A tax amnesty will be in force until September 16 to allow taxpayers and businesspeople to pay outstanding taxes from previous years, Finance Minister Colm Imbert announced yesterday.
He also announced that the increase in NIS contribution, which was scheduled to have started this month, will also be deferred to September 5.
He detailed the developments yesterday in Parliament in presenting a bill for the variation of certain duties and taxes. This involved follow-ups on matters announced in the 2016 Budget and the April mid-year review.
On the tax amnesty, Imbert said some entities were taking legal action on tax issues and in the present situation, it was necessary to give taxpayers an opportunity to file returns and bring taxes up to date for Government to collect what is outstanding.
He noted former People’s Partnership finance minister Winston Dookeran had implemented a tax amnesty in 2011 and raised about $1.8 billion then.
Imbert said he was extending the deadline of tax payments and similar transactions from August 31 to September 16. This will apply to income tax payments, corporation tax, Business Levy and Green Fund levy payments, VAT collections, petroleum tax, as well as annual company returns.
He said returns could be filed for previous years up to 2015. Government will also waive all interest on outstanding returns once they are paid by September.
Among a list of penalty/interest and other waivers are interest charges on payments prior to July 1 regarding any tax, Business Levy or Green Fund levy due for payment at December 2015. Imbert said it was estimated the amnesty could raise about $500 million.
Imbert warned that once September 16 passes, all penalties would be revived.
“All those business people and individuals, please pay off outstanding returns by September 16, as well as finalise company returns by that date. This amnesty is to give citizens the opportunity to honour their tax obligations to the State without penalties and interest accrued over the years. But after September 16 the State will use the full extent of its authority to ensure compliance.”
In giving examples of some situations, Imbert said some non-governmental groups owed penalties of over $20,000 and some religious organisations had indicated they did not know they had to file returns.
On the NIS contribution increase announced in the Budget to apply from July 4, Imbert said that would be postponed to September 5.
In the Budget statement proposal, stemming from the latest NIS actuarial review which Government has accepted, it was expected NIS contribution rates and maximum insurable earnings (MIE) would increase from July 4.
The contribution rate was expected to increase from 12 per cent to 13.2 per cent and the MIE from $12,000 to $13,600.
The increase in the MIE projected an equivalent increase of 13.5 per cent in all contribution classes of insured people.
But Imbert said the NIB needed time to consult employers, employees and other stakeholders and the matter was on hold until September.