Business magnate Arthur Lok Jack yesterday called out Finance Minister Colm Imbert for crippling this country’s manufacturing sector with its slow pace in paying outstanding Value Added Tax (VAT) refunds.
Speaking during the question-and-answer segment of the T&T Manufacturers’ Association’s post-Budget media discussion at the Hyatt Regency Hotel in Port-of-Spain, Lok Jack said the Government had done well with incentivising manufacturers to export but at the same time was stifling their cashflows with the delay in VAT refunds.
Lok Jack said while he did not have many issues with Imbert’s Budget presentation on Monday, he did have one major issue and that was the VAT refunds.
“The main thing has been the VAT refunds because you encourage us by putting all sorts of incentives to go into the export market and when we go into the export market, we are paying VAT and we need to get those refunds back because, basically, we cost our export prices without VAT but we pay the VAT,” Lok Jack said to applause from the audience.
Lok Jack said this was a “tremendous blow” on the cash flow of manufacturers.
Lok Jack is the chairman of the Associated Brands Industries Limited, which has six factories in T&T.
“I think in my group alone, the Government has over tens of millions of dollars in VAT refunds long time now outstanding and we are not getting it back and this is money that we need that we don’t get and we have priced it in,” he said.
“And so, we have to use bank borrowing with high interest rates et cetera to do that, so I think this is one of the things that you can certainly work on to try and give us back these things.”
Lok Jack added, “You cannot incentivise us to get into exports and penalise us with VAT.”
During his Budget presentation on Monday, Imbert announced that the Government was able to pay out $4 billion in VAT refunds in 2022, which he said was significantly more than originally planned.
In her Budget response meanwhile, TTMA president Tricia Coosal also raised the issue of VAT refunds.
“The association hopes the disbursement of VAT refund continues rapidly in the coming fiscal year since the SME sector specifically suffers significantly from cash flow when payments are outstanding. As a result, TTMA looks forward to a continued roll out for its members in a timely manner for fiscal 2022-2023,” Coosal stated.
The San Juan Business Association, in its Budget response, stated that more attention should have been paid to VAT returns, adding, “We appreciate the $4B payout in 2022 but more still can be done.”