New payment system

By SHIRLEY MAULUDU
THE Internal Revenue Commission (IRC) will start issuing notices to all Government departments and State-owned entities (SOEs) to remit all their goods and services tax (GST) to the IRC.
Commissioner general Sam Koim told a media conference yesterday that the notice would advise Government agencies to withhold the GST to be paid to their contractors and service providers and remit it to the IRC.
He said taxes collected by the IRC formed more than 70 per cent of Government revenue.
Koim said contractors and service providers to Government and SOEs were beneficiaries of this tax money and it is expected that these contractors and service providers are compliant with their tax obligation.
“We are going to give notices to Government entities and State-owned enterprises, to start with,” he said.
“Those notices will be under section 65 A of the Goods and Services Tax Act, which will be a notice that will be given to those entities to withhold the GST component of the invoices that they receive when they are making the payments, and they can pay the GST component directly to us on account of the Government contractors.
“The 10 per cent component that is normally charged to the Government entities and State-owned entities, we would like to collect that money directly so the taxpayers can then come to us with their returns for all the suppliers’ lists, tell us that this is how much we have spent on GST and this is how much we are supposed to collect but you’ve collected the Government component of GST.
“We will do reconciliations for them.
“We allow the taxpayers to do the reconciliation but sometimes they distort the figures and tell us something else.
“This is also a way to combat non-compliant behaviour.”