A bill was passed on Thursday, giving Customs first bite at the assets of a liquidated import business, in cases where there are outstanding import duties.
Prime Minister Gaston Browne, who also holds the finance portfolio, said the intention was to secure the taxes owed which would have been deferred in recognition of particular circumstances.
“What we’re saying here is that in the event of liquidation, then clearly that particular outstanding amount to Customs should be paid as a matter of priority, because remember, Customs would have done the business a favour in the first instance because it should have been paid at the point of clearance.
“So what the Customs is saying, having done that favour for the debtor, they do not want to prejudice the collection of those amounts in the event of liquidation,” Browne said.
According to the PM, the absence of such a safety net could see the Customs and Excise Division withholding the discretion since taxes ought to be paid upfront. Import duty deferrals could run for as long as a year.
But Leader of the Opposition Baldwin Spencer in contributing to the debate, raised the issue of severance pay guarantees for staff as enshrined in the Antigua and Barbuda Labour Code, and expressed concern that the amendment ran counter to that.
“I think the Antigua and Barbuda Labour Code places certain benefits at the top of the priority list in terms of payment and they would be considered, under the circumstances, creditors as employees.
“I just want to be satisfied that this does not in any way affect that basic principle that has been established and we have known this for years,” he said.
Browne, in responding to the opposition leader, confirmed that the Customs Division would be given priority over workers in the instance of a business going out of operation with outstanding duty payments.
“Because let’s face it, in the first instance, the money should have been paid so ordinarily that money would not have been available to go to the staff in the first instance if it was paid, so you’re not depriving the staff of anything.
“And you would understand too that from time to time firms may have cash flow problems and they may need Customs to assist them by giving them some time to pay … But if we’re going to exercise that type of discretion then we must protect government revenues against the potential liquidation of the company or the firm,” the PM stated.
(More in today’s Daily Observer)