KINGSTOWN, St. Vincent – The government is waiving up to 80 per cent of tax interests and penalties as it seeks to collect some of the EC$221 million owed to the Inland Revenue Department (IRD).
Citizens who owe the state EC$100 or less in taxes, interest, or penalties, will see their balance automatically zeroed.
Vincentian citizens and cooperation owe the government EC$134 million in taxes and EC$86 million in interest and penalties, Prime Minister Dr. Ralph Gonsalves said Tuesday as he addressed “an important matter concerning taxes”.
Gonsalves, who is also Minister of Finance, told a media briefing that the outstanding amounts were accumulated between 1998 and March 20.
“And these are all types — corporation tax, personal income tax, PAYE, value-added tax, withholding tax, excise, property tax,” he said.
But Gonsalves said that the amnesties will not include pay-as-you-earn (PAYE) tax and value-added-tax (VAT.
“The VAT will be five years old on the first of May, and the PAYE, you are supposed to pay that over when you take that out of the workers’ pay packet and the excise,” he said.
“I want to tell the people of the country this because a number of persons who want me to do more in certain ways don’t want to pay their fair share of taxes,” he said.
“This is the same issue that President [Barack] Obama has to address in the United States: the issue of fairness.” Gonsalves further said he had approved an arrears management program by the IRD.
“First, an amnesty for the partial waiver of interest and penalty be extended to the tax payers in order to improve compliance levels and allow for a more efficient management of arrears in the future.”
The IRD has been accorded the discretion to settle outstanding amount prior to 1998.
Taxes, tax interest, and penalties prior to 1998 amount to almost EC$20 million while a further EC$200.8 million was accumulated between 1998 and March 20.
During the entire period, EC$122.4 million in taxes, EC$68.9 million in interest, and EC$9.4 million in penalties remain unpaid to the government.
Gonsalves said that the IRD has discretion on how to handle taxes outstanding up to income year 1997. The government, however, will waive 100 per cent of the interest and penalties payable on taxes up to that year.
The state, however, will not waive any tax owed between 1998 and 2000 even as it waives 80 per cent of the interest and penalties payable.
For sums from 2001 to 2003, the tax will still be due but the state will waive 70 per cent of the interest and penalties due.
For 2004 to 2007 there will be a 60 per cent waiver of the interest and penalties, while 50 per cent will be waived for 2008 to 2010.
Gonsalves noted that the waivers are applicable to cooperation tax, personal income tax, and withholding tax from 1998 to income year 2010.
“In relation to 1994 to 2011 property tax, again, there no waiver on the tax but there is a penalty interest, which will be waived to the extent of 80 per cent on all prior property taxes,” he said.
“So I am offering the taxpayers for company tax, personal income tax, withholding tax, substantial waivers in their interest and penalties,” Gonsalves said.