Fi­nance Min­is­ter Colm Im­bert said yes­ter­day the de­ci­sion to have a tax amnesty un­til the end of the year is re­lat­ed to the eco­nom­ic fall­out caused by the COVID-19 pan­dem­ic.

In the sec­ond read­ing of the Fi­nance Bill in the House of Rep­re­sen­ta­tives, Im­bert not­ed that as a re­sult of re­stric­tions on var­i­ous sec­tors dur­ing the COVID-19 pan­dem­ic, many busi­ness­es had to pri­ori­tise what they spent on. Small busi­ness­es, in par­tic­u­lar, may have avoid­ed pay­ing tax­es in a bid to stay open, hav­ing ex­pe­ri­enced sig­nif­i­cant cash flow chal­lenges, he ex­plained.

"This is in­flu­enced by the re­cov­ery from COVID-19, dur­ing which com­pa­nies not on­ly fell be­hind in terms of pay­ment of their tax­es, but al­so in their pay­ment of Na­tion­al In­sur­ance Scheme com­mit­ments. The Na­tion­al In­sur­ance Board is quite ag­gres­sive in terms of try­ing to re­cov­er Na­tion­al In­sur­ance pay­ments and quite ag­gres­sive in terms of try­ing to re­cov­er penal­ties and in­ter­est even from state en­ti­ties,' said Im­bert, who not­ed that the NIB had re­ceived $124 mil­lion from the last amnesty.

How­ev­er in his con­tri­bu­tion to the de­bate, Op­po­si­tion MP Dave Tan­coo ques­tioned if hav­ing the amnesty was mere­ly a pun­ish­ment to com­pa­nies that had paid their tax­es, while giv­ing oth­ers an av­enue to skirt the law.

How­ev­er the Min­is­ter clar­i­fied that the amnesty was not a tool for tax eva­sion, but rather an op­tion to avoid in­cur­ring penal­ties for non or late pay­ment of tax­es.

"I al­so want to make it clear that the amnesty does not in any way, cre­ate a sit­u­a­tion where the tax li­a­bil­i­ty is waivered, so the tax­es are still owed but what is be­ing waived is the penal­ties and in­ter­est on the over­due tax­es," said Im­bert.

"As in all pre­vi­ous tax amnesties, if the in­di­vid­ual or the cor­po­ra­tion fails to take ad­van­tage of the amnesty pe­ri­od, fails to make the tax pay­ments that are due, owed and payable, the as­so­ci­at­ed in­ter­est and penal­ties are re­stored up­on the ex­piry of the amnesty pe­ri­od."

Im­bert al­so point­ed out that pre­vi­ous amnesties had re­couped sig­nif­i­cant amounts of mon­ey, with the 2011 amnesty yield­ing $1.6 bil­lion, 2016 re­cov­er­ing $776 mil­lion, 2019 gar­ner­ing $2.3 bil­lion, 2021 $1.1 bil­lion and last year's amnesty see­ing a re­turn of $1.5 bil­lion.

He al­so not­ed that it was cru­cial for busi­ness­es to clear their tax­es, as fail­ing to clear tax oblig­a­tions would make busi­ness­es il­leg­i­ble for gov­ern­ment ten­ders un­der the Pro­cure­ment act.

The tax amnesty and the Na­tion­al In­sur­ance amnesty will end on De­cem­ber 31, 2024