The T&T Manufacturers’ Association (TTMA) says not enough effort was made by Finance Minister Colm Imbert to address approximately $6 billion owed in VAT returns.
Reacting to the 2020 budget, the TTMA acknowledged what it termed the Government’s “ ingenuity” in its attempt to address the VAT issue by proposing an initial $3 billion interest bearing bond facility, but felt not enough was done.
“We regret it is not enough to offset the cost of doing business. SMEs stand to be most hard hit by this and we are concerned about their survivability in the near to medium term. In this regard, we will continue to lobby for a VAT net facilitation for our membership and in particular the entrepreneurs who need a different solution from what has been proposed,”the TTMA said in a statement issued yesterday.
It said one concern remains the cost of transferring or trading the bonds to potential buyers.
The TTMA noted that the existing housing bond of 4.5 per cent is more attractive to potential financial institutions, adding that it would have been ideal if priority treatment could have been given to this VAT bond facility.
The TTMA however, applauded Government’s initiative of the extension of the promotional allowance for CARICOM for first time exporters which will redound to the benefit of the SME sector whose main export market is CARICOM.
“The existing ‘Promotional Expenses Allowance’ allows for a maximum of 150 per cent of the amount actually expended for the purpose of creating or promoting the expansion of foreign markets for the exports of certain goods and services,’ the TTMA added.
The group said it was heartened by the initiatives of Government to address environmental concerns, for example the introduction of the LED bulbs, the incentive on solar water heaters and the use of “environmentally unfriendly” packaging materials.
“While this initiative is commendable, we must consider the implications for those that are currently in the sector and therefore we propose a framework to buffer those stakeholders in the shortest time frame possible.
“It is commendable that the government sought to address legislative gaps to create a more enabling environment,’ the TTMA advised.
It said procurement legislation, the Revenue Authority and addressing the licensing framework are all welcomed measures that can have redounding benefit to the business community and by extension the population.
“However, we note that these proposed amendments to the existing frameworks have been spoken to in the past without execution in a timely manner. In this regard, the TTMA looks forward to speedy implementation of these measures,” it added.
The TTMA also said it is heartened that Government has realised that the way to raise revenues is not by placing more burden on the already tax paying compliant business sector and public but rather seeking to capture those that are evading the tax net.
“In this regard we welcome initiatives to build competencies in collection mechanism and commend the government on its collection of $2.382 billion from the 2019 tax amnesty,” the TTMA noted.