President of the Chamber of Industry and Commerce, Mr. David Lake outlined the recommendations on behalf of his trade association, and gave priority to the suggestion that there ought to be a reduction in the rate of Corporation Tax, from 35% to 30%. Lake stated that most of the successful emerging economies have rates of 30% or less, and therefore was more than hinting that the time has finally come for the same to apply in the two island jurisdiction.
The matter of a gradual reduction in the Corporation Tax, is one that has been on the agenda, dating back to the 1990s when the Sir Kennedy Simmonds People’s Action Movement, PAM, administration was in office, and committed to the reductions.
He added that the removal of restrictions on Capital Allowances, implementation of accelerated depreciation and removal of restrictions on losses carried forward are all measures the government can also undertake as new fiscal measures.
It is also the position of the CIC, as shared by Lake, that the removal of restrictions on write-offs for employees earning in excess of EC$60,000 per year would enable companies to attract premium talent at competitive rates.
The CIC President also indicated that since the introduction of VAT, small and medium size enterprises have faced increased cash flow constraints to make the VAT payments and returns within 15 days while they still have to find cash to pay employees and keep shelves stocked.
“We are therefore recommending that Government lengthens the time period to make VAT returns to 30 days. Small and medium sized businesses which have to give the normal 30 days credit have to pay the VAT 15 days before it is received from the consumer,” Lake proposed.
He added that consumers too are in dire need of relief from the VAT. He explained that they are aware of government’s revenue concerns and as such the CIC suggests that there be an increase in a select range of essential consumer goods for zero-VAT rating. He said these items should be selected based on appropriate research. This can achieve a positive message without significantly compromising government treasury receipts, suggested Lake.
The Chamber is also very concerned about the number of persons who still manage to escape the tax net.
Lake said that the Chamber trusts and expects that Government will do all in its power to ensure that there is strict compliance and enforcement of the tax laws and regulations across all sectors of the economy.