In the reading of our country’s national budget 2022/2023, the Minister of Finance advised of a Tax Amnesty. The Amnesty, which commenced on November 14th, 2022 and ends on March 17th, 2023, allows businesses to pay all outstanding obligations without the added cost of penalties and interest.
If you miss the amnesty deadline, the amount owed to the Inland Revenue Division (IRD) will not only be the principal amount but also any penalty and interest that has been accumulating.
Anisha Mohammed, Senior Associate – Accounting Outsourcing Services at Aegis Business Solutions, notes that while businesses of all sizes should take advantage of this opportunity, small businesses are more likely to struggle with the burden of outstanding taxes and the associated penalties and interest.
“Small business owners often focus on core activities (but) tax compliance is also very important for the survival of your business.” One benefit of taking part in this amnesty, Mohammed explained, is that it “allows you to update your tax records without having to spend additional money on penalties and interest.”
Another benefit is that filing your taxes in an accurate and timely manner requires proper bookkeeping. Doing so provides companies with accurate data on income and expenditure, which allows for more informed business decisions.
A third amnesty benefit is that proper records mean greater likelihood of access to loans from financial institutions, which usually require records for the past three years. Also, when submitting tenders for projects, a TAX and VAT Clearance Certificate is required. This document tells the tenderee that you have all your ‘I’s dotted and ‘T’s crossed with respect to your tax compliance and when presented in your tender package, works in your favour.
Mohammed added that whether records are digital or physical, it’s important to keep them updated. “Good records allow Aegis to file your tax computations faster. It’s also the law to keep seven years of accounting records and six years of tax records.”
Good record keeping also reduces the cost, when hiring an accountant, because time isn’t wasted sorting out paperwork.
How can you avoid penalty and interest payments from taxes?
Pay your taxes on time. “For example,” Mohammed said, “Corporation Tax, Business Levy and Green Fund Levy taxes are all due quarterly. Proper records of when taxes are due helps you to pay your taxes in a timely manner, thereby avoiding any sort of penalty or interest.”
There are two ways to submit your taxes: via the IRD’s e-Tax online portal (https://etax.ird.gov.tt) or its non-logged-in version. Mohammed noted that the logged in version saves taxpayers time while providing access to their tax history. “You can complete your tax return online and submit it without having to sign and drop off a tax declaration form; your TTconnect password is your signature.”
In contrast, the non-logged-in service “only allows companies to submit applicable returns.” They must then print out their tax declaration form, sign and stamp them before they must be drop off at an IRD office before February 17.
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