KINGSTOWN, St. Vincent – The government is extending by one month an amnesty on interest for unpaid taxes even as it announced Tuesday a lottery to encourage greater compliance with the nation’s value-added tax (VAT) laws.
The state is waiving up to 80 per cent of tax interests and penalties dating back to 1999 as it seeks to collect some of the EC$221 million owed to the Inland Revenue Department (IRD).
And Prime Minister and Minister of Finance Dr. Ralph Gonsalves told a press briefing that the VAT lottery will encourage consumers to demand receipts, thereby forcing businesses to pay over the 15 per cent VAT to the Treasury.
He said that not collecting the EC$221 million in outstanding taxes could cause “some destabilisations to some persons, companies and so forth.
“I am not having the money to spend on things that need to be spent in the country …” he told reporters.
Gonsalves said the tax amnesty has to ensure that persons who have arrears don’t feel that they are getting a break while those who paid on time “are at a disadvantage and therefore, certain issues of moral hazard arise.
“So, there has to be a sense of balance,” he said, adding that the amnesty is an “excellent opportunity” for persons and companies to regularise their tax accounts.
“… clearly, people who have PAYE monies, those monies are trust monies, you have to pay them over. People who collect VAT, those are trust monies, you have to pay them over because you already collected them on behalf of the government, you can’t use them, it is not your money,” he said.
Tax lottery
Meanwhile, Gonsalves said that the proposed VAT lottery is to ensure that goods and service providers issue receipts, thereby creating a record of the transaction.
“If there is no record … the government doesn’t get the 15 per cent [VAT]. So, to help me to get the 15 per cent, and to help you to have a prospect of doing something, if you have your receipt, you have a chance to be a part of the VAT lottery with you VAT receipt,” he said.
“… When you buy something …, insist that you get your receipt because you may have a chance to get a piece of change,” Gonsalves further stated.
The government hopes to begin the tax lottery next month, continuing through Christmas and will announce the details after they are finalised by the IRD and the National Lotteries Authority.