By ANNELIA NIXON

Tribune Business Reporter

anixon@tribunemedia.net

Paying business licence fee estimates is the equivalent of paying for a product before you get it, according to the Department of Inland Revenue (DIR).

With some businesses expressing their disapproval of the policy that calls for business licence fees to be paid in advance, DIR’s training and communications manager, Beaumont Todd, at the Institute of Chartered Accountants’ (BICA) SMP seminar, yesterday, clarified that a “business licence is actually a product that you’re actually paying to have to continue your business” supporting the idea that you have to pay for it before you can get it.

“So the thing is, most persons, when they go into a business and you have to purchase a product, do you get the product before you purchase it and pay for it, or do you get a product after you pay for it? And see, most persons don’t look at the fact like that for the business licence, because we operate also as a part of the financial ministry, where we collect on the government’s behalf. Your business licence is actually a product that you’re actually paying to have to continue your business. So in order for you to get that, you have to pay for that in advance. And I think a lot of persons doesn’t realise it’s not the fact that we just charge you. You’re actually paying for your business licence in order for you to operate. Anywhere else in the world you go and you look at it, they do the same thing. You pay in advance before you get it. It’s not that you operate the business. So if you go into a store and take their drinks and their different products and you leave, what they call that? It’s a crime.

“It’s a crime. So basically, I think persons don’t realise that is actually what we’re doing. We’re just putting in place where you operate just the way any other business that you go into. Before you get that product, you have to pay for it.”

Aware of the backlash DIR is receiving for the business fee estimates, Mr Todd noted that it is law and the only way they will stop requiring business owners to pay their fees in advance is if the the law is changed.

“Now that is something that Inland Revenue wouldn’t actually be able to make any changes to directly. We operate under law, and basically that’s law. So that would be something that the government itself would have to change, or the lawmakers would have to change in order for us to make any adjustments.”

Mr Todd also noted that those who overpay or overestimate when paying are eligible for a tax credit or a refund. However, he suggested that taking the tax credit is the easier option to avoid longer processing times.

He said: “If they overpay for their business licence, they can actually apply for a tax credit, or they can actually apply for a refund. There’s a process for it. Now, sometimes the process may take long enough that by the time you get it, you might as well just let the credit roll over. But there is a process in place for refund if you do happen to overpay.”

He added: “In order for you to operate a business, you have to have a licence, and you pay for the licence. Now, let me just say, for persons that are basically under the threshold, there is really no fee for the business licence. Up to basically about $100,000, there’s nothing that you actually pay for your licence to renew. As long as you’re under that $100,000 threshold, there’s just a lot of times persons don’t renew in time and sometimes end up getting filing fees. But up to the $100,000 threshold, your business licence is completely free. You just have to file on time to make sure that you avoid any penalty fees.”