Chamber demands Govt address $5.5b VAT refund arrears

The TT Chamber is demanding the Government “take corrective action immediately” to bring some relief with regard to more than $5.5 billion in VAT refund arrears.

Describing the lengthy delays, now in excess of two years, as highly disruptive to business operations, the chamber is suggesting a short-term solution.

“Allow companies to offset their refunds with payments due. While this solution is not ideal, if applied, it would still offer some reprieve to companies for outstanding monies owed.”

The chamber lamented that tax-compliant businesses are apparently being penalised during a tough economic time.

“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, added constraints from late or non-receipt of refunds impose yet another difficult burden upon the business community.”

Referencing the recent IMF Country Report on TT, which estimated VAT arrears to stand at more than $5.5 billion, the chamber said the situation “remains of critical concern to the business community, given its negative impact on the ease of doing business.”

“The (IMF) Report states that at the end of March 2017, tax arrears stood at 11 per cent of GDP and TT ranked 145th in the Doing Business survey’s “paying taxes” index. At this juncture, (we are) concerned about both the impact on cash flow of VAT-registered businesses, and about the prospect of non-compliance.”

The chamber added that based on its understanding of how Government accounts for expenditure, the delay in issuing refunds is possibly one mechanism through which the Government has been able to show a reduction in spending for the financial year ending September 2017.