West: VAT refunds increase ASAP

MINISTER in the Finance Ministry Allyson West says Government will step up the reduction of the backlog of VAT refunds as the country’s economic circumstances improved.

She was responding to a question yesterday from Opposition Senator Wade Mark who asked, with the economic turnaround announced by the Finance Minister, what measures are being put in place to refund VAT owed by the Government to the Trinidad and Tobago Manufacturers’ Association (TTMA) members as well as other businesses.

West said VAT refunds was an ongoing activity by the Board of Inland Revenue (BIR).

“In addressing the issue of VAT refunds cognizance is taken of the country’s prevailing economic climate and its impact on Government’s fiscal accounts and its cash management capability. Accordingly, the level of refunds falls among one of several economic variables which are constantly monitored to ensure that Government’s overall macro-fiscal objectives are maintained in a scenario of other competing demands for financial resources. Additionally, the issue of refunds must also be viewed in the context of compliance and as such the BIR must perform the necessary audits and regulatory practices as a monitoring agency.

“Government is mindful that business entities rely on VAT refunds to support their cash flow requirements. Accordingly, the assurance is given that the level of VAT refunds is closely monitored in the context of the prevailing economic climate and once the threshold level of revenue inflows are achieved the commensurate adjustments to the level of VAT refunds will be effected.”

West reported in fiscal 2016 Government issued approximately $3.75 billion in VAT refunds to businesses or $312 million per month and in fiscal 2017 in an effort to reduce the backlog VAT refunds totalling $4.2 billion or $347 million were issued. She said refunds have continued in 2018 “and as our economic circumstances continue to progress Government will make every effort to increase the level of VAT refunds and reduce the backlog in the shortest possible time.”

Mark asked what was the amount in VAT refunds owed to businesses but West said she did not have that information before her.