Joint Chambers ask Govt for tax breaks, help for self-employed

BUSINESS CHAMBERS are asking the state to intervene with tax credits to companies and income support to the informal economy as the country faces economic constraints as it attempts to mitigate the covid19 pandemic.

In a joint statement, the country’s biggest business advocacy groups, the American Chamber of Commerce, the Energy Chamber, the Chamber of Industry and Commerce and the Manufacturers’ Association, along with the Confederation of Regional Chambers, noted that while they appreciate the government’s current interventions, more is needed in light of the “unprecedented nature of the crisis facing the world and the complexity of dealing with the fallout.”

The groups highlighted five issues in particular it believes must be considered.

Firstly, they asked Government to consider a tax credit on salaries for companies that are unable to make a profit during this time since the majority of businesses will be suffering from a near total collapse of sales, and consequently, loss in income. This credit will help support employee retention. The chambers proposed that for each employee registered businesses keep on payroll, the state would grant an additional tax credit of between 100 per cent and 150 per cent of the first $6,000 of an employee’s salary. The credit would be added proportionally over three years starting in the third quarter of this year. The chambers also proposed that government extend income support to the self-employed and their employees in the informal sector under the same terms as the salary relief grant, so long as these businesses and their employees register with the Board of Inland Revenue.

“Unregistered businesses could be encouraged to register with the understanding that they will be forgiven for past non-payment of taxes but will be required to pay going forward. Such a move will widen the tax net and assist with the rebuilding Government revenue once business and social activity return to some level of normalcy.”

The third suggestion was a National Recovery Fund as a way for the State to mobilise the excess US and TT liquidity in the banking system. Any business can contribute but with an incentive by way of tax deduction over the next five to ten years. The fund should be used to improve ease of doing business and other employment generating activities.

They also want tax deferrals, even as they understand the kink that could put in Government’s cash flow.

“We ask Government to still consider a deferral of corporation tax and VAT payments through June 2020. We also ask for a waiver of penalty interest for late payment of same for the first and second quarters of 2020.” The group did implore all businesses, however, that if they could pay their taxes to do so, as well as other payments like national insurance and health surcharge. The final request was clarity on the education system, and a clear plan that would ensure teaching and learning was able to continue into the next school term. While the group commended companies that facilitated online learning, it acknowledged that not all children had access to technology.

“While we recognise that these measures are but a small part of what needs to be done to bring stability and then get to recovery, we do hope that the Government will consider and implement these measures as we believe they will go a long way in building trust and confidence and give business some minor, but needed relief in the current, very difficult environment,” the chambers said.