Friday, August 18, 2017

BCCI Demands Investigation into Alleged GST Scam

Friday, April 14, 2017, 16:55
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2Tuesday, 11 April 2017   It is time to break the corruption chain and take our country back from those who would steal it, or sell it out for pennies! – BCCI Release, April 11, 2017   Is the Department of General Sales Tax perpetuating a massive scam to unfairly and illegally milk extra money from their registered agents? Is that another way in which the Government of Belize is trying to source much-needed revenue from already overburdened taxpayers?   That is what the Belize Chamber of Commerce wants to find out. Today that body issued a stinging release directed at government, in which it “calls on the Government to immediately launch a thorough, complete and transparent investigation into the allegations made by the GST Officer, particularly due to the mandatory and onerous nature of penalties imposed by the Court for failure to pay GST assessments.”   The release comes after a leaked letter from a concerned senior GST officer to the Solicitor General raised serious questions about seemingly arbitrary methods of assessing registered agents for GST. The four-page letter dated December 28, 2016 suggests intervention at the highest levels of the department to assess businesses at much higher collection figures than those arrived at by the auditor, in some cases more than double the auditor’s amount.   However, despite protestations, the auditor in question says he was called into meetings by his superiors and shut down so he “reluctantly did what I was told knowing that it was wrong.” He added that when he checked with a senior Certified Public Accountant about the method, that accountant only laughed because the method being imposed “used Zero Rated Income (Sales) to find Standard Rated Income (Sales) in a manner that I have not seen in all my years doing Accounting work” and certainly not contained “in any Accounting or Auditing text in the world.”   His higher ups furthermore instructed him not to show the agents the method used to assess them and because none had an accountant on staff, they did not appeal.   He wrote, “since then this seems to be the general modus operandi of our Department…reports are sent from the Auditors and they are changed at some level of Management, based on feelings.” The auditors are then required to “own up” to the changes. That raised a problem for the senior GST officer because while some of the assessments went un-appealed, others were questioned and he was uncomfortable defending assessments that were not his own.   In one case, the officer assessed a business for $73,000 and when his report came back from up top, it was with the instruction for the collection to be raised to $100,000. In another case, his assessment was $30,000 and that was increased to $71,000. What’s more, he was told to apply this method to other taxpayers but when he pointed out that in one case, their method would have them owing the taxpayer over $41,000 they backtracked and ordered that the method be used only on a case by case basis. So, when the taxpayer owed the Government, the method could be used but otherwise, it should be set aside.   The officer expressed discomfort with another practice of having the auditors use three methods of auditing for management and then choose the one that yielded the highest collection figure. The officer is therefore questioning whether the management at the Department should influence the outcome/final report and assessment of an auditor. That is the purpose of the letter to the Solicitor General: for him to determine if any law provides for this and also to warn that if the matters end up in Court, his office would be called on to represent the Government of Belize.   The GST officer suggests that there should be a standard and reasonable method of assessment for each business type that should be adhered to regardless of the outcome. He further writes, “if the Commissioner is directly involved in assessing taxpayers, her decision at the time of the review under the above section [Section 42 of the GST ACT] will not be impartial and could be further grounds for appeal.”   In its release, the BCCI goes on to state that “the Corruption and subjective application of rules are unacceptable in any society if it is to function for the benefit of its citizens, and where found such abuse of office must be dealt with energetically, visibly and to the fullest extent possible. No Belizean is above the law, not police officers, our ministers, or management at the Department of GST.”   GST Commissioner Betty Ann Jones was unavailable to answer the media’s questions and two assistant commissioners were in meetings when we called for comment. Based on figures provided in the 2017/2018 budget, 27.5 million dollars of GST has been outstanding for more than two years but reports are that a similar amount is owed by GOB in refunds to taxpayers which have been unpaid.
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