The Upper House of Parliament has approved the Tax Administration Bill 2016 which is geared at ensuring the efficient collection of taxes and other fees by government.
The new Bill will now harmonise many of the different tax laws including the Value Added Tax (VAT) Act of 2009, the Excise Tax Act, Income Tax Act, Property Tax, Property Transfer Tax Act, Annual Stamp Tax, and the Provisional Collection of Taxes Act that are already enforced.
Leader of Government Business in the Senate, Minister of State for Education, Senator Simon Stiell who piloted the Bill which has ten parts and two schedules described it as being complex.
Sen. Stiell indicated that the general administration of the tax is assigned to the Comptroller of Inland Revenue Division (IRD), and also outlines the role of the Comptroller and his deputy, and other persons within the Department.
He said the Comptroller is subjected to the general control and supervision of the Minister responsible for administering the Act.
Tax payers will now have a unique identification number for all tax transactions which will ensure the efficient and effective communication between IRD and taxpayers on all matters.
The Bill also covers the need for confidentiality to be exercised at all times in the system.
Sen. Stiell indicated that if confidence in the tax system is to be established, with the sharing of confidential information, it speaks to integrity in the system.
He told his fellow Senators there are measures outlined within the Act that illustrate the level of attention that is paid to ensuring the confidentiality of individual tax payers’ financial information.
“That confidentiality extends beyond the Inland Revenue Division, but extends to other third parties who may be required from time to time, or for approved purposes to have access to tax payer information,” the Government Senator said.
However, Private Sector Representative in the Upper House, Sen. Christopher De Allie who supported the Bill raised a number of the business sector concerns.
Sen. De Allie admonished the private sector to pay particular attention to Section 28 of the Bill which gives the IRD Comptroller a lot of powers to interrogate their system to third parties including banks.
He also encouraged his business associates to pay close attention to Section 58 that addresses delinquency.
According to Sen. De Allie, someone who is delinquent in paying his taxes can find himself running in difficulties with financial institutions, especially if he wants to secure a mortgage.
Sen. De Allie who informed the Senate that the private sector had extensive consultation with IRD on the new legislation felt that all businesses that are liable for taxes should submit to the IRD some form of financial statement based on revenues.
He said the private sector believes that one of the existing loopholes with tax collection is that information is not accurately gained at Inland Revenue.
Lead Opposition Member in the Senate, Nazim Burke who also gave his support to the Bill believes that it is necessary to have a general law that deals with the administration of taxes that can afford some predictability and certainty in the way that taxes are administered.
Sen. Burke who served as Finance Minister in the previous National Democratic Congress Government of 2008-13 believes that a good measure of a tax system is the ease with which people can pay their taxes.
However, he pointed out that he did not see a number of things in the new legislation that would make it easier for people to comply with the law.
“You have to make it easy to pay, you have to make it easy to comply, you have to make it equitable. These are all attributes of a good tax system,” he said.
Sen. Burke also called on government to issue a statement at the end of the year showing the incomes that were paid to public servants during the course of the year and the taxes that were deducted from their salary.
In his contribution, Labour Representative, Sen. Raymond Roberts called for the consciousness of every Grenadian to be created on the importance of paying their taxes to the State.
Sen. Roberts is confident that if that level of consciousness begins from the primary school right through the higher educational level that the State will have very few problems in people paying their fair share of taxes.
Grenada had found itself in dire financial straits in 2013 after defaulting on payments to its bond holders.
The ruling New National Party (NNP) administration of Prime Minister Dr. Keith Mitchell was forced to introduce a series of austerity measures as part of a deal worked out with the Washington-based International Monetary Fund (IMF) to tackle its severe fiscal problems.