St Kitts and Nevis (WINN): The Inland Revenue Department would prefer to collect taxes by means of compliance by taxpayers, however, where that fails, the law provides a number of options for the Department collect the funds owed, even if it means taking it directly from a person’s bank account.
Junior Rawlins is a Senior Tax Inspector in the Debt Management and Filing Compliance Department. Mr. Rawlins told WINN FM that once a case was assigned to a collector, they would review the file to ensure that there were no errors. Once the tax collector is able to confirm that the amount owed was correct, a number of soft approaches would first be taken to encourage the taxpayer to clear their debt.
“Once the tax collector has confirmed that debt or even if you have an outstanding debt, because remember it’s for both filing and for taxes that are outstanding, once they deem that it’s accurate, then the responsibility now is to engage the taxpayer. Either call that taxpayer, have that conversation, encourage them to file, encourage them to pay and if that kinda fails then you have the option of sending a letter which is the first demand letter, which would give them thirty days. Thereafter we have a second letter if the person doesn’t respond, then you give them fourteen days to respond and then if that also fails then we write a third letter which would include, if you don’t respond then we would use legal enforcement, that would include publishing of names, we have seizure and sale, we have leans, we have garnishments.”
Once the Inland Revenue Department exhausted all such approaches, it would then proceed to explore a number of legal options. One such option is to take the funds directly from a person’s account.
“…It’s like saying if I identify there’s money in the bank and you are being non-compliant, I can say …you have excess funds in the bank just sitting there and you owe the government, we could actually write an intent, and that intent to the bank would seize that account and simultaneously we would send a letter to the bank and send a letter to the taxpayer and then if the taxpayer doesn’t comply then we could go ahead and send an execution, where the bank now would responsible for directing that money to the Inland Revenue Department.”
Rawlins told WINN FM that, while that means of collection was not done often, it had been done successfully in the past.
“…We went to all the financial institutions in St Kitts and Nevis and we had a conversation, we went through the tax laws and everything, we even went as far as amending the Confidentiality Act so we could actually include the Comptroller so they have no excuse not to comply with us. Most of the time we’ll actually request the information, so I wouldn’t say it’s a fishing expedition, but then sometimes in discussion with the taxpayers we ask them about their bank accounts, how are they living, because most of the time they say they can’t pay but most of the time if they say they can’t pay that should be supported with an ability to pay or borrow. Most say they can’t pay so where is the facts, give me the information, so we’ll have that discussion. Most of the time people don’t want to disclose that information, so we’ll just write to the bank, request the information…”
However, when a person receives a letter indicating that the Department will pursue legal action, there was still room for the taxpayer to go to the Department to clear their debt before the action was taken. The Inland Revenue Department can also clear someone’s debt by contacting a person’s employer to have monies deducted from that person’s salary and made to the Inland Revenue Department.
The Tax Administration and Procedures Act which was revised in 2009 states, in section 33 (1), that the Comptroller may issue a notice to any person (including an employer, bank or other financial institution) requiring that person to make direct payment to the Comptroller of any amount that person owes to the taxpayer, or holds on account of the taxpayer on the date of service of the notice of execution.