AS part of the effort to boost its tax revenue intake, the Government has transferred responsibility for collection of the assets tax to the Inland Revenue Department (IRD).
The move, which became effective on January 2, has been designed to make it easier for taxpayers, but more importantly to capture those who have not been paying the fee to the Registrar of Companies over the years.
According to a release from the Tax Administration Services Department, declaration of assets and payments should now be made at any of the 28 collectorates islandwide, instead of the Registrar of Companies.
Provision for the transfer of responsibility for collection of the fees was made in The Assets Tax (Specified Bodies) Act of 2002 that was recently passed in Parliament, the release said. It provides for the taxation of assets of companies and other specified institutions. Under the new provisions, the Commissioner in charge of Taxpayer Audit and Assessment has been authorised to make assessments with respect to the tax.
Companies and societies registered under the Companies Act and the Industrial and Provident Societies Act respectively are required to make annual declarations of the value of their assets and pay the prescribed fee on or before September 1 each year. They are required to use the prescribed Declaration of Assets Form (AT01).
The annual fee ranges between a low of $100 and a maximum of $10,000, while the annual interest chargeable will be at 15 per cent per annum or between $15 and $1,500, according to a schedule released by the Tax Administration Services Department.
A company, society or other specified body whose aggregate assets value does not exceed $5,000 will pay $100 annually; those valued at more than $5,000 and up to $15,000 will pay $200 annually; those valued at more than $15,000 and up to $50,000 will pay $300 annually; those whose value exceed $50,000 and up to $100,000 will pay $500 annually; those with a value of more than $100,000 and up to $500,000 will pay $1,000; those with assets valued at more than $500,000 and up to $1 million will pay $1,400; those having assets valued at more than $1 million and to $5 million will be taxed $5,000 annually; those with assets that exceed $5 million but does not exceed $10 million will pay $7,000, while those with assets valued at more than $10 million will pay $10,000 annually.
The asset tax was initially introduced on commercial banks in 1992 by then Finance Minister Hugh Small, but it created controversy as the institutions felt they were being unfairly targeted.
Mr. Small was also quoted as saying then that the tax was a one-off measure to help meet critical financial needs of the government, a need he became aware of when he took over the Finance Ministry earlier that year.
When Mr. Small proposed the imposition of the tax, the banks opposed it, arguing that they were being singled out for special taxation, and that an asset tax was unfair in both principle and application.
The measure was later extended to include all entities captured by the Registrar of Companies.
- M.T.
