The opposition Friday evening gave the thumbs down to the Income Tax (Amendment) Bill saying that the threshold increase and the granting of tax waivers to international artistes were not properly thought out. However, the government used its one seat majority to pass the Bill.
Finance Minister Winston Jordan told the House that the Bill is three fold. The first being to increase the income tax threshold from $600,000 to $660,000 per annum. The second to amend Section 13 of the Act to exempt the income earned by artists during festivities certified by the Ministry of Tourism and approved by the Commissioner General and the third to amend the act to provide for taxes paid in excess to be applied by the Commissioner General in reduction of any amounts owing by a taxable person before a refund is given.
He said the increase in the threshold is a step in the right direction. “Any benefit that can be given to our workers is a benefit earned and it is a benefit that we should all applaud …sure we would have loved to have given more but it’s a work in progress and this is just a start,” he said as “yes” emanated from the government side of the House.
He said that as growth in the economy continues and revenue collections increase, all other measures relating to benefits for workers will be under consideration. He said this threshold increase will affect an additional 68,000 workers who will not be subjected to paying income tax.
With regard to the exempting of artistes from paying income tax, he said that when government came into power it met a regime where the minister granted exemptions—VAT, duty among others—in relation to major events. He said that these were granted as a means of encouraging entertainment tourism.
Jordan pointed out though that this arrangement was heavily dependent on the minister. “If it has a dependence on a minister then not everybody would feel comfortable because they don’t know which one would get in… and they don’t know the rules of the game,” he said.
He said that it would be better if this is in the law so that if a promoter wants to bring an artist, how he/she goes about getting the approval is in the law.
A section of the amendment speaks to the festivities being certified by the Minister of Tourism and approved by the Commissioner General.
“If we are gonna grant them then we must enshrine them. There must be some kind of a law that will allow us to give the concession as opposed to leaving it to somebody’s fiat,” he said.
With regard to refunds, he said this is a sore issue with many taxpayers who are unable to collect what they are owed. “This is not a substitute for not giving the taxpayer the refund. However, this allows the commissioner general in law to apply a particular refund to any outstanding tax penalty that a taxpayer may have,” he said adding that it doesn’t have to only be in relation to income tax.
However, Opposition MP Irfaan Ali had much to say about the proposed amendments. Ali, a former minister of tourism, expressed concern as the use of the word “festivities”. He questioned who determines what is a festivity and who is responsible for making that determination.
He also criticized the proposed certification process for these activities and questioned where are the guidelines that need to be followed to ensure the standard certification has been met.
“One of the problems we have with artists coming into the country is when they leave without settling their debt. That is one of the biggest problems,” he said adding that this Bill does not cater for the small man who is supposed to benefit from these events. He questioned whether this was taken into consideration when the amendments were crafted.
Ali asked what is being done to ensure that local artistes would benefit from a similar treatment when they go and ply their trade abroad. “These are things we must be able to address and answer because we are making a law here that will give them [international artists] benefits. When we develop law we have to look not narrowly but we have to look at the law in context with what is happening regionally and globally and to situate the law in that international context and protect our industry, people and our own international environment,” he stressed.
Ali expressed disfavor with the threshold increase stating that government has a moral and ethical responsibility to develop laws in line with its commitment to the people. He said that the amount put on the table by government translates to $55,000 per month.
He made mention of government’s $100,000 threshold promise during the elections campaign season.
“People elect us based on trust and belief in what we offer them during the elections campaign,” he said.
He said that if the Finance Minister was moving away from that promise the least he could have done was “to present a case to justify the reasons why that target cannot be achieved at this time.”
Ali told the House that given the new revenue streams, the current monthly threshold can be higher. “We would like the government to justify to the people of this country why we cannot afford to at least put the level at $75,000,” he said adding that a PPP/C government would have delivered on its promise and commitments to raise it to $100,000.
On the issue of the netting of taxes, he said that the opposition side of the House is in full support of any measure that would reduce the burden of taxpayer; one of which is the efficient and reliable processing of returns and refunds. He said that any measure that would be businessmen getting back their VAT returns in a timely manner, “we are going to support that measure. However, we cannot support the argument that the Commissioner General is now empowered to offset taxes, the net off effect.” As he spoke, there were mutters of “illegal” from an opposition MP.
“I believe we are going down a dangerous road…This is absolute power in the netting off of taxes and this can lead to many challenges,” he stressed.
