made legal
including writing off all taxes owed for tax years 1968 to 2000 and waiving interests and penalties due and owing between tax years 2000 and 2017 as long as outstanding payments were made or a payment plan agreed with the BRA.
The law was also amended to move from the use of compound interest to the use of simple interest.
The tax amnesty, which began July 1 and ends on December 31, for the waiver of penalty and interest on taxes owed to the BRA for the period January 1, 2001 to December 31, 2017, is applicable to the VAT, Land Tax, Income Tax, including PAYE and Corporation Tax.