The Lower House of Parliament supported the move of the Unincorporated Business Tax (UBT) to the Tax Administration and Procedure Act (TAPA) on Tuesday, with parliamentarians on the government side calling it an issue of “discipline”.
Prime Minister and Member of Parliament (MP) for the St John’s City West Constituency, Gaston Browne, called the Bill a “simple amendment” which is needed for the “sake of complete management of the various taxes” and to provide for registration of individuals who may be unregistered.
“It provides a full registration even for those who are not registered at this point, so that they can be virtually brought on to the register,” Browne said.
St John’s Rural West MP, Londel Benjamin said “It’s a Bill that will bring discipline to the country” by way of mandatory registration of businesses that make more than $42,000 a year.
The MP for St John’s City East, Melford Nicholas explained that the idea is to make businesses profitable through government concessions and grants with the expectation that they will pay tax on their profits to the government.
On the other hand, MP for All Saints East and St Luke and Leader of the Opposition in Parliament, Jamale Pringle, along with Barbuda MP, Trevor Walker, while they did not vote against the amendment, shared their views about the effect that Unincorporated Business Tax Act is having on small businesses since it was enacted in 2016.
Walker argued that had he been a member of parliament when the Act was passed, he would “never” have supported it because it is creating “an issue in this country by squeezing from the back pocket”.
“What you’re doing with the Unincorporated Business Tax is that you’re pulling it from the back pockets of small people in this country and it’s not right the way they are trying to do it,” he touted, telling parliamentarians that there is nothing fundamentally wrong with the government seeking to collect more revenues, but he felt that they were not “targeting the right set of people”.
Additionally, the MP reasoned that the current UBT law is very specific and if an unincorporated business fails to do certain things, there’s a section in the principal act that they’re penalised thereby eliminating the need to move it under TAPA.
“If they are not registered period, then clearly you have a problem so the Bill is trying to capture them by saying listen, whether you want to register or not, you’re going to be registered,” he said.
Meanwhile, Pringle shared complaints of small business owners about being unable to pay the UBT, far less the late charges that accompany them.
He was met with opposing views by government MPs who felt that he and the Barbuda MP were “playing politics” with the lives of residents.
For a better understanding of the amendment, OBSERVER media reached out to the Commissioner of the Inland Revenue Department, Ralph Warner, who informed that the change simply brings the UBT under another legislation — the Tax Administration and Procedure Act, which he said was “like a management piece of legislation for the Inland Revenue Department”.
“It is not a new piece of legislation; it was there all the time but when we introduced the Tax Administration and Procedure Act, a number of legislations were pulled under the Tax Administration and Procedure Act. The Unincorporated Business Tax Act, that was omitted, so this is basically to place it under the Tax Administration and Procedure Act,” he explained.
In fact, Warner shared that TAPA actually reduces some of the penalties that would have been otherwise compulsory under the UBT.
He said “Within the Unincorporated Business Tax, the penalties are actually higher so now that it is captured under the Tax Administration and Procedure Act, the penalties will be a little bit lower.”
TAPA also governs the Income Tax Act and the Travel Act and speaks to the management of penalties, interest, as well as failure to file and failure to pay under these pieces of legislation.
Warner confirmed that the inclusion of the UBT in TAPA will mandate businesses to get registered and gives the Inland Revenue Department discretion to review the businesses’ operational activities and make a determination on its start date if it fails to do so.
Only businesses that generate $3,500 or more a month or $42,000 or more per annum are affected by the Unincorporated Business Tax. This includes businesses operating under the Trade Licences Act; the Business Registration Act; the Licensing (Intoxicating Liquor) Act; the Telecommunications Act; the Rent Restriction Act; and the Professions Licensing Act, or if he/she is involved in a Partnership business or is engaged in any trade or business activity whether or not registered under the provisions of any law, except the Companies Act 1995.
Warner is encouraging business owners to come into the IRD and to access the guides online at http://forms.gov.ag/.