By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government’s ability to award contracts to persons and businesses who cannot prove their tax compliance was yesterday slammed as “absolute rubbish” by governance reform campaigners.

Robert Myers, a principal with the non-profit Organisation for Responsible Governance (ORG), argued that the Government “should be embarrassed” that it had included a clause allowing the Minister of Finance to waive the Tax Compliance Certificate (TCC) requirement.

The Financial Administration and Audit (Amendment) Act 2015, passed as part of the Budget process last year, made it a mandatory legal requirement for companies to produce a valid TCC if they wanted to bid on a government contract; be paid for services/goods provided on a contract worth $10,000 or more; or obtain investment incentives.

Yet the very next clause gives the Government the ability to waive this requirement if it is “in the public interest to do so”.

Clause 19I (2) states in full: “Notwithstanding subsection one, the Minister may permit the award of a contract to a person who does not possess a Tax Compliance Certificate where it is in the public interest to do so.”

With ‘public interest’ not defined in the Bill, this clause appears a ‘get out’ that would allow a government to continue awarding contracts to family members, friends and political supporters, even if they are non-compliant with their due tax payments.

However, Simon Wilson, the acting financial secretary, told Tribune Business that Clause 19I (2) was merely designed to enable the Government to award public sector contracts to bidders who had already agreed payment plans to deal with their tax arrears.

“This clause allows the Minister to issue contracts to persons who have entered into payment arrangements for their arrears with the Government, and is included in the provision which is in force, [and] which is posted on the Government’s website,” Mr Wilson said in an e-mailed response.

However, Mr Myers and others said the clause’s vague language could create a scenario where there was one law for some, and another for others.

“There’s a law for all or no law at all,” he told Tribune Business. “The Minister should not have the power to override that. That’s absolutely ridiculous.

“It goes completely against transparent, modern governance. You already have politicians publicly stating that there’s cronyism and nepotism. That clause shouldn’t be in there regardless of whether the public interest is defined.”

Questioning the message that it sent, Mr Myers added: “It absolutely should not happen. It’s an embarrassment that that clause is in there. The Government should be embarrassed that clause exists.”

When asked how Parliament managed to pass that reform into law, K P Turnquest, the FNM’s deputy leader, said yesterday: “The Opposition has its say, the Government has its way.

“We ought not to pass rules that are patently unfair going in, and we know there are issues to come. Why do that?” he added.

“The rule ought to be the rule. You always get into trouble when you make arbitrary decisions.”

Branville McCartney, the Democratic National Alliance’s (DNA) leader, agreed that Clause 19I (2) appeared designed to waive tax compliance requirements for family, friends and supporters of the Government.

“That is certainly for the cronies of the Government to get what they want,” he added.

Tribune Business revealed yesterday that the Government and its agencies are now requiring businesses to submit TCCs to obtain payment for goods and services ALREADY supplied to them.

The Department of Inland Revenue, in a release yesterday, pointed out that this requirement had been law since July 1, 2015.

However, documents obtained by Tribune Business show that the likes of the National Insurance Board (NIB) have only just started enforcing this.

A TCC is valid for six months on a contract worth less than $10,000, but for just one month for those valued higher than this sum.

As a result, all companies with Government and NIB contracts valued at over $10,000 will now be required to obtain a TCC every month.