Tax amnesty seen as not fair

I share the same sentiments with the ‘Struggling SME’ writer in Monday’s letters page concerning tax amnesty and companies.
The crux of the writer’s argument is that there is no point in imposing an amnesty and subsequently penalising companies that are already tax compliant and have over the years been paying taxes.
Just because they are now behind in remitting their taxes does not warrant imposing such an ill-conceived deadline and penalties.
The government through Inland Revenue Commission must understand that in these tough economic times, businesses are hit hard.
Many SMEs are getting by on a hand-to-mouth basis.
This situation has rendered tax remittances extremely difficult.
To penalise these struggling tax-compliant businesses is akin to squeezing the life out of the goose that lays the golden egg.
Once these business are suffocated out of operation, it is the government that will become the biggest loser as unemployment will rise and tax revenue will drop.
The writer rightly points out that the government, through IRC, should be focussing on those businesses that are not tax registered.
The IRC must work with them to make them tax compliant and get them to start remitting taxes.
In these difficult economic times, handling the tax amnesty and penalties is a delicate balancing act for the government.
Whatever actions it is taking to raise tax revenues, especially on struggling businesses and SMEs, must be a win-win situation for both parties.
It would be highly irresponsible and immoral for the government to cause existing tax-compliant businesses to go out of operation simply because they cannot cope with the penalties that are being imposed on them.
Any penalty that is imposed on businesses must be within their ability to cope with during these difficult times.
The government is directly responsible for the current economic mess that the country is in, so it is not right to impose amnesties and unjustified penalties on businesses and SMEs who have all along complied with the laws of this land and have records of paying their taxes.
Imposing a one-off blanket tax amnesty and penalties is not the way to go.
Instead of focusing on penalties, the government should seriously consider introducing incentives which will encourage timely tax remittance by businesses and, especially, SMEs.

David Rovou