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Tuesday, October 4, 2022
HomeNewsArchivesA GOOD OPPORTUNITY FOR LOCAL BUSINESSES

A GOOD OPPORTUNITY FOR LOCAL BUSINESSES

The Recently enacted Government House initiative to help local businesses come into compliance with the Internal Revenue Bureau (IRB), Property Tax, and Licensing requirements is a rare opportunity. Everyone in business knows the sometimes difficult procedures to start a new business or renew an existing business license. Although established for good reasons, these procedural requirements are time consuming and in some cases a "Catch 22" situation. With the enactment of the Stop Tax Evasion Policy (STEP) program, licensees are required to produce a Tax Clearance Letter before they can be issued a license. This may sound simple, but can be a major obstacle if the IRB has discovered any tax liabilities on the part of the business. These liabilities can pop up in many ways and often times an overburdened IRB or the businesses, have difficulty identifying these outstanding liabilities in a timely fashion. A tax clearance letter, therefore, is the major obstacle to license renewals. As a result, businesses become delinquent in their renewals and are subject to stiff penalties (up to 25 percent of license fee per month after five months of delinquency). Herein lies the opportunity: the amnesty legislation will allow all those delinquent businesses to come forward and pay only the outstanding tax bill, no matter how long on the books, without penalty or interest. The licensee will then come to Licensing with their prized tax letter in hand, be treated courteously, pay their license fee (very reasonable for most businesses), have all penalties waived, and leave our Department a legally licensed Virgin Island business. We have dubbed this "Operation Fresh Start." It will clear our books of the many delinquencies (25-35 percent of local businesses), give a delinquent business the opportunity to proudly display said license, and remove the shame and fear from operating outside the law, while adding to the revenues of a cash-short government. If we look at government as a partner with our business community, it only makes sense that both should share proportionately in the successes and benefits of a thriving economy. On the flip side, government cannot expect to unilaterally hinder business activity be demanding their dollar share during a sluggish economy. That is why this amnesty program will send a message to businesses that we recognize the hard times we are all suffering and that we are willing to share the burden. This 90 day amnesty will help government through an immediate cash flow problem if our business community partners come forward and pay their share of taxes. We will not succeed in restoring a good time economy if either one of the partners does not share in the sacrifices needed to restore financial stability to our Virgin Islands. Finally, I want to warn those businesses who choose to ignore this opportunity for a "Fresh Start," that our government will work very closely with IRB, Customs, Industrial Development Commission (IDC), and the Lieutenant Governor's office to uncover tax and license evaders, and we will show no mercy to those who only take but not to give. We can only justify our collection of taxes from honest business owners when we penalize those who seek to evade or commit fraud. Operation Fresh Start is good for Government, good for business, and good for the Virgin Islands. Be a part of the solution, not the problem, and let's join together in leveling the playing field for all the hard-working, tax-paying business persons in the Territory.
Editors' note: Andrew Rutnik is the acting director of Licensing and Consumer Affairs.

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