The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

Six months into the implementation of Value-Added Tax (VAT) there are still some mandatory registrants who have not yet come forward, the Ministry of Finances Financial Secretary John Rolle said yesterday, but he added that revenue intake from the tax continues to “line up with expectations”. 

Mr Rolle, speaking at a press conference yesterday at the VAT Unit and Department of Inland Revenue’s new headquarters on Carmichael Road, said that there has been penalties assessed against mandatory registrants who missed the November 30 deadline and and fines will continue to be assessed for those registrants who do not come forward.

“Businesses who are mandatory registrants, if they showed up after November 30 to register, there would have been fines assessed. Fines will continue to be assessed along those lines where you have mandatory registrants who have not yet come forward,” said Mr Rolle.

 He further explained: “We know of some businesses firsthand who still haven’t crossed the door. They are not charging VAT, we know that, but they still have had an obligation to resolve any issues they had in terms of getting registered.

“Those are cases where, even under the amendments to the business license Act, when they come forward and regularise their business license position, they will now encounter penalties under the Business License Act for late filing, late payment and they are going to see assessments under the VAT Act for the amount of time that they have been outside of the system in terms of collections and the filing.

“Businesses that are filing their returns late, they are being fined. That is happening on a regular basis. Those fines are being assessed.”

Mr Rolle said that on the issue of VAT pricing, there continues of be “isolated” cases where businesses are not fully transitioned to the inclusive pricing regime.

“We don’t think that it has been a challenge, but it is still an issue where you still have the isolated cases where businesses are not fully transitioned,” he said.

“It is not fair to the consumers who are already settling in to the new mindset of going into stores and seeing a price which they think is the all encompassing price. We’re inconveniencing the consumers if that is not the case.”

Mr Rolle said that the revenue intake from VAT continues to “line up with expectations”.

“I think that the intake so far continues to line up with expectations in terms of the one time compliance rate as well as payment of the VAT that has been declared to the government.

“We are seeing a very good response. As part of the process there is a very constant and close interaction with businesses to make sure that they not only file their returns on time but that they follow through with payment,” said Mr Rolle. 

He added: “The projection was that on a yearly basis the Government would see at least a $300 million increase overall in its revenue. We still expect that to be the case. The $300 million increase overall worked out to be a both $150 million on a half yearly basis. The actual amount of VAT that the Government will collect in both cases would be more than $300 million and more than $150 on a half yearly basis.

“The net increase also had to make provisions for about $100 million on a yearly basis from reduced Customs duty collections as well as the fact that the Government had eliminated the hotel room occupancy tax.

“When we did the projection initially for the first six months of VAT, we projected on a net basis to show the improvement in revenue.

“When you look at what the Government is projecting this time around in terms of the revenue figures, you would see figures in the budget that sum to more than $400 million. Those are the gross collections.

“To see the Government’s net position you have to be mindful that with all of the reductions in Customs duties plus what were reduced in January and the hotel occupancy tax, that is $100 million at least  that has to be recouped before we can even count the gain from VAT. You will see in actual terms more than $400 million in VAT collected.”