Tax increases on alcohol and tobacco products are perfectly legal despite yesterday's lack of debate in the Senate on an order concerning the taxes, Finance Minister Colm Imbert has said.
He clarified the situation after a planned Senate debate on the order was cancelled by Government yesterday.
Opposition Senator Wade Mark expressed concern at the "surprise" procedure, which he said had never been done. He said the Opposition would research the matter and if necessary may challenge it in court.
Mark claimed if the "lack of procedure" yesterday made the taxes on alcohol/tobacco products illegal, Government may have to return duties already paid on those items.
The situation arose in the Senate when debate on orders concerning Customs import duty (Caribbean Common Market) and Excise duty (alcoholic beverages and tobacco products) were to be debated. The orders stemmed from tax increases, including online taxes, in the 2017 budget delivered in September.
While the orders were on the agenda, Leader of Government's Senate Business, Franklin Khan, announced they would not be debated. He revealed Government had received an opinion from the Treasury Solicitor which he read out.
The Solicitor stated that "in the interim, I'm of the view the provisional collection of taxes order 2016 continues in operation and will continue in operation until Finance Bill 3 and the relevant orders 2016 completes its full passage of the Parliament and the Act is assented to by the President.
"Please note this process must be completed within the four-month time frame, beginning October 29 2016 and ending February 19, 2017. During this time, I'm of the view it is permissible for the State to collect and continue to collect online taxes and the rest."
Khan said that meant "we have some time. I want to give the Senate time to study the provisions in detail before we reconvene the debate." He proposed the Senate be adjourned to a date to be fixed.
But Mark objected, saying Government was making an error. He called for the Treasury Solicitor's opinions to be produced.
"We have extreme difficulty with that position, given that the experience and practice of the Parliament over the years is to deal with these matters according to law," Mark added.
Independent Senator Dr Dhanayshar Mahabir also said he was surprised.
"Government is saying there is a legal opinion but there could be a contrary legal opinion also," he said.
Khan promised to produce the legal opinion.
When the matter was put to a vote, 19 voted in favour of adjourning, including Government and Independent Senators Ian Roach, Sophia Chote, David Small and Paul Richards.
Mahabir voted with Opposition senators against adjourning. Independents Taurel Shrikissoon, Stephen Creese and Jennifer Raffoul abstained.
Mark later told reporters the orders stipulated they had to be submitted in 21 days and yesterday was the 28th day. He said Imbert couldn't unilaterally impose the taxes without Parliament sanction, though he noted the Senate didn't have power to stop the money bill. He questioned why the orders were put on the agenda if the Treasury Solicitor's opinion said otherwise.
Imbert, subsequently clarifying the situation, said: "Senator Mark is mistaken. These particular orders deal with customs and excise duties on alcohol and tobacco. The law simply requires them to be submitted to Parliament within 21 days of their publication, which was done last week. We now have until February 2017 to debate them in the Senate.
"These taxes (customs/excise duties) on alcohol and tobacco aren't contained in the bill before the Senate and are perfectly legal. Rather than being in the bill, the taxes are dealt with via the orders published in the Gazette on November 20, 2016. Once the orders are published and submitted to Parliament within 21 days of publication, the taxes are collectible and legal."
He said Government had four months from November 20, 2016 to pass the Provisional Collection of Taxes Bill which deals with Government savings bonds, the "millionaires' tax" and other measures.