Amendments to Min. Of Finance Directive
05 October 2016
The Ministry has assessed the impact of the directive issued on the 15th of August 2016 and found that it indeed improved collection. However, an unintended consequence was that it made it harder, especially for smaller businesses to manage cash flows.
The Ministry of Finance, through the Departments of lnland Revenue and Customs are responsible to collect taxes and duties due to the State. In recent times the occurrence of defaults in paying taxes have been on the increase and the resultant tax arrears have escalated. Measures to improve compliance with tax payments had to be introduced and consequently the Ministry of Finance, through the Inland Revenue Department ('Inland Revenue') issued a directive dated 15 August 2016 requiring businesses to be in good standing as taxpayer (in procession of a Tax Good Standing Certificate) to qualify for receiving any payment for services or goods delivered to the State.
The Ministry has assessed the impact of the directive and found that it indeed improved collection. However, an unintended consequence was that it made it harder, especially for smaller businesses to manage cash flows. In order to find an appropriate balance the directive dated 15 August 2016 is amended as follows:
1) Businesses no longer require a Tax Good Standing Certificate to qualify for payments; and
2) For businesses to qualify for any bidding or tendering process a Tax Good Standing Certificate is required (whether through tender, quotation or any other method).
If you have any further questions please contact our tax team below.