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Invoicing scam

Ricky Jordan

Invoicing scam

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Government has evidence of foreign companies paying massively reduced duties on imported items thereby frustrating Barbadian businesses.
This was stated by Minister of Commerce and Trade?Senator Haynesley Benn during debate on the Customs (Amendment) Act 2012 which was passed in the Senate yesterday.
Benn told the Upper House about “horrific invoicing” by some foreign companies which did business here.
Saying he had the evidence but did not bring it to the Senate, Benn explained there were situations where such foreign companies “could bring in a container that has in five boxes and each box contains 12 items costing $2 each, so five boxes at 12 items is 60 by $2 which is $120, but the duty is charged at five boxes at $2 which is $10”.
“The Customs would now charge on $10 instead of $120. I have seen that!” said Benn.
“I put an asterisk alongside it and I drew it to the attention of the relevant minister who did what he had to do to contact the people and call them to account.
“A lot of that is happening in this country,” he added.
“It is robbing the Government of revenue, and those companies are able then to undersell [others] who import products and do what has to be done the right and honest way.”
He therefore advised Government to create better working conditions and put more resources at the disposal of the Customs Department and other agencies responsible for collecting Government revenue, so as to ensure that the relevant officers could do even better work.
Once this was accomplished, he said, there would be fewer instances of bounced cheques or entities owing Government more than $300 million.
“We heard when we came to office in 2008 that about $192 million was owed in Value Added Tax (VAT). And I heard that it has now reached $300 million,” he added.
Benn argued that every retailer had built into their system the 17.5 per cent VAT that should be paid to the Government, but some still wrote bounced cheques when it was time to pay it in. He said a similar situation occurred in relation to the National Insurance Scheme, where employers deducted money from employees’ salaries but failed to pay in the amounts later to Government.
The Customs Act, amended specifically at Section 214A, places liability equally on companies/corporations and on their directors where the entity has failed to pay its required duties to the Customs Department.
However, a director would not be liable if he or she exercised care and diligence in trying to prevent the company from defaulting. Under the original act, only the companies were liable.