Finance Minister Urges Persons to Take Advantage of Tax Amnesty

Minister of Finance and the Public Service, Audley Shaw, is urging all unregistered businesses and self-employed persons to take advantage of the tax amnesty, in which waivers of interest and penalties will be granted, across all tax types, once the principal sum owed is paid up. Mr. Shaw said Cabinet had decided that as a first step to increasing tax compliance, and mindful of the stresses that many taxpayers face, this amnesty will be introduced this financial year.
Opening the 2008/09 Budget Debate in the House of Representatives, yesterday (April 10), the Minister advised that if the arrears in principal are paid in full by June 30, the full interest and penalties would be waived. Afterwards, the following levels of waiver of penalties and interest would be applied: July 31, 80 per cent; August 31, 50 per cent; September 30, 40 per cent; and October 31, 20 per cent. The amnesty will end on October 31, 2008.
“The Government is ever mindful that engendering a culture of increased tax compliance from the electorate and business community must represent an ideal social partnership in which our taxes are paid, are paid on time, and the Government in turn pledges to spend those tax dollars in an efficient, open, corrupt-free and transparent way, such that taxpayers can see, feel and experience value for money in government expenditure,” Mr. Shaw said.
He added that, “the country must see, understand and feel a new culture of good Governance that is characterized by discipline, good conduct and good order, starting from the top. This is the only basis on which we can witness a return to law and order, including the respect for paying our taxes according to the laws of the land. We fully intend to enforce the tax laws of the country.”
Mr. Shaw said the clear emphasis of the Ministry was to improve collection of taxes due, significantly increase the collection of arrears due, re-establish the Revenue Protection Division (RPD), to protect major revenue windows from leakage through corruption and fraud, and take steps to widen the tax net by encouraging new entrants into the system.
He stressed that this decision was necessary as the level of compliance across all tax types was 38 per cent, compared with 60 to 80 per cent in more developed countries.
The Minister pointed out that as a result of this low compliance rate, coupled with increased delinquency rates and tax evasion, the current portfolio of active and dormant outstanding arrears plus interest and penalties across all tax types was $138 billion or just under US$2 billion.
“With $138 billion of arrears, tax compliance initiatives must be the first priority in collecting the needed revenue to finance the Budget and close the fiscal deficit gap,” he emphasised.