Basseterre, St. Kitts, April 14, 2016 (SKNIS): Claims by members of the Opposition St. Kitts and Nevis Labour Party, almost weekly on the Freedom FM “Issues” programme, that the Government of National Unity has imposed new taxes on the people of the federation have been rubbished by the chief tax administrator, Comptroller of the Inland Revenue Department Edward Gift.
The Opposition Members have continued to spread that the annual license fee of EC$500.00 for a renter of property is a new tax implemented by the government of the day, despite being in government for 20 years and knowing that there is absolutely no veracity to these claims.
Appearing on the Government’s weekly radio programme “Working for You” on Wednesday (April 13), Mr. Gift said that the present government has not imposed any new taxes but that The Licenses and Occupations Act that was passed in 1972 and subsequently amended states and requires “that if you are a renter of property, you shall pay an annual license fee of five hundred (EC$500.00) a year.”
“That law has been on the books for a very long time and what the department has sought to do is that there is a lot of taxpayers who have complied with it, (but) then there is a lot of taxpayers who were simply avoiding paying the tax and the department has contacted them and said listen we recognized that you have not registered for the tax but the information that we have gotten is that you should be paying,” said Mr. Gift, while indicating that the information received comes from persons who are paying the tax and who deem it unjust that others are not paying it.
“It’s not a new law, we just want to ensure that we enforce the laws that are on the books because if we start cherry-picking which law that we want to go and enforce… or if we at the department decide we are only going to enforce certain taxation laws, what would happen in terms of compliance and persons paying the right amount, so that is the real purpose of what we have been doing,” the Comptroller of the Inland Revenue Department said, while emphasizing “it’s part of the activities where we try to improve compliance and what we want is the right person, paying the right amount of tax at the right time.”
“That’s all we want and if you have overpaid to the department we have a system in place where we ensure that you get a refund,” he added. However, he also pointed out that “by not registering and not paying the taxes, you are actually engaging in tax evasion which is against the law.”
Mr. Gift also said that some landlords are “going to tenants and saying I have to increase your rent because I have to pay this new tax at the Inland Revenue Department” and “using this as an opportunity to raise their rent as though it is some sort of new tax that the department is collecting.”
“That is not the case. The person is not liable to pay a tax. They are liable to have a business license,” he said.
According to the chief tax administrator, landlords should desist from doing this and their tenants should refuse to pay the increase while at the same time demanding that proof from the Inland Revenue Department of this so-called new tax be presented to them.
Additionally, Mr. Gift has exposed the barefaced lie presented in an article in the Labour Spokesman of April 01, 2016, titled “PM Harris to Pile on More Taxes on Residents, New Family Businesses Increase” which claimed that the Dr. Harris-led Administration has introduced legislation “to slap exorbitant late payment fees on the people and businesses in St. Kitts and Nevis…”
Mr. Gift reiterated that the Government has not introduced any new taxes but rather has sought to amend existing legislation that was flawed and which added unnecessary burden to taxpayers.
One such legislation with errors is the Tax Administration and Procedures Amendment Act (TAPA) of 2014. According to the Comptroller of Inland Revenue, the former administration in Amendment No. 7 of 2014 amended Section 37 (1) of the TAPA to ensure that a late payment penalty of 10 % that was only applicable to VAT tax payments was applied to all taxes, licenses et cetera collected by the Inland Revenue Department.
Mr. Gift said that the amendment was incorrectly made to Section 37 (1) (a) and (b) relating to penalty for late filing and that this has resulted in taxpayers now being subjected to penalties in excess of 120 percent on an annual basis, which is abusive and harsh and was not the intent of the present Parliament to have such a penal tax regime.
He said that the error in the amendment of 2014 of the TAPA is that it increased the tax that was already there for persons who file taxes late from 5 percent to 10 percent but that the Government in bringing legislation to Parliament has returned the late filing payment to 5 percent as it always was when the TAPA was passed.
Mr. Gift also said that there are persons who qualify as taxpayers pursuant to section 2 of the Act but who are exempt from the payment of any tax but who are required to file information with the Inland Revenue Department and that failure to do so results in a $1000.00 fine. He said that some persons who fall in this category have not been compliant with the law and that the Inland Revenue Department is enforcing the law.
He also said that the $100.00 per month for when you file a return late was in existence by the prior Parliament and is not a new tax as that is what was always collected.
Mr. Gift made it clear that there were no new taxes but that all citizens must pay their taxes as good citizens building the nation.
Since the Government of National Unity assumed office on February 16, 2015, it has declared that it has no intention of taxing people to death and have since removed the 17 percent VAT (Value-added Tax) from all food, funeral expenses and medicines.