Imbert: Government moving to clear VAT debts

In this file photo, a happy Finance Minister Colm Imbert shakes his fist at the Opposition on in the House of Representatives. PHOTO BY ROGER JACOB -
In this file photo, a happy Finance Minister Colm Imbert shakes his fist at the Opposition on in the House of Representatives. PHOTO BY ROGER JACOB -

FINANCE Minister Colm Imbert said Government is moving aggressively over the next two months to clear Value Added Tax (VAT) debts owed to businesses.

He also said that contrary to claims by the Opposition and other people, the economy is performing well despite challenges it is facing.

He made these comments before the House of Representatives passed a motion to approve a report of its Standing Finance Committee on Wednesday.

On May 5, the committee approved $3.8 billion in additional funding for 22 ministries to continue operations until the end of the fiscal year in September.

Later in the sitting, the House passed the Finance (Supplementation and Variation of Appropriation Bill, 2023, known as the the mid-year review.

Imbert said application forms for VAT bonds are now available online.

"VAT bonds will be issued with a three-year tenure at a fixed interest rate of 3.15 per cent per annum."

He said, "Only applicants owed in excess of $250,000, would be eligible to receive VAT bonds."

Refunds of $250,000 or less will be paid in cash between May and June.

"We are going to clear off every single VAT refund that is of the order of $250,000, in cash, in the months of May and June. That is because we are committed to the small and medium enterprise (SME) sector."

Imbert said this is being undertaken after consultations between his ministry ande commercial banks.

Noting the current yield curve rate for government paper is 2.9 percent, Imbert said the commercial banks have advised the ministry that "the $3 billion in VAT bonds we will be issuing, can be converted at commerical banks at 100 cents on the dollar."

A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates.

Imbert's announcements were welcomed by the TT Chamber of Industry and Commerce, the TT Manufacturers Association (TTMA), the Confederation of Regional Business Chambers (CRBC) and the American Chamber of Commerce (Amcham).

In a statement, the TT Chamber welcomed support for the SME sector by "the settlement of the long-overdue VAT refunds."

It however noted Imbert did not address issues such as the revenue authority or property tax in his contribution. "We look forward to the minister addressing these soon."

TTMA president Roger Roach said, the payment of VAT refunds will allow" SMEs to reinvest, expand and grow, thereby becoming larger earners of foreign exchange for TT via exportation.”

Roach welcomed the online application for VAT bonds and the 3.15 per cent per annum interest rate on the bonds. The former shows Government's commitment to repaying VAT debts. The latter is likely to allow manufacturers to cash in the bonds at no loss.

Both will help the manufacturing sector greatly

The CRBC said, "This is indeed a move in the right direction."

The CRBC also welcomed Imbert's comments that more revenue is being realized in the non-energy sector.

Amcham said, "The decision to accelerate VAT refunds and announcement of an intent to clear outstanding receivables is welcome."

Also in his contribution, Imbert was disappointed that the Oppositon and other people "jump for joy," every time some entity gives a negative review of the economy.

In contrast, he continued, those same people are upset whenever the economy gets a positive review. "They all vex." Imbert said Government is not making any withdrawal from the Heritage and Stabilisation Fund at this time.


"Imbert: Government moving to clear VAT debts"

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