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Chamber confronts Govt on VAT arrears
As the country continues to grapple with revenue shortfalls in all areas of the economy, the T&T Chamber of Industry and Commerce is concerned over government's inability to settle outstanding Value Added Tax (VAT) arrears owed to individuals and businesses.
In a release, the Chamber deemed it, "Wholly unsatisfactory that VAT refund arrears stand at more than TT $ 5.5 billion."
They said the issue which was recently outlined in the IMF Country Report, remained, "Of critical concern to the business community, given its negative impact on the Ease of Doing Business."
They went on, "The Report states that at the end of March 2017, tax arrears stood at 11 per cent of GDP and T&T ranked 145th in the Doing Business survey’s paying taxes index."
The Chamber said it was concerned about the impact on the cash flow of VAT-registered businesses, as well as the prospect of non-compliance.
They 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, the added constraints from late or non-receipt of refunds impose yet another difficult burden upon the business community."
The Chamber added, "It appears that those who are already tax compliant are being penalised nonetheless."
Offering a simple, short-term measure which could be adopted by government, the Chamber suggested allowing companies to offset their refunds with payments due.
They acknowleged, "While this solution is not ideal, if applied, it would still offer some reprieve to companies for outstanding monies owed."
They said based on government's expenditure, the delay in issuing refunds is possibly one mechanism through which they have been able to show a reduction in spending for the financial year ending September 2017.
They concluded, "As representatives of the business community in T&T, the T&T Chamber demands that government take corrective action immediately, in what has evolved into a highly disruptive situation."
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