BASSETERRE, St. Kitts – FOR the next six months, all taxpayers with arrears would be given the opportunity to pay off their taxes without any interest or penalties thanks to a Tax Amnesty to be implemented by the Ministry of Finance this week.
According to Minister of Finance, International Trade and Commerce, Hon. Dr. Timothy Harris, the amnesty will take effect from April 1 and extend until September 30, 2009. Harris stated that the amnesty will “lighten the burden of taxpayers in arrears”, and is one that will give non-compliers the “unforced opportunity” to come in accordance with the law.
The proposed amnesty would be applied to a total of eighteen imposts, including Corporate Income Tax, Traders Tax, Consumption Tax on Services, Hotel Room and Restaurant Tax and Insurance Premium Tax. Other taxes on gaming machines, insurance registration, travel, property and vehicle rental would also be covered by the tax amnesty.
“Government is directing this worthy initiative to all delinquent taxpayers, both registered and unregistered at this time. If you are registered and have an outstanding balance, be it full or partial, on any of the aforementioned taxes, then this amnesty is being extended to you. It also includes those who are registered with the Inland Revenue Department, but who did not report some aspect of their obligation. Equally, it is for potential taxpayers who have never registered at all with the Inland Revenue Department, but who have engaged in and continue to be engaged in activities which are taxable.
“Government is of the profound view that this amnesty is a good idea for all taxpayers, as it provides those in arrears with significant savings by means of eliminating the payment of interest and penalties. It will also bring to the fore and legitimize those individuals and entities who can be classified as tax delinquents and evaders,” Dr. Harris explained during last week’s Parliament.
The Minister mentioned that where payment is not completed within the amnesty period, but on or before December 30, 2009, taxpayers would receive a 70% waiver of interest and penalties due.
He acknowledged that in many cases the interest and penalty may be more than the actual taxes due, adding that the amnesty would therefore bring “significant relief to some tax payers”.
Provisions for this Tax Amnesty were made in the Budget Address for the fiscal year 2009, and although details were not concrete at the time, much attention was placed on increasing the government’s vigilance in collecting arrears.
During his budget address, Harris said the tax amnesty would lead to a “more harmonious atmosphere of tax relationships” between taxpayers and the Inland Revenue Department, through “co-operative compliance mechanisms”. It was cautioned, however, that failure to honour obligations within the stipulated period would not only jeopardize a company’s ability to benefit from concessions but would also result in legal action by the Government.
Tax amnesties were implemented in Jamaica in April 2008 and in Grenada in mid-November last year. Both countries recorded favourable amounts of returns and are currently witnessing increased tax compliance. As early as 1999, Barbados instituted a similar amnesty period to reap millions of otherwise lost revenue.
Taxpayers wanting to take advantage of this limited time offer are asked to visit the Inland Revenue Department to verify their tax balances. Accounts may be settled by cash or valid cheques.
Taxpayers living abroad are encouraged to submit their requests in writing to the Inland Revenue Department in order to be considered under the amnesty programme. Alternatively, overseas-based taxpayers can authorize a representative, who is residing in the Federation, to act on their behalf.
