In protest against Antigua and Barbuda's recent Income Tax Amendment Act 2000, the Chamber of Commerce last week presented to the government a petition of non-compliance with the legislation. The petition, which contains 500 signatures, reflects the widespread discontent that is felt throughout the island's business community with their treatment at the hands of the government.
According to the Chamber of Commerce President, Clarvis Joseph, the Tax Amendment Act could put some firms out of business and it would be more beneficial for the private sector and the government if tax changes were aimed at improving the government's infrastructure instead of penalising local businesses for its own misdemeanours. He said: 'we believe that in light of the government's failure to collect some 75 per cent of the taxes due under prior legislation, the focus should be on the improvement of tax-collection measures, rather than the implementation of new tax legislation.'
The petition raised a number of local business concerns but the major issues addressed were the 25 per cent limit on wage deductions and miscellaneous payments to family relations of business proprietors and directors, which were branded "discriminatory" and "illogical", and the 2 per cent tax on gross company income, which the government wants to treat as an advance tax towards corporate tax liabilities. Mr Joseph said that local businesses considered this to be an unacceptable tax on capital expenditure, and he was adamant that taxes should be levied on profits and not on gross revenue.
Further criticisms in the petition were directed towards speeches made by members of the government who claimed that Antiguans are paying less taxes now than they did before personal income tax was abolished. The Chamber of Commerce counteracted with a statement reminding the government of the business/corporation tax, (commercial) property tax, overseas phone call tax, education levy, travel airline ticket tax, and medical benefit tax - all of which have recently been raised by the Government.
The petition was delivered to Deputy Prime Minister John St. Luce, in the absence of Prime Minister Lester Bird who currently on an OECD-denouncing mission. The petition, which will be presented to the Prime Minister on his return, is not likely to be a surprise for the government given the controversy surrounding the Income Tax Amendment Act. However, it will be interesting to observe the government's reaction. Clearly, the private sector has lost confidence in the administration and it is a possibility that many local businesses feel strongly enough to risk adopting a 'closed door' policy and refuse to open for business, and other firms say they simply would be unable to afford to run their businesses. Clarvis Joseph claims no action will be decided upon by the Chamber of Commerce, which is observing a "wait and see" position, until the Government has responded to the petition. So, whether the government will maintain its current stance and persist in pushing the amendments through and ride the storm, or negotiate more amenable reforms with the private sector in the attempt to restore confidence, remains to be seen.
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