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The High Court has ordered Unicomer (St. Vincent) Ltd., owners of Court furniture and appliance store, in Kingstown, to pay the Government of St. Vincent and the Grenadines $12,666,798.23 inclusive of interest and penalties, in unpaid taxes.

In her April 29 judgement, Justice Nicola Byer said the case was a “perfect example” of the dicta from a 1936 case when Lord Tomlin said, “… every man [or business] is entitled if he can, to order his affairs so as that the tax attaching under the appropriate Act is less than it otherwise would be”.

Justice Byer, however, said that the question in Unicomer’s case was whether, the company had gone beyond simply ordering their affairs to pay less tax within the provisions of the law, or their actions had gone beyond what is legally allowed and trespassed into the realm of behaviour that was contrary to the law in force.

The case

The case stemmed from a March 23, 2015 letter that the Comptroller of Inland Revenue wrote to Unicomer indicating the intention of the Inland Revenue Department (IRD) to raise additional assessments to tax on Unicomer in the sum of $12,666,798.23 inclusive of interest and penalties.

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The basis of the comptroller’s increased assessment centred on the Unicomer’s treatment of its credit protection premiums, hire-purchase profits and royalties.

The comptroller objected to Unicomer’s assessment and provided the grounds of this objection by a June 4, 2015 letter from KPMG

Unicomer appealed the comptroller’s assessment before the appeal commissioners by a notice of appeal filed on April 26, 2017.

In their Nov. 29, 2018 decision, the appeal commissioners held that the sums collected by the Unicomer in credit protection premiums were disallowed and withholding tax was chargeable on payments made to Canterbury; the deferral of hire purchase profits was disallowed; and royalty expenses were allowed.

The comptroller, by a Dec. 4, 2018 letter demanded that Unicomer make a payment of the sum of $13,556,007.30 on or before Dec. 14, 2018.

Unicomer responded by letter on Dec. 13, 2018 declining to make the demanded payment on the basis that the appeal commissioners had not upheld or confirmed the comptroller’s assessment and there was, consequently, no obligation on Unicomer to comply with the comptroller’s demand.

The comptroller responded by letter on Dec. 18, 2018 indicating that the appeal commissioners had, in effect, confirmed the assessment and demanded payment of the assessed taxes within 24 hours.

Unicomer repeated its position to the comptroller by letter dated Dec.19, 2018.

And, on Dec. 20, 2018, the comptroller served notice to the managers of The Bank of Nova Scotia, CIBC First Caribbean International Bank, Bank of St. Vincent and the Grenadines (BoSVG) and RBTT Bank Caribbean Ltd demanding that the banks pay to the Accountant General sums held on behalf of the Unicomer: an amount up to EC$13,556,007.30.

The letters outlined the provisions of the Income Tax Act and stated, among other things, that the banks were required to pay to the Accountant General on account of Unicomer’s liability under the Income Tax Act within 15 days of the date of service of the notice, monies payable to Unicomer, which they were liable to pay.

The letters also stated that the amount up to and not exceeding $13,556,007.30 was payable by Dec. 20, 2018 (in the case of CIBC First Caribbean International Bank; and RBTT Bank Caribbean Ltd.) and by Dec. 21 2018 (in the case of BoSVG; and Bank of Nova Scotia).

However, Unicomer wrote to the comptroller on Dec. 21, 2018 asserting that the comptroller’s letters of the previous day were unlawful.

Unicomer also wrote to the banks on Dec. 21, 2018 instructing them that the comptroller had no power to demand the referenced payments from them until the expiry of 15 days from the date of the notice to them and that he had no lawful authority to demand immediate payment.

The Bank of Nova Scotia paid to the comptroller the sum of EC$198,364.04 on Dec. 21, 2018 and informed Unicomer of this by letter dated Dec. 24 2018.

On Dec. 28, 2018, Unicomer filed an appeal in the High Court against the decision of the appeal commissioners.

Among other things, the company asked the court to rule that the assessment raised by the comptroller, which was maintained in his letter of March 29, 2017 — and which decision triggered the appeal to the appeal commissioners — be set aside and vacated and Unicomer’s liability for income years 2007-2011 be reduced to zero.

Unicomer also asked the court to order repayment of the sum of $1 million paid to the comptroller on Dec. 7, 2015 and $2 million paid to the comptroller Dec. 30, 2015 pursuant to the exercise of his statutory powers under the Income Tax Act with interest at such rate as this court shall deem fit.

The submissions

Unicomer’s argument was that based on the provision of section 105(1) of the Income Tax Act, the appeal commissioners, in their order, did not state that they had “confirmed”, “increased” or “reduced” the assessment of the comptroller.

The appeal commissioners having failed to do so, Unicomer further submitted, there was, in fact, no “order” issued from the appeal commissioners upon which the comptroller was entitled to take action.

The comptroller, on the other hand, argued that the appeal commissioners’ order was clear and had, in effect, confirmed the assessments made by the comptroller, a fact that the comptroller conveyed to Unicomer in correspondence dated Dec. 18, 2018.

The comptroller also submitted that in any event, the provision of the Income Tax Act that governs the actions of the appeal commissioners includes the power to make such order as they deem fit.

The appeal commissioner was, therefore, entitled to make any order that is additional to a confirmation, an increase or a reduction of any assessment, the comptroller argued.

Therefore, the fact that the order of the appeal commissioner had not specifically stated that the assessment of the comptroller was “confirmed, increased or reduced” was not fatal and as such there was a valid order upon which the Defendant was entitled to act.

The comptroller further submitted that in any event, Unicomer could not seek to argue that the order was unenforceable yet still seek to uphold a finding of the appeal commissioners in their favour with regard to the allowance for the deduction of royalty payments.

For the comptroller, it was clear that Unicomer had to choose their position, either the entire order was unenforceable, or the entire order was valid.

The ruling

In her ruling, Justice Byer confirmed the decision of the appeal commissioners on Nov. 29, 2018.

She further confirmed the assessment raised by the Comptroller of Inland Revenue, which was maintained in his March 29 2017 letter.

The court also ordered that there be no repayment of the $1 million paid to the comptroller on Dec. 7 2015 and the $2 million paid to the comptroller on Dec. 30, 2015 pursuant to the exercise of his statutory powers under the Income Tax Act.

7 replies on “Courts furniture store ordered to pay $12.7 million in taxes”

  1. There are no money in the revenue at the moment so how are this company g pop ING to get that kind of money to give the government on areas. You people are mad crazy.

  2. Junior Quow says:

    Congratulations to the Government and people of SVG on winning this one. These companies must learn to pay unto Ceasar what is Ceasar’s

  3. Pls take care to avoid the covid. Good really loves you, pls be safe get vaccinated asap and NEVER skip the second dose, only after 2 weeks of the 2nd dose you’re vaccinated fully. Eat + exercise healthy to avoid any clots pls use a mask with the full vaccine to prevent infections to unvaccinated people from any leftover virus in you from previous infections. Others and I also love you! Luke 14 :25-33 Forsake all you have everyone and yourself for Je

    Luke 16 :13 Work for Je not pay $$, then Je will give you and your family the food and clothing if they follow too

    Matthew 25 :34-36, Mathew 6 :3-4, Luke 12 :33 Sell everything you got and give to poor dying in hunger, and keep all giving in secret

    Mark 16 :15, John 17 :21 Share the Truth to everyone working with others in love & peace

    Revelation 13 :16-17 – 14 :9-11 Don’t take the mark of the beast right hand or forehead the only way to buy or sell *It is not covid vaccine or mask, but maybe a microimplant or quantum technology implantable, tattoo

    Revelation 17 :15-18 – 18 :8-10 U.S. Is most likely the Babylon to be destroyed in one hour, with fire.

  4. That’s alot of moola! There are certainly some entities that do not pay tax in SVG. Most entities are taxed way too high and cannot operate under such high taxes so they go belly-up. I wonder if there will ever be a better system in SVG where investors are encouraged to invest (and therefore hire more workers and expand) instead of paying most all profits to the governments. Does the government ever wonder why the business climate in SVG is so very, very poor?

  5. I am not Vincentian, but I have lived in the Cbean my whole life; I am yet to see employment expansion result in increased employment or enhanced pay/ benefits for workers. Just as in the US, the reduction of Corporate tax rates in Barbados, strengthened corporate finances and promoted stock buy backs, and provided wealth for shareholders. Very few companies permit employees to participate as shareholders.
    That said individuals have to pay their taxes despite illness, loss of jobs, even death.. Corporations must do the same without denying the Government’s their due .

  6. Nathan 'Jolly' Green says:

    They must be debt forgiven because they are a major employer. Over the last 20 years SVG has been forgiven debts by several countries and institutes. This is a good well run firm who are in trouble and deserve a break.

  7. Award-winning Businessman says:

    Taxes are way too high all over the Caribbean in comparison to earnings (remember Liat) but it is very true that Saint Vincent is among the highest. We witnessed that Donald Trump started an economic BOOM when he lowered taxes in the USA, but now the Democrats have found a way end that. The government of Saint Vincent does not care about the prosperity of the Private Sector so you will never see an improvement in economics here. All business will continue to struggle and it will be detrimental to hire employees.

    Government in Saint Vincent is TOO STUPID to figure out that making business stronger will in turn increase revenue.

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