Tax Administration takes Action against non Filers

The Tax Administration has announced that it will be taking strong action against business persons who had failed to file their income tax returns or pay their taxes to meet the March 15 deadline. This measure is being taken by the tax authority to send a strong message to delinquent taxpayers that they have an obligation to file and pay their taxes on time.
The tough stance is being adopted following an intensive two-month public education campaign carried out by the Tax Administration in which taxpayers were reminded of their obligation to file their income tax annual and estimated returns for 2009 and 2010, respectively, and pay the taxes due by March 15. During the lead up to the deadline, the administration also conducted an extensive island- wide Special Taxpayer Service Programme to assist small business operators to complete their tax returns.
The tax authority has identified 11,242 organisations and 44,786 self-employed individuals who failed to file their income tax returns by the due date and has embarked on an aggressive compliance drive targeting the non-filers. “Failure to File” notices have been prepared and will be mailed, giving fourteen (14) days in which to respond. It should be noted that returns filed after the March 15
deadline will be classified as late, and payments due will be subject to 40% interest per annum, calculated daily. Persons are therefore urged to file their outstanding returns without further delay.
For returns which still remain outstanding at the end of the notice period, the administration will take one of two options:
It may use its automated system to generate estimated income tax assessments. Under the Income Tax Act, any assessment raised by the Commissioner is subject to a maximum penalty of 300%.The administration may exercise its option to take persons to Court for failing to file their returns. Under the Income Tax Act a person can be fined up to $10,000 for each outstanding return or be imprisoned for up to a year. Please note that Court action would not absolve the delinquent taxpayer of filing outstanding returns and paying outstanding amounts.
These enforcement actions will not apply to persons who had made a written request and received permission from the Commissioner, Inland Revenue Department to file their returns later than the March 15 due date. It must be noted however that in these cases the outstanding returns and relevant payments MUST be submitted by the date as indicated in the permission granted, otherwise the compliance actions will be applied.

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