APR 24

A local Senator in the House of Parliament believes there is a need for Tax reform in Grenada in light of government amending the Income Tax Act of 2004.

Private Sector representative in the Upper House Aaron Moses made the call following amendments made to the Act during a meeting of the Senate last Friday.

Over a week ago the House of Representatives approved the changes made to the legislation.

According to the amendment, it has now become mandatory for persons earning over $60.000 per annum to pay income tax at the rate of 30%. Moses told the sitting that there is a need for tax reform in the country in light of the amendment as well as plans for the introduction of Value Added Tax (VAT) in Grenada.

He believes it is unfair for one group of people to pay the levy while the tax base in the country was being eroded. In the past only private sector officials earning that amount would pay but the changes now authorises the Accountant General to deduct income tax from salaries of public officers who qualify.

According to the Private Sector representative in the Senate, the reform highlights the need to address the inequity in the system.
Moses is of the view that the Income Tax Act in its current form disadvantaged people who have been made redundant or retrenched from their jobs or those who had taken early retirement.
He believes that since these people are given a lump sum for their services then they should not be taxed because the monies they received might have already been tied up in mortgages and other commitments.

The Senator is calling for the issue of taxable incomes for persons made redundant or had retired early to be addressed immediately.
Moses made reference to the hundreds of workers in the communications sector who were sent home but still had to pay the levy following the monies received as part of their retirement packages.

He is of the view that since this is the only income these individuals have they should be exempted from paying until they found some other employment.

Labour Representative in the Senate Senator Chester Humphrey abstain from voting on the Bill to protest the lateness of the Order Paper. In his contribution he scoffed at the idea given by Leader of Government Business Senator Einstein Louison as it relates to the amendments.

Senator Louison told the sitting that the reason the Act was not enforced in the past was to prevent a large exodus of people from the public service. The Labour Representative in the Upper House pointed out however that public servants especially those attached to the Ministry of Finance had left the service even without the introduction of the legislation.

He had singled out the Ministry of Finance as one of the departments where there had been an exodus of people especially those holding the position of permanent secretaries.

Humphrey noted that the Act in its current form does have legal implications since it discriminates against a particular group of people mainly private sector workers who are mandated to pay the levy.