Govt admits work left on VAT refunds

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The government does not have the VAT refund process “down pat like we should”, a top official has admitted, although “some headway” was being made.

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Marlon Johnson

Marlon Johnson, pictured, the Ministry of Finance’s financial secretary, told Tribune Business that itself and its agencies were developing “internal targets” and key performance indicators (KPIs) in a bid to eliminate the delays incurred by businesses in obtaining due credits/refunds.

Acknowledging the “tremendous strain” imposed on companies and their cash flow when large refund sums did not materialise, Mr Johnson said the Ministry of Finance was determined to “stop the fire fighting” on this issue.

“We have had issues,” he conceded. “We do have issues arise from time to time. I can say that over the last two to three months we have been working to ensure we streamline the process for VAT refunds, set some internal targets and risk profiling, to allow us to do a better job.

“This is definitely in our work plan, and we’re beginning to see improvements. We’re still not satisfied that we have the process down pat as much as we should. There are sometimes delays in the refunds, and we are working through those and want to set some timelines and key performance indicators.

“We’ll use the rest of this quarter to tidy up. The Department of Inland Revenue team is focused on Business Licences, but as we continue the reform effort down there we will certainly have KPIs we can stand behind,” Mr Johnson continued.

“Bit by bit we are improving what we do and how we do it, improving the responsiveness. We are making some headway, but there is still some to go. Our goal is to make life easier for businesses. We appreciate that when they’re out of cash tremendous strain is put on business.

“We try to expedite things where we can. We try to avoid addressing these things as a one-off. It’s more important to improve this process so it doesn’t become an issue and we can stop the fire-fighting, with persons also understanding the refund process. We don’t want to put pressure on businesses and disadvantage them.”

Mr Johnson’s comments came after Sir Franklyn Wilson, the Arawak Homes and Sunshine Holdings chairman, recently voiced fears about renewed “tardiness” relating to VAT refunds generally, warning that the issue “could shake” still-fragile business and investor confidence.

“In the last two business days I attended two board meetings and, in both instances, the chief executive was making the point that the company’s cash flow was being adversely affected by the inability to get VAT refund payments on a timely basis,” he told this newspaper. “Every company operates on the basis that VAT receivables from the Government are as near to cash as you can get.

“If that turns out not to be the reality, it could shake a lot of commerce in the country. I make these comments in a public way because I believe, in the interests of the economy more broadly, the authorities provide some evidence and assurance that any hiccups are being addressed and refunds will happen as the private sector has been led to believe they will.

“The implications are significant. My genuine interest is that the governance of the country takes place in a way that fosters national development. I bring this to the authorities because they may not be aware of it. Hopefully, they should be aware of it and prevent it from becoming a problem.”