Antigua: PM Slams Businesses For "Shameful" Tax History

Robert Lee, Tax-news.com, London

18 October 2000

Following the forced withdrawal of plans for increased taxes, Antigua's Prime Minister Lester Bird last week launched a stinging attack on a significant number of businesses on the island, pointing to the "shameful record of tax payments by many incorporated businesses" and advising them to "pay their dues."

In a letter to Clarvis Joseph, president of the Chamber of Commerce, the prime minister said that more than 2,000 businesses currently in Antigua are evading the payment of lawful taxes and have been doing so for some time. Mr Bird stated: 'It is also clear that a mechanism has to be put in place to stop this abuse, which places a greater burden of indirect taxation on the less well-off in the society. These 2,000 businesses benefit enormously from the services and infrastructure provided by the state. It is only fair that they should pay their due.'

The prime minister's comments about tax-evading companies came following another letter received from a private-sector grouping, whose members expressed "absolute disapproval of government’s proposal to reinstate, albeit in a somewhat amended form, a 2 per cent tax on the gross of unincorporated businesses and professionals." According to Mr Bird, however, "It is the majority of people of this country who should be vexed and agitated at the flagrant refusal of some members of the business community to pay their fair share of the costs of the infrastructure and services they enjoy."

Mr Bird said that in 1999 only $1.5m in taxes was paid by more than 2,000 companies: 'These businesses contributed less than 0.5% percent of revenue that the state earned ($300m) to provide essential services and infrastructure.' Pointing to government spending of more than $80m on roads, police services, health and education during that same period, he said: 'The taxes of $1.5m paid by the 2,000 businesses was less than 2 per cent of these costs, which were of great benefit to them.'

Mr Bird continued: 'An analysis done of eight businesses shows that, by their own figures, their turnover in one year was $96m. Despite this, many of these eight businesses paid no taxes, claiming that they made no profit. ... Nonetheless, they all deducted as expenses from their bottom line, rent and salaries, both of which are tax free." Of the claim by these eight businesses that they made a loss of $5.5m, Mr Bird said: 'This clearly indicates that the operators of these businesses are either bad businessmen and their businesses ought to be in bankruptcy, or accounts have not been fairly and accurately presented.'

Mr Bird concluded that many sole traders and partnerships had indicated that the 2 per cent tax on gross income would cost them less than the 25 per cent business tax, which has been repealed.

.

Recommended

Write a comment