Recouping the $192m
JUST IMAGINE what the Government could do with $192 million right now.
Pay some desperate CLICO policyholders? Put the required $90 million investment into the Four Seasons project instead of dangerously dwindling the National Insurance Scheme coffers? Or make Al Barrack happy with his $70 million plus?
At least two of the above problems would be almost instantly solved if Government was somehow able to go after those companies which have been issuing “bounced cheques” and owing millions to the Customs Department for several years now.
It boggles the mind how much those entities are owing currently if, as Prime Minister Freundel Stuart told Parliament Tuesday, Government was owed $192 million in value added tax alone, when his party came into office in January 2008.
Four years on, Government is forced to bring legislation to amend the Customs Act in order to make directors of companies liable when these ubiquitous bounced cheques appear.
We therefore agree with Minister of Finance Chris Sinckler in this particular instance on efforts to tighten the law to deal with this sorry situation which he described on Tuesday in the Lower House as “very insidious” and “particularly odious”.
Noting that many business owners and directors had for years hidden behind the corporate veil in order to deliberately evade payment of duties and taxes to the Crown, Sinckler explained that the original Customs Act, last amended 14 years ago, placed liability mainly on companies and corporations and was, therefore, only able to hold individual directors responsible as a last resort.
This meant that business owners and directors could form new companies and continue to do business with the Crown – with some again cheating the Crown with impunity – while the Government went after defunct companies that owed it millions of dollars. This loophole provided a virtual haven for directors who had either fallen into financial trouble or simply wanted to skirt their civic and corporate duties.
Clearly, though, this has wider implications for every Barbadian since no Government can run a country without the requisite duties and taxes being paid to it.
The minister’s adjustments to Section 214A of the Customs Act, placing equal liability on the company/corporation and its owner/directors, is a step in the right direction; and even if the Government is unlikely to recoup the more than $192 million lost in the last four years, at least it would now be in a position to go after defaulters and corporate bounced cheque “artists” with the full backing of the law.
Furthermore, would it be invidious to ask the Minister of Finance to say how much is owed up to the end of 2011 and to call some of the names of those now defunct companies? We think not.
And while we support the Opposition’s view that companies do not bounce cheques simply “because a director wakes up one morning and feels ‘wutless’”, we cannot agree that this amendment is an act “of a desperate, unreasonable and rapacious Government”. In fact, the Government really has no other option in this scenario.