Employers filing incorrect returns, documents, statements or any information relating to an employee or business liable to pay the 5% reconstruction levy could be fined $10, 000.00 and sent to prison for two years.

This information is enshrined in the National Reconstruction Levy Act 2005 which was given its first reading during last Thursday's sitting of the House of Representatives.

The issue of the 5% levy was first raised during the presentation of the 2005 Budget presentation delivered in April by Finance Minister Anthony Boatswain. The idea has not gone down well with the umbrella Trades Union Council (TUC) who say they will object to any new taxes at this time on the grounds that workers are stretched financially as a result of the effects of hurricane Ivan last year.

Leader of Government Business, the current Agriculture Minister Gregory Bowen requested the Act be read a first time. Government said the idea of a Reconstruction Fund is to help alleviate the damage to the country as a result of the passage of hurricane Ivan last September.

Finance officials have estimated the hurricane damage at EC$2.4 billion or over 200% of this country's Gross Domestic Product (GDP). According to the Act, GRDF is expected to receive contributions from both local and foreign sources and so it is necessary for citizens of Grenada to also make their contribution.

The legislation stated that any levy deducted under this Act and not paid to the Comptroller of Inland Revenue within the specific time shall bear interest at the rate of 2% per month.

It said that an employer failing to pay the levy collected on behalf of the employee as well as the interest incurred, may be sued by the Comptroller in any court in order to recover the monies owing. Employers are also expected to maintain a record showing in relation to each calendar year the amount of salary accrued to that employee as well as the levy deducted.

The Act indicated that a person who is aggrieved by a decision or a determination made by the Comptroller may write to him within thirty days after which an Appeals Tribunal will be set up involving the Finance Minister, who is mandated to appoint a three member tribunal.

The Appeals Tribunal has the power to summon to the hearing any person who in its opinion is or might be able to give evidence in respect to the appeal. It also has authority to summon and examine witnesses under oath as well as have the power to require any person to produce any books or documents in his custody necessary for the purpose of the appeal.

Persons exempted from the Levy include the salary of the Governor General, salaries paid to persons accorded diplomatic privileges in Grenada as well as salaries paid to non-nationals under contracts with Regional or International Organisations as well as pensioners.