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Wednesday, July 9, 2025

Espinet objects to terms of Govt Vat bonds

by

Curtis Williams
1870 days ago
20200525
Wilfred Espinet

Wilfred Espinet

Busi­ness­man Wil­fred Es­pinet has slammed the process for the pay­ment of Val­ue Added Tax Bonds which the gov­ern­ment is in­sist­ing will on­ly be done for busi­ness­es whose tax­es are paid in full and up to date.

In a let­ter to the ed­i­tor, Es­pinet, who was the chair­man of Petrotrin un­der the Row­ley ad­min­is­tra­tion and of Her­itage Pe­tro­le­um, said he was not against pay­ing tax­es but dis­agreed with the gov­ern­ment’s ap­proach

He said: “To­day I re­ceived a cir­cu­lar no­tice on the is­sue of Gov­ern­ment/Sov­er­eign Bonds in lieu of over­due VAT Re­funds to busi­ness. The cir­cu­lar stat­ed that a con­di­tion of re­ceiv­ing the Bond is hav­ing all tax­es paid up to date. While ir­ra­tional be­hav­iour seems to be the hall­mark of to­day’s politi­cians, it is unimag­in­able that a Gov­ern­ment will in­tim­i­date the pop­u­la­tion while fla­grant­ly breach­ing the reg­u­la­tions in ques­tion.”

Es­pinet ar­gued that the pay­ment of VAT is due at spe­cif­ic times de­fined in law. The pay­ment of re­funds sim­i­lar­ly has a de­fined pe­ri­od to be paid. He said de­lays in the pay­ment of ei­ther VAT or Re­funds are sub­ject to penal­ties.

“Over time, the prac­tice of ne­glect­ing VAT re­funds has be­come the norm and a method of fund­ing the Na­tion­al Bud­get, from debt that is nei­ther ne­go­ti­at­ed nor ac­count­ed for. A re­cent state­ment by the Min­is­ter of Fi­nance put it in­to per­spec­tive when he stat­ed that pay­ment of VAT Re­funds would not nor­mal­ly be paid out (es­pe­cial­ly to large firms). This prac­tice is per­pet­u­at­ed be­cause le­gal ac­tion against the State has no ef­fec­tive re­lief, even from a favourable rul­ing,” Es­pinet lament­ed.

He ex­plained that the re­cent de­ci­sion by Gov­ern­ment to reg­u­larise this through the is­suance of Bonds, as a swap for Re­funds, has been pro­mot­ed as a re­lief to busi­ness­es and said that his de­ci­sion to high­light the ab­sur­di­ty of de­mand­ing that tax­es be paid up to date is not an at­tempt to es­cape or de­lay pay­ments of tax­es.

“How­ev­er, I would like to point out the flaws of the process. Com­pa­nies are re­quired to pay tax­es quar­ter­ly. The ba­sis of cal­cu­lat­ing tax­es due in any one quar­ter is the prof­it made for the com­pa­ra­ble pe­ri­od the pre­vi­ous year. The law states that should there be rea­son­able grounds that your prof­its are re­duced from the pre­vi­ous year, you can ap­ply for a re­duc­tion in the tax­es due. How­ev­er, in re­cent times these ap­pli­ca­tions for re­duc­tions have been ig­nored or dis­re­gard. A case in point is the re­cent “Shut­down” im­posed on busi­ness­es by Gov­ern­ment, that in most cas­es, has elim­i­nat­ed all rev­enues,” Es­pinet wrote.

He said to de­mand tax­a­tion based on the com­par­a­tive pe­ri­od of the year be­fore is non­sen­si­cal.

Ac­cord­ing to Es­pinet: “The is­sue of the Bond is a con­ces­sion from the Busi­ness­es to the State. This should not come with con­di­tions. Ad­di­tion­al­ly, the reg­u­la­tions should be amend­ed to al­low Com­pa­nies to off­set VAT Re­funds against any Tax Pay­ments that are due.”

Business Trinidad and Tobago


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