The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Total Value-Added Tax (VAT) registration applications have exceeded government targets by almost 30 per cent, a Cabinet minister said yesterday.

Michael Halkitis, minister of state for finance, told the House of Assembly that the VAT registration process had been a “success”.

He said: “The VAT registration process has been a success. The Ministry of Finance had targeted 4,200 registrants. The total applications for registration as of yesterday (Tuesday) was 5,446, which includes more than 500 which were only applying for a tax identification number (TIN).

“To their credit, the public officers have already vetted and responded to all of these applications. As a result, 4,431 entities have already been issued VAT registration certificates. Another 500 applicants have been issued tax identification numbers only.”

Mr Halkitis said VAT Unit staff were pursuing 615 cases that represent incomplete applications. “Although we have surpassed the goal for registration, the encouragement and compliance process has not stopped, as some mandatory registrants have not come forward,” he added.

“The Government would not impede the VAT department’s ability to canton those businesses who have failed to register,”

Mr Halkitis said the Ministry of Finance will this week circulate the long-awaited VAT Rules for public comment, noting that they deal with 20 topics.

“The VAT Rules contain many adjustments from the previously issued guidance notes. This is not a sign of uncertainty, but rather an acknowledgement that some things can be done differently without affecting the overall goal,” he added.

Mr Halkitis said many of the outstanding concerns raised by the Coalition for Responsible Taxation and various industry groups, a number of which were “technical” in nature, had been dealt with in the VAT Rules.

Confirming that discussion and changes to the VAT system would occur “well beyond the implementation date”, Mr Halkitis said the Rules were designed to clarify issues such as homeowners association fees, the treatment of financial services based on resident and non-resident status, and a variety of input tax credit-related issues and deferrals.

The Minister also revealed that, like vendors supplying the Government and major importers, real property taxpayers will be given TINs to help get a better handle on its arrears.

Mr Halkitis said the auditing of the Government’s real property tax arrears was “leading to a scaled back estimate” of the $550 million previously thought to be owed.

“On Business Licences we are witnessing signs that our approach to VAT registration and issuance of TINS for importers is bringing more businesses into compliance,” Mr Halkitis said.

He added that owners of commercial rental properties, doctors, attorneys and lawyers had all come forward to apply for first-time Business Licences, while the “integration” of VAT and Business Licence functions by 2016 would “set the stage” for greater compliance.

Mr Halkitis said the Ministry of Finance has secured a building which will house the agencies responsible for VAT, Business Licenses, real property tax and Stamp Tax come February 2015.

Their amalgamation into the Central Revenue Agency, he added, will be addressed in the 2015-2016 Budget announcement in May.