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IT’S MY BUSINESS: The coming storm of tax collection

Pat Hoyos

IT’S MY BUSINESS: The coming  storm of  tax collection

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Late last year the then Minister of Housing, Michael Lashley, was quoted as saying that the Barbados Government would have to find around $150 million for compulsory acquisition of land which the Government planned to acquire.
This of course would be added to the millions – some say near $200 million – owed for compulsory acquisitions by current and previous administrations.
This must be added to the approximately $175 million owed in VAT refunds to businesses. When questioned about that amount last week by the Public Accounts Committee (PAC), the Customs Department, according to the Back Page of yesterday’s Saturday Sun, cited a “lack of staff resources” to get the VAT system brought up to date.
Together, that is over $325 million in refunds and payments owed by the Government to the people. Not a small sum.
On the other hand, according to the same article, the Inland Revenue Department’s Tyrone Lavine told the PAC that the taxman was owed close to a quarter of a billion dollars in unpaid taxes stretching back to 1980.
But it gets worse, with Auditor General Leigh Trotman telling the PAC that if you went back to 1968, the debt would be around $400 million.
New life
“A debt as old as independent Barbados,” observed the PAC chairman, Leader of the Opposition Mia Mottley, who deserves credit for breathing new life into the Public Accounts Committee.
At the Barbados Chamber of Commerce and Industry luncheon on May 29, Minister of Finance Chris Sinckler hinted that some of the money raised from Government’s latest bond issue might be used to pay VAT refunds, which would help the cash flow of businesses no end, of course.
“I have instructed my team to produce immediately for me a plan to significantly reduce, if not eliminate entirely, those payments in the next couple months. The recent raising of the Treasury Bills limit is part of the strategy to address this vexing matter,” he said.
But when the Government giveth, it also taketh. Mr Sinckler said under-invoicing of imports was causing the Treasury to lose millions of dollars every year, and this matter would be put right when the new super taxman comes to town.
“With the coming of the Barbados Revenue Authority, things down there will change and change significantly.
So brace yourselves for the coming storm,” he said.
Fair enough, but there will come a time when the Government has to stop thinking about all that uncollected tax from the 1960s to the 1990s.
The number of court cases it might engender, the number of delays, counter-claims by parties affected and so forth will not lead to cash raining down on the Treasury. Better to write off all of that old debt (and I can say so because none of it is owed by me) and let the Government move on, perhaps, to focus on only the past decade, and the coming years.
Dear Government: If you pay your VAT and income tax refunds on a timely basis, you will have not only the legal but the moral authority to prosecute those who are not paying – or are underpaying – their taxes in the first place.
What about all of that money owed to people for land acquisition? I haven’t heard Mr Sinckler address that one. Better to get them build you a wall by way of repayment, as I doubt you will ever see the cash.
So there is a storm coming, my friends, a storm of more vigorous tax collection and retribution for non-payment by a Government so cash-strapped that it drools as it gazes down the hallways of history in pursuit of ancient back taxes, while it remains unable to repay what it does owe to the citizens and businesses in Barbados.
Hints that one can be made to net off the other do not redound to the common sense of those who suggest it. Peter can’t pay for Paul in this case.
If I am owed a refund I must get it, and if you owe taxes you must pay them or face prosecution.
When the Government gets that simple principle understood, maybe we will make some progress on tax matters.
Not me!
“This Democratic Labour Party Government, that in the worst recession has built more houses and provided homes in four years than they (the BLP) did in 14, is being called a ‘do-nothing Government’.” – Chris Sinckler, speech to Barbados Chamber of Commerce and Industry, May 29, 2013.
I don’t know who in their right mind could think of calling the administration of Freundel Stuart a “do-nothing” Government. As the song says, it wasn’t me.
Perhaps from time to time I may possibly have referred to it as the ‘Dolittle Administration’, but never a “do nothing” one.
I mean, they do make speeches, don’t they?
• Pat Hoyos is a publisher and business writer.