By Elesha George
In the wake of a recent tax adjustment and one pending, members of the public and business owners are raising concerns over the lack of consultation before significant tax legislation is passed.
The discontent stems from a series of recent tax-related actions taken by the government, including a two percent increase in the Antigua and Barbuda Sales Tax (ABST) on goods and services implemented at the beginning of January.
This increase, along with the newly proposed tax amendment bill which aims to halve the time businesses have to submit ABST returns, has sparked criticism due to what many residents perceive as insufficient consultation with both the business community and the public.
The Antigua and Barbuda Chamber of Commerce recently convened its post-biennial general meeting, during which discussions veered towards the repercussions of the recent sales tax hike and the proposed tax amendment bill. Business owners expressed disappointment over the apparent lack of engagement prior to these tax adjustments.
According to the Chamber, there is a widespread demand for more thorough consultations before implementing tax-related legislation. Concerns have been raised regarding the timing and the way information is disseminated about tax changes, citing inadequate response time and the financial strain of adapting to sudden adjustments.
Businesses were compelled to swiftly adjust their pricing structures in response to the recent tax changes, incurring additional manpower and administrative costs. Despite these challenges, the government is pushing forward with further tax legislation aimed at reducing the timeframe for businesses to file their taxes.
The Sales Tax Amendment Bill passed the Lower House last Thursday. The existing law provides for up to 30 days and an additional 15-day window to file. Under the proposed changes, taxes will be due no later than 15 days after each tax period, significantly reducing the current window provided for filing. Once approved by the Senate, the changes will take effect on March 1.
“It applies from the collections that will take place March 1st and to the end of March. So, by the middle of April, the 15thh of April, those who’re collecting these funds on behalf of the government are required to pay those over to the Inland Revenue Department,” Prime Minister Gaston Browne explained.
The bill’s passage in the Lower House, however, has not been without opposition. Some members of the opposition have raised concerns, emphasising the need for the government to prioritise tax collection from large businesses that have reportedly evaded their tax obligations.
Barbuda MP Trevor Walker said the government was “not trying to address the fundamental problem” but instead seeking to penalise the businesses that are already complying.
In response, the Prime Minister said the government could no longer take the burden of waiting to be paid taxes that are due while these businesses reinvest it in their operations.
He said they were collecting “trust money” that belongs to the government.
“So, we’re trying to regularise things here to make sure that we have better cash flow so that we can pay our bills on time rather than be consistently late. So, this is all part of the new discipline of ensuring that we meet our obligations on time,’ he explained.
But while acknowledging the government’s reasoning, many business operators here still believe that advance notice and consultation would go a long way in helping them to prepare for the tax reforms ahead.
