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PORT OF SPAIN – The Trinidad and Tobago Chamber of Industry and Commerce (TTCIC) has described as “ wholly unsatisfactory” the TT$5.5 billion value added tax (VAT) refund arrears owed to the private sector by the government.
In a statement, the TTCIC said that the matter remains of critical concern to the business community, given its negative impact on the ease of doing business.
It quoted a recent International Monetary Fund (IMF) Country Report that states that at the end of March 2017, tax arrears stood at 11 per cent of gross domestic product (GDP) and that Trinidad and Tobago had been ranked at 145th in the Doing Business survey’s “paying taxes” index.
“At this juncture, the T&T Chamber is concerned about both the impact on cash flow of VAT-registered businesses, and about the prospect of non-compliance.”
The private sector group said that while lengthy waiting periods were not uncommon, “the situation has now worsened with business people experiencing refund delays exceeding 24 months.
“In an already cash-strapped economy, added constraints from late or non-receipt of refunds impose yet another difficult burden upon the business community. It appears that those who are already tax compliant are being penalised nonetheless.”
The chamber said that it believes that a simple, short-term measure which could be taken by the government, is to allow companies to offset their refunds with payments due.
“While this solution is not ideal, if applied, it would still offer some reprieve to companies for outstanding monies owed,” it said, adding that based on its understanding of how government accounts for expenditure, “the delay in issuing refunds is possibly one mechanism through which the government has been able to show a reduction in spending for the financial year ending September 2017”.
The private sector group said that as representatives of the business community in Trinidad and Tobago, it “demands that government take corrective action immediately, in what has evolved into a highly disruptive situation”.
There has been no response as yet to the statement by the Keith Rowley administration, but Finance Minister Colm Imbert has in the past complained of a cash flow problem facing the administration as a result of a severe decline in price for energy products on the global market. (CMC)