FOR about a week, the National Lotteries Control Board (NLCB) imposed a tax that, technically, did not exist. That’s because the formal proclamation which would make the ten per cent “lottery winnings tax” operational had not been issued.
Yet, between July 30 to August 4, the NLCB took $998,016 out of the hands of winners. No one has produced evidence of corruption or criminal intent. But at the very least the blunder is a serious sign that all is not well at the NLCB.
The issue is not which minister or Cabinet member was supposed to have sent the proclamation to the President. The issue is why the NLCB charged persons in the first place. The NLCB blamed the mix-up on the technology used to automatically deduct taxes.
Yet, did no one at the NLCB conduct any checks as to the date for which the proposed tax was to be implemented? Last year, Finance Minister Colm Imbert was pellucidly clear when he said the tax would come into force at a time determined by proclamation.
Whether or not the NLCB was advised as to a proposed proclamation date, it had a duty to ensure the relative proclamation was, in fact, issued before committing state resources to the task of collection.
Accidental or no, citizens were deprived of their personal property which, in any society is a serious matter. By taking sums in service of a non-existent tax away from winners, the NLCB transformed itself into a rogue State entity acting on the basis of vaps, not law.
And the consequences could well have been worse: a $19 million jackpot was won in the period in question. What is particularly aggravating is the fact that the NLCB had enough time to get up to speed with the relevant legal provisions. The law that introduces the lottery winnings tax, the Finance Act 2017, was assented since December 17, last year.
Section 2(2) of that Act clearly states the tax was meant to come “into operation on such day as is fixed by the President by Proclamation.”
Did nobody at the NLCB read it? Or did the NLCB know something that not even President’s House knew when it programmed its technology to automatically deduct starting on July 30? Who dropped the ball? Meanwhile, a messy situation will now have to be cleaned up. And it is not apparent that refunds will be easy to effect.
None of this sits easily with the fact that the NLCB has not been subject to audit and has consistently failed to file annual reports with its line ministry since 2012. The board must be held accountable for this latest faux pas. In this instance, it has pushed its luck too far.