Mystery surrounds the exact amount of money corporate and individual tax payers owe Government, with the passage of time, staff and technological issues proving major stumbling blocks to resolving the problem.
And as officials at Inland Revenue, Customs and Excise Department and associated Value Added Tax Department try to resolve the arrears problem, now estimated to be at least a combined $636 million but some of which is unlikely to be recovered, they have been given four weeks to provide Parliament’s Public Accounts Committee with information to come up with a solution.
Additionally, with about $175 million in VAT refunds alone owed to Barbadians, PAC Chairman Leader of the Opposition Mia Mottley, Government representatives on the committee and Auditor General Leigh Trotman saw the need for an urgent resolution.
The issue was among several related to Government’s finances discussed when the PAC met for more than three hours today in the Senate chamber, taking evidence from Inland Revenue, Customs and VAT officials.
Trotman, who raised the issues discussed repeatedly in recent annual reports, said it was important for them to be resolved, including exactly how much money government was owed and how much it had due to tax payers
“In terms of Inland Revenue the issues we have had over the last few years had to do with both revenue and receivables.
“We have had a challenge in terms of concrete information for receivables. On a couple of occasions the department has indicated that they could not present information for the receivables. The issue is that these receivables are quite significant, running into $239 million, … but we were not able to confirm this balance with the department,” he said.
“The accounts of Government are on an accrual basis and on the balance sheet this would be an asset so here it is that we have a $239 million asset stated by the Treasury, but the department was unable to provide information to verify the number. We have had challenges with verification of these receivables for a number of years actually,” he added.
The Accountant General’s Office was also unclear about the matter based on the information it had received from Inland Revenue Inland Revenue’s Acting Deputy Director, Tyrone Lavine, one of those giving evidence at today’s public session, told the committee his organisation had challenges, including insufficient staff and the calculation of penalties and interest on the arrears.
“These figures are estimated figures (and) date back to probably 1980 or thereabouts so it’s an accumulation of figures and the penalties and interest … are really the amounts that really would make the figure that higher. The new system which we have implemented from 2008 still has some challenges, hence the calculations of penalties and interest are not working as they should, so there is a need for a lot of manual work in verifying some of the calculations,” he noted.
“At present we have the services of a consultant who is also endeavouring to assist us in resolving some of these difficulties. So this could be the reason for the hesitance in providing a figure which we might not be certain of,” he added.
Acting Comptroller of Customs, Annette Weekes, also saw a need for clarity on the monies owed to Government, noting the circumstances her agency and the related VAT Department faced were similar to those of the Inland Revenue Department. She also said inadequate staff was a big problem, something which was significantly affecting the organisation’s ability to do its work.
“We also have the issue and problem with respect to staffing. That has not been addressed because … the Inland Revenue Department, Land Tax, Value Added Tax, Excise and Licensing Authority we are all going under the Barbados Revenue Authority so therefore (government) thought it prudent not to … add staff at this particular juncture,” she noted. (SC)