EDITORIAL: Explain tax certificate
MANY BARBADIANS ARE today very dejected because they have been waiting for many months for a tax refund from Government. Comments earlier this week from Minister of Finance Chris Sinckler may have dashed all hope of getting that cheque anytime soon.
Months ago, taxpayers would have rushed to submit their tax returns on time. Those who crunched the numbers and were due refunds, would have expected to receive them by now.
Based on the reaction to a news item this newspaper carried on Tuesday headlined Income Tax Returns Option, it is clear that many are disappointed. Mr Sinckler’s outline of the Government’s cash-flow situation and the offer of a tax certificate have certainly not resonated with the public.
Many Barbadians would have made plans on how to use their refunds. It may be the wrong approach, but it is what has become an annual custom.
The bad news comes at a time many are burdened by a rise in the cost of living in an environment that has become extremely challenging financially. At the same time, pay cheques for many have remained stagnant. The prolonged downturn in the economy has harshly impacted many who are hurting which explains why they have been eagerly looking forward to tax refunds in cash.
The newly-established Barbados Revenue Authority and the Ministry of Finance will have to shoulder the blame for any negative public fallout on this issue.
Both departments should have long ago explained to the public – indeed, even before the time for filing of income tax returns – of the possibilities taxpayers could take up. In much the same way the penalties are known given the often repeated public service announcements, so too should the options available to those entitled to refunds.
Government must therefore consider whether to disburse as many cash refunds as possible for the remainder of this year, following the collection of land taxes. This will allow people to spend and thereby inject some cash back into the economy to benefit both businesses and Government.
On the other hand, those entitled to refunds must look beyond the satisfaction of conspicuous consumer consumption to use the incoming funds to pay off or pay down high-interest debt, outstanding loans, or as an investment.
This is where the tax certificate makes sense. How it will work and its benefits must be fully explained.
The planned tax certificate, even though publicly mentioned previously, has certainly missed most people. The tradition has been a cheque and that is what most people still prefer. In the meantime, don’t hold your breath for that cheque.