Sunday 23 February, 2020

Gov't: Chamber Misunderstands IMF Report, 16B owed to state

The Finance Ministry is seeking to provide clarity to the Trinidad and Tobago Chamber of Industry and Commerce (T&T Chamber), following comments made by the Chamber in response to the International Monetary Fund Country Report on T&T.

On November 28, the Chamber issued a release demanding that the Government take corrective action to deal with the issue that VAT refund arrears stood at more than TT5.5B. 

The Chamber's interpretation of the IMF Country report was that the Government had failed to pay tax refunds on time, resulting in the billions owed to businesses.

It said, "While lengthy waiting periods were not uncommon, the situation has now worsened with business people experiencing refund delays exceeding 24 months. In an already cash-strapped economy, added constraints from late or non-receipt of refunds impose yet another difficult burden upon the business community. It appears that those who are already tax compliant are being penalised nonetheless."

The Chamber went on to propose that the Government allow companies to offset their refunds with payments due.

However, in a statement issued on December 1, the Finance Ministry said it needed to set the record straight. It noted that the Chamber misread the report.

"What the IMF was saying is that tax avoidance, tax evasion and tax leakage in Trinidad, which it has described as “tax arrears” amounts by its estimation to 11% of GDP, or $16 billion, which is the annual tax revenue being lost by Government. Therefore, the IMF did not at any time confirm that the Government owes businesses tax arrears of 11% of GDP. In fact, it confirmed the reverse."

The Ministry also clarified that the Government is not being punitive to businesses nor has it misrepresented expenditure in its most recent budget statement.

It said, "The Government has been compliant in issuing VAT refunds to businesses. For the fiscal years 2017 and 2016 VAT refunds totaling $4.2b and $3.7b respectively were paid by the Government to VAT registered businesses."

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