Bid to change VAT rules
As regards Value Added Tax (VAT) legislation, Tax And Consultancy Services Ltd director Charles Tibbitts has made a number of recommendations to Government.
Among his suggestions is to allow registrants to come forward and voluntarily disclose genuine errors that were made in their VAT returns without fear of penalties.
He was speaking last Tuesday during a Tax Update Seminar hosted by the Institute of Chartered Accountants of Barbados at Hilton Barbados.
Noting that many practitioners would have come across situations where a registrant may have incorrectly accounted for VAT on a transaction, he said when VAT was first introduced, a recommendation had been made for the legislation to accommodate people who voluntarily disclose errors, as obtains in Canada.
Tibbitts also called for a change in the VAT accounting period.
“At present a taxable period ends at the end of a calendar month.
“There are many businesses in Barbados that close their monthly accounts on days other than the end of the month.
“For instance, some may use the last Friday of a month,” he told BARBADOS BUSINESS AUTHORITY.
The tax expert said he hoped that the Comptroller of Customs would consider allowing registrants a taxable period ending at the end of a month that is in line with their business needs.
Tibbitts also recommended that Government consider including a provision that would allow late invoices with VAT less than $1 000 to be included in the VAT return when the invoice is received.
He indicated that sometimes registrants receive invoices for an accounting period after they had completed their VAT return and even after they had submitted it.
“Currently in order for such a registrant to reclaim the VAT, [s/he] must seek to have the VAT return for the period to which the invoice relates reopened.
“This is time-consuming,” he said.
Tibbitts also recommended that VAT relief should be given on sales between related companies.
“There is no relief from the charging of VAT on supplies made between related companies.
“This creates additional costs – for example, when a financial institution leases property from a related party in its group,” he said. (NB)