Minister of State for Finance Michael Halkitis yesterday confirmed that an amendment to the Value-Added Tax (VAT) Act would not require all quarterly or biannual filers to pay collected VAT to the government on a monthly basis, contrary to earlier reports, but would instead enable the VAT comptroller to crack down on "bad boys" missing filing deadlines.
Speaking with Guardian Business, Halkitis clarified the reach of the recently tabled Value-Added Tax (Amendment) Bill, 2015, stating that the bill would enable the VAT comptroller to require monthly VAT filings from delinquent quarterly or biannual filers, while also allowing the comptroller to approve businesses for monthly filing.
"What that requires is that the comptroller can say to you that you can or that you have to pay monthly. So it'll be either you have a problem where you pay quarterly but you haven't been paying on time so you can say 'you have to pay monthly'.
"It doesn't mean that everyone has to do it, it gives the comptroller the authority to say, 'you've been a bad boy, you have to pay'," said Halkitis.
The vast majority of the country's roughly 5,600 VAT registrants file quarterly. However, the VAT Department has increasingly encouraged small and medium-sized enterprises (SMEs) to file monthly to cut down cash flow concerns and minimize the potential for businesses to misappropriate tax revenue collected for the government since VAT's implementation in January. In keeping with that drive to curb misplaced funds, the amendment would further amend the VAT Act to encourage businesses and professionals collecting VAT to hold the owed taxes in an account separate from any other assets or possessions.
The amendment further requires all VAT taxpayers to provide electronic files with particulars on VAT invoices, tax credits, and debit notes issued or received by VAT registrants. VAT Unit officer Benjamin Miller told Guardian Business last week that manual invoicing remains prevalent among Family Islands business owners, who remain slow to adopt electronic point of sales (POS) systems.
While Halkitis said that small business would be permitted to continue manual VAT invoicing for the time being, the VAT Department strongly encouraged a switch to electronic record keeping to both increase the department's ease of processing filing and cut down on opportunities for fraud.
"You can keep it, but what we're trying to do is encourage electronic keeping of all of these records and of course there's a transition period. We'll eventually try to weed it out because nobody wants big stacks of paper. Back in January we made all point of sales systems duty-free so that should bring down the cost of those as well.
"What we're trying to do is get a system where people are paying and filing electronically so that we can move to a paperless system," Halkitis said.
Click here to read more at The Nassau Guardian
