Tuesday, April 16, 2024

EDITORIAL: Clear air on refunds

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BETWEEN NEXT MONTH and the end of April, Barbadians will need to file their 2014 income tax returns. And unless the Barbados Revenue Authority (BRA) sends out the thousands of refunds it owes to taxpayers within the next few days, it will be the first time ever that Barbadians will have to pay outstanding income tax without having received their refunds from the previous year.

This is deplorable!

BRA’s officials need to tell the public how they hope to expedite the refund process. And if they cannot – as we suspect, given the repeated statements about Government’s cash flow problems – they should say what arrangement the agency is willing to put in place in lieu of the refunds.

For instance, would BRA allow taxpayers who have to pay other taxes to trade off what they owe against the refund due? Or would the agency subtract the refund from the amount of those who owe it money for whatever reason.

The BRA also needs to tell taxpayers if interest will be paid on overdue refunds. Since October 31 has gone, and no refund has been forthcoming, the taxpayer should be paid interest. Will the BRA pay this or send cheques with an October 2014 date, which would be valid if cashed by April.

Though this would be legal, it would worsen the bad taste already in taxpayers’ mouths because of the delay, and create animosity against the agency.

And how will they handle interest owed with direct deposits to taxpayers’ accounts?      

The BRA should tell us too, if the situation is so dire that taxpayers would have to accept the tax certificates floated by Minister of Finance Chris Sinckler last November.

Speaking on the television programme The People’s Business, Sinckler said if Government cannot pay all the returns within a reasonable time, taxpayers would be given “an interest-bearing instrument” like a tax certificate instead.

At that time the minister did not go into details as to how this would work, only saying the delay in expediting the thousands of income tax returns was due to a cash flow challenge Government was experiencing.

On Wednesday, Prime Minister Freundel Stuart weighed in on the issue, reiterating that Government’s cash crunch was responsible for the delay in paying the income tax refunds in particular.

Addressing business leaders at the Barbados Chamber of Commerce & Industry’s first monthly luncheon of 2015 at the Hilton Resort, Stuart said: “We have been going through some challenges in terms of cash flow as a result of the overall slowdown . . . . But I am aware that these things are being steadily handled.

“One thing you can be sure: if Government owes you money, they will pay it. Government does not default on its obligations and certainly the Government over which I preside and the Cabinet that I have are too sensitive to issues of good faith to allow defaults of that kind to become too chronic,” promised Stuart.

Such assurances notwithstanding, most taxpayers still want to know when, and in what form their refund will be paid.

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