Tax compliance can lead to Tax write off’
May 17, 2023 -This topic can be or is very controversial but it has to be addressed says Member of Parliament George Pantophlet. He believes that Tax compliance can lead to Tax write off’s. This statement might sound like an oxymoron but the member says there is great possibility in this aspect. He also feels that the manner in which taxes are collected should be looked into.
Article 6 of the 1970 collection ordinance which was amended February 16, 1995 and established in June 2 1995 reads as follows freely translated The Receiver’s office is authorized to prosepone payment of taxes and to make easier payment arrangements upon request of the taxpayer in the event there is irrefutable proof that because of an extraordinary situation out of his control he cannot comply with the prescribed payment regulations/ conditions.
I think an change should be made stating instead of authorize, must. Especially when it comes to relieving the pressure on the most vulnerable being the senior citizens. Tax compliance has been a challenge for decades now, this is based on reports that have been made over the years. It is no secret that the Inspectorate of Taxes does not have sufficient staff nor equipment to keep up with the workload.
The receiver’s office also finds itself in the same situation. Amounts budgeted by governments to upgrade these departments were considered to high by the Committee For Financial Supervision. Interestingly they are the same ones who are complaining about tax compliance. What is a pity is that this deficiency is being used by businesses and persons not to file or pay their taxes. At the moment the present tax compliance continues to be extremely low.
Some or too many neglect their civic responsibility towards society by not paying their taxes. On other hand he has heard the cry of the seniors who are the low hanging fruits when it comes to tax collection. He is sure that businesses and persons are also affected by this. He had a discussion with a Member of Parliament from Curacao whose parents have a business.
They were faithfully paying their taxes. The Minister of Finance of Curacao decided to grant Tax write offs on taxes owed prior to 2017. His parents are extremely happy and are enjoying a real breath of fresh air. Excluded from this write offs according to the Minister of Finance of Curacao were the millionaires. For me it was interesting to hear this because millionaires should not owe taxes in the first place but that is another discussion.
He is quite aware of the fact that government earns its revenues through taxes and they cannot carelessly write off taxes. But he is convinced that taxes owed prior to 2017 should be written off. There is something called bad debts or uncollectible receivables. Questions he would ask would be how much is owed to government by organizations and persons on taxes prior to 2017, another question would be how much is being collected from these persons and or Organizations.
Tax collection is a condition sin qua non, however one has to be careful not to push people/businesses into poverty. Because they can become a burden to Government as it relates to social responsibilities. Some of the complaints I continue to hear are from senior citizens/pensioners who are now feeling the brunt of it. To make tax write off’s complete, the receiver’s office should not be allowed to take any revenues belonging to the businesses or persons and apply it to back taxes prior to 2017.
Discussions should still be held to ensure if this option is still open, the financial situation of the person or business is taken into consideration. I am quite sure that there are businesses and persons who would feel that it is not fair because their taxes are up to date. But this should not be a deterrent. The case is to ensure that the files are up to date and kept current. Tax compliance is the key that will lead to Tax write offs. Legislation to do so was started some years ago but never finalized. It is time again to make it a matter of urgency. Doing nothing is not an option.