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Manufacturers complain: Poor VAT returns causing issues in doing business
Small and medium manufacturers are likely to encounter a cash flow problem if they are not paid the rebate owed from their VAT returns.
President of the T&T Manufacturers' Association (TTMA), Christopher Alcazar said yesterday that in some instances, VAT rebates have been delayed in excess of one year.
"Some of our members especially the medium to smaller ones operate their business based on cash flow/operations, and to have the outstanding sums delayed sometimes by eight months if we are lucky, to one year or two years in other instances is really a heavy cost to run ones business," Alcazar said in emailed responses.
Alcazar's comments come on the heels of a November 28 statement from the T&T Chamber of Industry and Commerce suggesting that businesses are owed more than $5 billion in rebate.
The Ministry of Finance however subsequently stated on December 1, that the Government has been compliant in issuing VAT refunds to businesses.
Quoting the legislation governing VAT, Alcazar said the legislation states that businesses should be paid within a six-month period since interest can accumulate.
"These delays have resulted in some of our business operators delaying making decisions on reinvesting, it has, in some instances as well, also caused potential investors (foreign) to reconsider their position for doing business in the country."
He added that, "These are serious consequences, especially in these trying times when the country needs all investors, both local and foreign, to invest in their plant, machinery and equipment, so that they can produce more, employ more and export more, all in an effort to continue to grow the welfare of the companies, employees and country at large."
Recognising that there are challenges for the Government in making the payments, Alcazar suggested that there should be, "no VAT payment on the imports of raw material for production and secondly, a provision for "net off" where VAT is concerned, namely where the government owes VAT for one period, this can be netted off for VAT payments to be made by companies."
The TTMA is also calling for a meeting with the Ministry of Finance to discuss the issue.
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