Grenada: Government announces tax amnesty for a year
Prime Minister Dickon Mitchell, who is also the Finance Minister, told Parliament that the current stock of tax arrears is in excess of $600 million and “the truth of the matter is some of us have not been paying our fair share to support national development”.
Delivering his maiden national budget of EC$1.3 billion budget, Mitchell said his administration, which came to power following the June 23 general elections “desires to build a sense of national identity and a culture of meeting our obligations to the state”.
He said to prepare for this transition, the government will implement, effective January 2023, a tax amnesty for the next 12 months that will waive 100 per cent of all interest and penalties for all arrears up to December 2021.
“To halt the further accumulation of arrears, all arrears for 2022 onwards will be strictly enforced pursuant to the Tax Administration Act, including the requirement of tax clearance certificates to travel, to access loans from financial institutions, garnishees, et cetera,” Mitchell said, adding that the Inland Revenue Department (IRD) will be allowed to act “without political interference from government contrary to what obtained in the past”.
Mitchell said that in addition to digitisation of the tax system, “we are also mindful that a good tax administration system is one that is equitable, efficient and growth-friendly.
“Therefore, we will take steps to improve the administration and collection of existing taxes and over time and simplify and reduce the number of taxes,” he said, adding that to transition into the new tax system, the IRD will undertake a mass revaluation of properties in 2023.
“The new property values will be implemented in 2024. It is important to note that the revaluation of properties does not necessarily mean higher property taxes, as the Minister can vary current rates to achieve revenue neutrality.
“The revaluation exercise will allow the government to implement a more progressive property tax system, however to improve compliance in this area, the IRD will implement a pilot that will allow public officers to pay their property taxes through monthly deductions.”
Mitchell said that this service will also be extended to private sector firms, adding that the initiative will reduce the burden of having to find all the resources at one point in time when the tax deadline comes around.
