The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top Ministry of Finance official believes the compliance rate for quarterly Value-Added Tax (VAT) filers will “not be as high” as that for larger companies, suggesting an 80-90 per cent level would be “great”.

John Rolle, the acting VAT Comptroller, told Tribune Business that his team was today bracing for “the largest uptick in activity” yet seen as the April 28 deadline for quarterly filers to submit their first-ever returns/payments looms.

With the 5,600 quarterly filers, those businesses with annual turnovers of between $400,000 to $5 million, accounting for more than 80 per cent of VAT registrants, tomorrow’s deadline represents the first true test for the Government’s tax reform centrepiece.

Not only will it determine whether the Government’s systems can cope with a high volume of filers, many of whom will have left it late, but also if its revenue and wider fiscal projections are likely to be met.

“We saw a good amount up until yesterday,” Mr Rolle told Tribune Business at the end of last week. “We do see the always typical trend, where you have a pick-up in activity as the deadline approaches.

“I expect that on Monday we’ll see the largest uptick in activity. The response is in line with what we expected; last minute. It would be good if it wasn’t that.”

Mr Rolle, who is also the Ministry of Finance’s financial secretary, told Tribune Business that quarterly filers were unlikely to match their monthly counterparts for compliance when it came to submitting their completed returns, and due payments, by the due deadline.

“My expectation is that the rate will not be as high as for large businesses, where we have seen 90 per cent to 95 per cent [compliance],” he told Tribune Business.

“I think that if we have a compliance rate of 80-90 per cent, that would be great. It’s hard to predict, but I expect the compliance rate [for quarterly filers] will be a high rate.”

Mr Rolle also anticipated that returns and payments from quarterly (every three months) filers may still “be trickling in after Tuesday”, but stressed that the VAT Unit was more interested in ensuring all eligible tax-paying businesses went through the process as opposed to meeting a strict deadline.

Edison Sumner, co-chair of the Government-appointed VAT Education Task Force, told Tribune Business that the quarterly filers were “likely to surpass” his initial prediction of a 75 per cent compliance rate for the April returns.

“Based on the level of interest expressed, calls coming through and public consultations, I think we will exceed that 75 per cent,’ Mr Sumner said.

“I think you’re looking closer to 100 per cent compliance. I think it’s reasonable for us to expect full compliance from the quarterly filers going forward. We have no reason to think otherwise.

“The companies filing so far have been very co-operative with the process. The questions raised and companies seeking assistance tells me that if we do not see full compliance, certainly it will be near 100 per cent compliance for all quarterly filers in the period.

“As we gauge it against what we saw from the monthly filers, those companies earning more than $5 million per annum, that went very well,” Mr Sumner added.

“They exceeded our compliance expectations, and there’s no reason for us to be expecting the quarterly filers to be any different.”

Mr Rolle, meanwhile, again urged VAT-paying businesses to allow two days for their tax payments to reach the Government’s bank accounts.

He added that small businesses, owing sums around $1,000 “or in that range”, would probably be able to pay via the Government’s electronic system via debit or credit card.

“We’ve seen an increased volume of calls, with people asking for assistance and trying to complete the process of complying with the information by going through the form and making a submission,” Mr Rolle told Tribune Business.

He added that the VAT Unit was attempting to “build up a comfort level” among registrants when it came to using the electronic system to submit returns.

“It’s important for the taxpayer to at least get to the stage where they are interacting with the online form,” Mr Rolle said, emphasising that VAT registrants did not have to complete their submission in “one shot” but could return to it another time.

He added that the Ministry of Finance’s system also showed registrants what the various VAT-related calculations looked like in ‘real time’.