While trade unions and other affected parties are calling for further consultations on the proposed taxation of benefits and allowances, the Antigua & Barbuda Business Alliance wants the tax measure to be scrapped and the model restructured.
Government is preparing to enforce a provision within the Personal Income Tax Act of 2005 to help close loopholes often exploited by business owners. , Allowances and benefits to be taxed under the policy include transportation to and from work, telephone allowances, retirement allowances, pension plans and thrift fund contributions, tuition fees, scholarships and bursaries, legal fees, accommodations, child care expenses, commission, loan forgiveness and write-offs, among others.
However, president of the Antigua & Barbuda Business Alliance Patrick Ryan said the policy – outlined in a 52-page draft document, is not a good module for small countries such as Antigua & Barbuda, which does not have that many well established businesses.
He suggested government seek to make its money from licences, which he indicated could easily ensure that the greatest percentage of taxpayers carry the burden.
“I feel it would be more fair, more equitable and everybody would be paying something,” Ryan said. “I also feel it would be a big attraction for foreign investment. I think this personal income tax has taken the wind out of the sail for a lot of investors that might have looked here.”
He added, “We don’t have anybody on the Eastern Caribbean Stock Exchange here in Antigua, no large conglomerate here. We operate as a smaller environment and partnerships here, which are very difficult for Inland Revenue to review and have oversight on.”
According to Ryan, taking money out of circulation at this point is going to hurt the economy this year, rather than help the situation. He called on government to level the playing field and target the high-end businesses, while also focusing on its own inefficiencies
Ryan said there is an urgent need for public service reform to avoid unnecessary wastage.
“The public service is like a train where all the wheels are welded together or rusted up,” he said. “I don’t think anybody could run the public sector in its present form or fashion and it is just dysfunctional and it is continuous wastage.”
The businessman intimated that unless the problems and challenges are addressed, money would remain a major issue for the government.
“I think government has to answer and be accountable. The money it has collected, I don’t think it has been doing a good job,” Ryan said. “Government has to be more efficient with its money, not just go after the private sector and say we want more. It has to show that we are getting something for value and something out of it.”
Ryan also noted that his organisation and the Employers’ Federation hope to engage government in their concerns throughout the year.
(Source http://www.antiguaobserver.com/?p=69869)
