Controversy over Antigua's Income Tax 2000 Amendments

Mandy Robinson, Tax-news.com, London

08 August 2000

Recent amendments made to Antigua's Income Tax Act 2000 have attracted criticism from Antigua's private sector. At a recent meeting attended by representatives from the government and the private sector, local businesses called in to question a proposed 25 per cent limit on wage deductions and miscellaneous payments to family relations of business proprietors and directors.

During the meeting, the private sector members described the amendment as unacceptable and argued that it was wrong for the Commissioner of Inland Revenue, Donald Edwards, to have sole discretion in dictating the income of local business leaders.

Further criticisms of the Income Tax Act 2000 reforms also came to the fore during the meeting. The private sector members voiced concern about paying the 2 per cent tax on gross company income, which the government wants to treat as advance tax towards corporate tax liabilities. This would be collected each month. Representatives of local business said they considered this to be a tax on capital expenditure and this was also unacceptable.

Chamber of Commerce President Clarvis Joseph claims that the Income Tax amendments - in particular the imposition of more taxes upon local businesses when they had previously been given tax concessions - can be thought of as "immoral" and will result in a lack of private sector confidence in the government. He said: 'we are prepared to consider a tax applied after expenses, including, in particular, the cost of goods ... we are also quite firm in our view that in the case of overpayment, mechanisms should be put in place to have any overpayment result in an automatic and immediate refund.'

Other complaints levelled at the government by local businesses include the failure of the government to procure around three-quarters of taxes due - a restructuring of the public sector has been called upon in order to address this major discrepancy. Furthermore, local businesses have demanded better communications between them and the government, which they feel would help to deter the monopolisation of local authority contracts.

A major amendment to the Income Tax Act 2000 is the implementation of the business register. This will make it compulsory for all businesses to register with Antigua's Inland Revenue department. In a press release the Inland Revenue stated: 'whether you are a manufacturer, hotelier, wholesaler, professional, retailer, commission agent, farmer, vendor, landlord, tradesman or involved in any other economic activity, you are required to register.' Failure to do so will result in an initial U$2,000 fine, and an additional fine of U$200 for every day afterwards until the business is registered.

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