Tax on allowances and benefits begin March 1

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St. John’s Antigua- The Antigua & Barbuda Trade Union Congress (TUC) is continuing its opposition to government’s decision to proceed with the planned taxation of employee benefits and allowances, saying it will now be reviewing its approach to the matter.

The Revenue Reform team yesterday announced that the measure – a provision within the Personal Income Act of 2005 – will be deferred until March 1. It was originally set for January 31.

Project Manager Revenue Reform Administration Everett Christian told The Daily OBSERVER yesterday that the decision was made to allow employers to put the proper administrative arrangements in place to facilitate the changes, and will provide more time to educate taxpayers on the move.

“We are still engaged in consultations with the various stakeholders and that includes having all of the stakeholders agree. We had telephone conversations with some just to obtain clarifications on some of the issues that they raised during our earlier consultation, we want to be certain that we are all on the same page,” Christian said.

The project manager said once the process is complete the final draft of the 54 page document will be released detailing what will be taxed.

President of the TUC Kim Burdon has however deemed this move “unacceptable.”

“In essence, it is going to go through whether we agree or disagree; whether it makes sense or doesn’t make sense. That is unacceptable. Basically, the government has said we are going to go through like it or lump it,” Burdon said.

The president said the TUC and its nine affiliates who have incomplete negotiations with the government on this matter will now have to review its position and go forward.

“Certainly to suggest that you have a date of implementation means that all negotiations have closed, all discussions have come to an end. We are really just tying up our loose ends to make sure that it works at the appointed time,” Burdon said.

He added that the TUC will write to Prime Minister Baldwin Spencer to seek resolution on the matter.

The TUC had warned of wide industrial unrest if the government proceed with the impending measure.

Meanwhile, The Inland Revenue Department (IRD) has re-iterated that the decision to fully implement the Act will not affect the majority of low and middle income earners, as safeguards will be out in place to limit any potential impact on those sectors

The revenue reform boss also indicated that the government is hoping to rake in close to $90 million in extra revenue through this proposed measure.

“The $90 million will not be solely as a result of the taxing of benefits and allowances. It also includes revenue from bringing a lot of persons into the tax net, persons who are presently contributing. So, we previously focused on the largest 226 tax payers, we are now broadening that net to include over 1100 businesses and individuals, professionals self-employed persons to try and improve the compliance in that area,” Christian said.

“That $90 million that we are looking at, increase in PIT covers both improved compliance as well as closing of the loopholes,” he concluded.

 

 

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