ST. GEORGE’S, Grenada – The Grenada government says it is owed more than EC$750 million (One EC dollar=US$0.37 cents) in outstanding taxes and penalties and that a tax amnesty offered this year is aimed at significantly reducing the outstanding arrears.
Grenada's House of Parliament building. (Photo courtesy of UNOPS)“In the budget speech we quoted a figure of in excess of EC$600 million …the actual figure from the Inland Revenue Department is closer to EC$777 million,” Prime Minister Dickon Mitchell told legislators as Parliament debated the Tax Administration Amendment Bill on Tuesday.
The tax amnesty went into effect January 1, without the necessary amendments made to the 2016 Tax Administration Act that defined tax as ” a compulsory payment to government imposed under a law which this Act applies regardless of whether that payment is designated as a tax, fee, duty, levy or otherwise, and, unless the context otherwise requires, includes interest, late fee, or penalty in relation to a tax”.
However, the government did not present a bill to the Parliament seeking to adjust and or amend the requirement in the Tax Administration Act to coincide with the January 1 implementation date.
Mitchell, who recently relieved himself of the position of Finance Minister, said that the government recognized the error and had moved to correct the situation.
“So, we recognize that, and based on our stated policy of granting amnesty we need to make sure we correct the anomaly by getting the law amended,” he said, telling Parliament he had received many requests from people with outstanding taxes to relieve them of the penalties.
Leader of Government Business, Phillip Telesford, said that the new legislation seeks to address the “recoverability” of the outstanding taxes, the arrears to these taxes, and to improve compliance.
“The strategy of the government is to provide a waiver, provide an opportunity where businesses and individuals who are owing the government tax can pay those taxes without having to service fees and penalties associated with the arrears on those taxes,” he said.
He said that an amendment to the principal act is required to give effect to this tax amnesty “as presently, the Minister for Finance has no expressed authority under the principal act to waive interest and penalties on outstanding tax arrears”.
But opposition legislators warned about the potential to abuse the amnesty clause in the Bill in the future.
“Some who are supporters of the party may feel they have an inalienable right to get it because they help bring the government into office,” said Opposition Leader Dr. Keith Mitchell.
